EN BANC [G.R. No. L-9820. August 30, 1957.] THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant, vs. PEDRO R.

EXCONDE, defendantappellant.

Solicitor General Ambrosio Padilla and Assistant Solicitor General Ramon L. Avancea for plaintiff and appellant. Sotero H. Laurel and Leo C. Caro for defendant and appellant.

SYLLABUS 1.CONSTITUTIONAL LAW; CONGRESS' DELEGATION OF AUTHORITY TO PROMULGATE RULES AND REGULATIONS. Congress may constitutionally delegate authority to promulgate rules and regulations to implement a given legislation and effectuate its policies; for the reason that the legislature often finds it impracticable (if not impossible) to anticipate and provide for the multifarious and complex situations that may be met in carrying the law into effect. All that is required is that the regulation should be germane to the objects and purposes of the law; that the regulation be not in contradiction with it but conform to the standards that the law prescribes. 2.ID.; ID.; VALIDITY OF CENTRAL BANK CIRCULAR No. 37. Circular NO. 37, issued by the Monetary Board of the Central Bank, is a valid exercise of the regulatory power constitutionally delegated to the same under the Central Bank Act (Rep. Act No. 265) and said Circular is in harmony with the objectives sought to be achieved by that law, particularly the control of any prejudicial "expansion and contraction of the money supply" (Sec. 64) and "the preservation of the international value of the peso". (Sec. 2, par. [b]. 3.ID.; ID.; REASON FOR ITS PROMULGATION. It requires no effort to understand that unless the exportation of currency is curtailed, the value of the peso in terms of other currencies can not be maintained, for the increase of the peso supply in foreign countries would tend to depress its value therein. How far the limitation should go may give rise to honest differences of opinion; but the power to restrict the export of Philippine currency is undoubtedly there, and Courts are only concerned with the question of authority, not the wisdom of the measure involved. 4.CRIMINAL LAW; VIOLATION OF CIRCULAR 37; PUNISHABLE AS CRIMINAL OFFENSES. Violations of Central Bank Circular No. 37 are punishable as criminal offenses under the provisions of the first paragraph of Section 34 of Rep. Act No. 265. 5.ID.; ARTICLE 45 REVISED PENAL CODE APPLIES TO VIOLATIONS OF CENTRAL BANK ACT. Pursuant to Article 10 of the Revised Penal Code, Art. 45 thereof (providing for the confiscation or forfeiture of the instruments or tools employed in the commission of a crime) applies to criminal proceedings for violations of the Central Bank Act or of the regulations validly issued in accordance with the same.

DECISION

REYES, J.B.L., J p: The accused Pedro R. Exconde was convicted in the Court of First Instance of Manila of violating Central Bank Circular No. 37, approved September 25, 1952, limiting to P100 the amount of Philippine currency that an outgoing passenger could have on his person. The court below meted upon him a sentence four (4) months of imprisonment and fine of P100 and costs. The facts are not disputed. on May 5, 1954, the appellant Pedro R. Exconde was on board the s.s. President Wilson, as one of its passengers bound for Japan. Supervising agent Jose A. Fojas, of the Department of Finance, found in Exconde's possession P5,090 in Philippine currency, plus U. S. $50 in cash; travelers' checks for $100; and a Bank of America remitter's receipt for $350. Admittedly Exconde's possession of the P5,000 was not licensed, and was in violation of Central Bank Circular No. 37 (48 Off. Gaz. 3823) providing as follows: "SECTION 1.Pursuant to section 34 of Republic Act No. 265 the Monetary Board is hereby promulgating this circular. Violation of any of its provisions shall subject the offender to the penal provisions of said Act. SEC. 2.The import and export of Philippine coins and notes without the necessary license issued by the Central Bank is prohibited except in the following cases: (a)Travelers entering the Philippines may bring in Philippine coins and notes in an amount not exceeding P100, provided the coins do not exceed P50. In case of travelers arriving on ships, the coins they bring in shall not exceed P50 for first class passengers, P20 for second class passengers and P10 for third class passengers. (b)Travelers leaving the Philippines may take with them Philippine coins and notes in an amount not exceeding P100, provided the coins do not exceed P5. Sec. 3.The following shall also be held liable within the meaning of this circular: (a)Any outgoing passengers already booked and ready to leave the country found having in his person or among his luggage, at the airport or piers, an amount exceeding P100 or Philippine coins exceeding P5 when no license has been previously obtained for the excess amount. (b)The sender of any mail matter, envelope, or package already deposited in the mails, manifested or put on board an outgoing international carrier found to contain an amount exceeding P100 when no license has been previously obtained for the excess amount. SEC. 4.All circulars, notifications or regulations previously promulgated by the Monetary Board inconsistent herewith are hereby repealed. SEC. 5.This circular shall take effect immediately." The aforesaid circular was promulgated in connection with sec. 34 of Republic Act 265 (Central Bank Act) providing that: "SEC. 34.Proceedings upon violation of laws and regulations. Whenever any person or entity willfully violates this Act or any order, instruction, rule or regulation legally issued by the Monetary Board, the person or persons responsible for such violation shall be punished by a fine of not more than twenty thousand pesos and by imprisonment of not more than five years. "Whenever a banking institution persists in violating its charter or by-laws or any law, or orders, instructions, rules or regulations legally issued by the Monetary Board, or whenever a banking institution persist in carrying on its business in an unlawful or unsafe manner, the Board shall, by the Solicitor General, and without prejudice to the penalties provided in the preceding paragraph of this section, file a petition in the Court of First Instance praying the assistance of the court to compel the banking institution to discontinue the violations or

practices objected to in the petition of the Board. The Monetary Board may, with the approval of the court, take such action as the court may deem necessary to compel the banking institution complained against to discontinue the violations or practices set forth in the Board's petition, and, if necessary, the Board may, under order of the court, direct the Superintendent of Banks to liquidate the business of the institution." Two appeals were taken from the decision of the trial court and are submitted to us for decision. One is the appeal perfected by Exconde, who alleges that Circular No. 37 is invalid, and the other is the appeal taken by the Government from the lower court's refusal to order the confiscation of the P5,000.00 unauthorizedly held by Exconde and found in his possession by agent Fojas. The first argument of appellant Exconde is that sec. 34 of the Central Bank Act can not validate the issuance of Circular No. 37 because sec. 34 refers solely to regulations under Art. IV, Chapter B of the Act, concerning activities of the "Department of Supervision and Examination" of banking institutions. We see no merit in this contention. The first paragraph of sec. 34, heretofore quoted, is so broad in terms that it was evidently designed to establish penal sanctions for any and all violations of the Act as well as of the regulations legally issued by the Monetary Board; and there being no other sanctioning provision elsewhere in the Act itself, appellant's stand, if upheld, would lead to the result that, with the exception of Art. IV, Chapter B, all other provisions of the Central Bank Act could be violated with impunity. That effect the law could not have intended. It is next argued that sec. 14 of the Central Bank Law does not grant authority to the Monetary Board to prohibit the exportation of Philippine currency, and that if any such authority was in fact granted, the same is void as an invalid delegation of legislative power. Section 14 is as follows: Sec. 14.Exercise of authority. In order to exercise the authority granted to it under this Act, the Monetary Board shall: (a)Prepare and issue such rules and regulations as it considers necessary for the effective discharge of the responsibilities and exercise of the powers assigned to the Monetary Board and to the Central Bank under this Act; (b)Direct the management, operations and administration of the Central Bank and prepare such rules and regulations as it may deem necessary or convenient for this purpose; (c)On the recommendation of the Governor, appoint, fix the remunerations, and remove all officers and employees of the Central Bank, with the exception of the Governor; and (d)Authorize such expenditures by the Central Bank as are in the interest of the effective administration and operation of the Bank." It is well established in this jurisdiction that, while the making of laws is a non-delegable activity that corresponds exclusively to Congress, nevertheless the latter may constitutionally delegate authority to promulgate rules and regulations to implement a given legislation and effectuate its policies, for the reason that the legislature often finds it impracticable (if not impossible) to anticipate and provide for the multifarious and complex situations that may be met in carrying the law into effect. All that is required is that the regulation should be germane to the objects and purposes of the law; that the regulation be not in contradiction with it, but conform to the standards that the law prescribes (Calalang vs. Williams, 70 Phil. 727; Pangasinan Transportation vs. Public Service Commission, 70 Phil. 22; Peo. vs. Rosenthal, 68 Phil. 328; Peo. vs. Vera, 39 Phil. 660; Rubi vs. Prov. Board of Mindoro, 39 Phil. 660). Thus, in Calalang vs. Williams, supra, we ruled (p. 732): "In the case of People vs. Rosenthal and Osmea, G. R. Nos. 46076 and 46077, promulgated June 12, 1939, 1 and in Pangasinan Transportation vs. The Public Service Commission, G. R. No. 47065, promulgated June 26, 1940, 2 this Court had occasion to observe

that the principle of separation of powers has been made to adapt itself to the complexities of modern governments, giving rise to the adoption, within certain limits, of the principle of 'subordinate legislation, not only in the United States and England but in practically all modern governments. Accordingly, with the growing complexity of modern life, the multiplication of the subjects of governmental regulations, and the increased difficulty of administering the laws, the rigidity of the theory of separation of governmental powers has, to a large extent, been relaxed by permitting the delegation of greater powers by the legislative and vesting a larger amount of discretion in administrative and executive officials, not only in the execution of the laws, but also in the promulgation of certain rules and regulations calculated to promote public interest." Considering that the "responsibilities and powers" assigned to the Bank and its Monetary Board, mentioned in sec 14 (a), are those specified in sec. 2 of the Act: "Sec. 2.Responsibilities and objectives. It shall be the responsibility of the Central Bank of the Philippines to administer the monetary and banking system of the Republic. It shall be the duty of the Central Bank to use the powers granted to it under this Act to achieve the following objectives: (a)To maintain monetary stability in the Philippines; (b)To preserve the international value of the peso and the convertibility of the peso into other freely convertible currencies; and (c)To promote a rising level of production, employment and real income in the Philippines." as well as those prescribed in sec. 64 of same law, to wit: "Sec. 64.Guiding principle. The Monetary Board shall endeavor to control any expansion or contraction in the supply, or any rise or fall in prices, which, in the opinion of the Board, is prejudicial to the attainment or maintenance of a high level of production, employment, and real income. In adopting policies and measures in accordance with this principle the Monetary Board shall have due regard for their effects on the availability and cost of money to particular sectors of the economy as well as to the economy as a whole, and their effects on the relationship of domestic prices and costs to world prices and costs," we experience no difficulty in concluding that Circular No. 37 here in question was a valid exercise of the regulatory power delegated by the Central Bank Act, and that said Circular is in harmony with the objectives sought to be achieved by that law, particularly the control of any prejudicial "expansion and contraction of the money supply" (sec. 64) and "the preservation of the international value of the peso" (sec. 2, par. b). It requires no effort to understand that unless the exportation of currency is curtailed, the value of the peso in terms of other currencies can not be maintained, for the increase of the peso supply in foreign countries would tend to depress its value therein. How far the limitation should go may give rise to honest differences of opinion, but the power to restrict the export of Philippine currency is undoubtedly there, and courts are only concerned with the question of authority, not the wisdom of the measure involved. Appellants does not dispute that the objectives set forth in secs. 2 and 64 of the Central Bank Act constitute adequate standards to guide the Bank and the Monetary Board; nor may doubt be entertained on that score, specially when compared to those criteria upon which this Court has previously affixed the stamp of its approval, like "public welfare" (Cardona vs. Binangonan, 37 Phil 547); "necessary in the interest of law and order" (Rubi vs.Provincial Board, 39 Phil. 660); "public interest" (People vs. Rosenthal, 68 Phil. 328); "justice and equity and the substantial merits of the case" ( Int. Hardwood vs. Pagil Fed. of Labor, 70 Phil. 602). Having reached these conclusions, we must likewise assent to the proposition that the violation of Circular No. 37 comes within the penal sanctions of the Central Bank Act; because a violation or infringement

of a rule or regulation validly issued can constitute a misdemeanor or a crime punishable as provided in the authorizing statute, and by virtue of the latter. ". . ., the regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law, and for the sole purpose of carrying into effect its general provisions. By such regulations, of course, the law itself can not be extended. So long, however, as the regulations relate solely to carrying into effect the provisions of the law, they are valid. A violation of a regulation prescribed by an executive officer of the Government in conformity with and based upon a statute authorizing such regulation, constitutes an offense and renders the offender liable to punishment in accordance with the provisions of law." (United States vs. Bailey, 9 Pet., 238, 252, 254, 256; Caha vs. United States, 152 U. S., 211, 218, United States vs. Eaton, 144 U. S., 677), (U. S. vs. Tupasi, Molina, 29 Phil. 124) "The legislature cannot delegate to a board or to an executive officer the power to declare what acts shall constitute a criminal offense. It is competent for it, however, to authorize a commission to prescribed duties on which the law may operate in imposing a penalty and in effectuating the purpose designed in enacting the law. There are numerous cases in which the courts have sustained statutes authorizing administrative officers to promulgate rules on a specified subject and providing that a violation of such rules or orders should constitute a misdemeanor, punishable as provided in the statute." (11 Am. Jur. pp. 965966) "Where statutes provide that violation of a rule or regulation of an administrative agency shall be a misdemeanor, if the rule or regulation is reasonable, the enforcement of the penalty for its violation is sustained by the courts, for the legislature and not the administrative agency made the action penal." (Vol. 1, Sutherland Statutory Construction, p. 92) Turning now to the State's appeal, it is apparent that the refusal of the court below to order the confiscation of the unlicensed money found in the possession of the accused Exconde is contrary to the provisions of Art. 10 of the Revised Penal Code, that read as follows: "ART. 10.Offenses not subject to the provisions of the Code. Offenses which are or in the future may be punishable under special laws are not subject to the provisions of this Code. This Code shall be supplementary to such laws, unless the latter should specially provide the contrary." Pursuant to this rule, Art. 45 of the Penal Code (providing for the confiscation or forfeiture of the instruments or tools employed in the commission of a crime) has repeatedly been applied to crimes penalized by special laws, in default of a contrary mandate therein. Such a course was adopted in U. S.vs. Bruhez, 28 Phil. 305, involving a violation of the Opium Law; U. S. vs. Filart, 30 Phil. 80 (infraction of the lottery act, No. 1757); Villaruz vs. Court of First Instance, 71 Phil. 72 (usury); Commissioner of Customs vs. Sadia, 95 Phil., 439, 50 Off. Gaz. 3560 (violation of the Revised Administrative Code). In the case of U. S. vs. Bruhez, supra, this Court affirmed the confiscation of seven P500-peso bills delivered to a customs official in consideration of his allowing an illegal importation of opium, and considered the money as an instrument for the commission of the crime. Similarly, in Commissioner of Customs vs. Encarnacion, we held that dutiable articles imported without having been declared as required by law should be declared forfeited to the Government under Art. 45 of the Revised Penal Code. If in People vs. Paet, 53 Off. Gaz. 668, and People vs. Sanchez, supra, 745, this Court refused to entertain the Government's appeal from the refusal of the Court of First Instance to decree such a forfeiture, it did so, not because Article 45 of the Penal Code did not apply, but exclusively on the ground that in a criminal case wherein the accused had not appealed, no appeal can be interposed by the Government with a view to increasing the penalty imposed by the court below; and confiscation being an additional penalty, the accused would be placed twice in jeopardy of punishment for the same offense, should the Government's appeal be entertained. But in the present case of accused Exconde, his own appeal has removed all bars to the

review and correction of the penalty imposed by the court below, even if an increase thereof should be the result. (Rule 120, sec. 11). Summing up, we hold: (1) that Circular No. 37, issued by the Monetary Board of the Central Bank, is a valid exercise of the regulatory power constitutionally delegated to the same under the terms of the Central Bank Act (Rep. Act No. 265); (2) that violations of said circular are punishable as criminal offenses under the provisions of the first paragraph of section 34 of said Act; and (3) that, pursuant to Article 10 of the Revised Penal Code, Art. 45 of the said code applies to criminal proceedings for violations of the Central Bank Act or of the regulations validly issued in accordance with the same. Wherefore the judgment appealed from is therefore modified by ordering that the unlicensed money found in the possession of the appellant Exconde be declared forfeited to the Government. In all other respects, the appealed judgment is affirmed. Costs against the accused appellant Pedro R. Exconde. So ordered. Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A., Bautista, Angelo, Labrador, Concepcion, Endencia and Felix, JJ., concur.

EN BANC [G.R. No. 98332. January 16, 1995.] MINERS ASSOCIATION OF THE PHILIPPINES, INC., petitioner, vs. HON. FULGENCIO S. FACTORAN, JR., Secretary of Environment and Natural Resources, and JOEL D. MUYCO, Director of Mines and Geosciences Bureau, respondents.

Quintin R. Aseron, Jr., and Felipe T. Lopez for petitioner. The Solicitor General for respondents. Fred Henry V. Marallag for intervenor.

SYLLABUS 1.ADMINISTRATIVE LAW; ADMINISTRATIVE OFFICIALS; LEGISLATIVE POWER; LIMITED. The power of administrative officials to promulgate rules and regulations in the implementation of a statute is necessarily limited only to carrying into effect what is provided in the legislative enactment. The principle was enunciated as early as 1908 in the case of United States v. Barrias, 11 Phil. 327, 330. The scope of the exercise of such rulemaking power was clearly expressed in the case of United States v. Tupasi Molina, 29 Phil. 120, 124 decided in 1914, thus: "Of course, the regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law, and for the sole purpose of carrying into effect its general provisions. By such regulations, of course, the law itself can not be extended. So long, however, as the regulations relate solely to carrying into effect the provision of the law, they are valid."

2.CONSTITUTIONAL LAW; NATURAL RESOURCES; P.D. 463; PROVISIONS ON LEASE OF MINING CLAIMS, QUARRY PERMITS AND LICENSE CONTRAVENE CONSTITUTIONAL PROVISIONS. Presidential Decree No. 463, as amended, pertains to the old system of exploration, development and utilization of natural resources through "license, concession or lease" which, however, has been disallowed by Article XII, Section 2 of the 1987 Constitution. By virtue of the said constitutional mandate and its implementing law, Executive Order No. 279 which superseded Executive Order No. 211, the provisions dealing on "license, concession, or lease" of mineral resources under Presidential Decree No. 463, as amended, and other existing mining laws are deemed repealed and, therefore, ceased to operate as the governing law. In other words, in all other areas of administration and management of mineral lands, the provisions of Presidential Decree No. 463, as amended, and other existing mining laws, still govern. Section 7 of Executive Order No. 279 provides, thus: "SEC. 7. All provisions of Presidential Decree No. 463, as amended, other existing mining laws, and their implementing rules and regulations, or parts thereof, which are not inconsistent with the provisions of this Executive Order, shall continue in force and effect." Specifically, the provisions of Presidential Decree No. 463, as amended, on lease of mining claims under Chapter XIII, quarry permits on privately-owned lands or quarry license on public lands under Chapter VIII and other related provisions on lease, license and permits are not only inconsistent with the raison de' etre for which Executive Order No. 279 was passed, but contravene the express mandate of Article XII, Section 2 of the 1987 Constitution. Its force and effectivity is thus foreclosed. cdasia 3.ID.; ID.; EXECUTIVE ORDER No. 279 DENR SECRETARY AUTHORIZED TO PROMULGATE RULES AND REGULATIONS TO IMPLEMENT THE PROVISIONS THEREOF. Upon the effectivity of the 1987 Constitution on February 2, 1987, the State assumed a more dynamic role in the exploration, development and utilization of the natural resources of the country. Article XII, Section 2 of the said Charter explicitly ordains that the exploration, development and utilization of natural resources shall be under the full control and supervision of the State. Consonant therewith, the exploration, development and utilization of natural resources may be undertaken by means of direct act of the State, or it may opt to enter into co-production, joint venture, or production-sharing agreements, or it may enter into agreements with foreign-owned corporations involving either technical or financial assistance for large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils according to the general terms and conditions provided by law, based on real contributions to the economic growth and general welfare of the country. Given these considerations there is no clear showing that respondent DENR Secretary has transcended the bounds demarcated by Executive Order No. 279 for the exercise of his rule-making power tantamount to a grave abuse of discretion. Section 6 of Executive Order No. 279 specifically authorizes said official to promulgate such supplementary rules and regulations as may be necessary to effectively implement the provisions thereof. Moreover, the subject sought to be governed and regulated by the questioned orders is germane to the objects and purposes of Executive Order No. 279 specifically issued to carry out the mandate of Article XII, Section 2 of the 1987 Constitution. 4.ID.; ID.; ADMINISTRATIVE ORDER NO. 57 IN RELATION TO ADMINISTRATIVE ORDER NO. 82; ISSUED PURSUANT TO EXECUTIVE ORDER NO. 211 AND 279; NO VIOLATION OF NON-IMPAIRMENT OF CONTRACT CLAUSE. We dispel the impression created by petitioner's argument that the questioned administrative orders unduly preterminate existing mining leases in general. A distinction which spells a real difference must be drawn. Article XII, Section 2 of the 1987 Constitution does not apply retroactively to "license, concession or lease" granted by the government under the 1973 Constitution or before the effectivity of the 1987 Constitution on February 2, 1987. The intent to apply prospectively said constitutional provision was stressed during the deliberations in the Constitutional Commission. During the transition period or after the effectivity of the 1987 Constitution on February 2, 1987 until the first Congress under said Constitution was convened on July 27, 1987, two (2) successive laws, Executive Order Nos. 211 and 279, were promulgated to govern the processing and approval of applications for the exploration, development and utilization of minerals. To carry out the purposes of said laws, the questioned Administrative Order Nos. 57 and 82, now being assailed, were issued by the DENR Secretary. Administrative Order No. 57 applies only to all existing mining leases or agreements which were granted after the effectivity of the 1987 Constitution pursuant to Executive Order No. 211. It bears mention that under the text of Executive Order No. 211, there is a reservation clause which provides that the privileges as well as the terms and conditions of all existing mining leases or agreements granted after the effectivity of the 1987 Constitution,

pursuant to Executive Order No. 211, shall be subject to any and all modifications or alterations which Congress may adopt pursuant to Article XII, Section 2 of the 1987 Constitution. Hence, the strictures of the non-impairment of contract clause under Article III, Section 10 of the 1987 Constitution do not apply to the aforesaid mining leases or agreements granted after the effectivity of the 1987 Constitution, pursuant to Executive Order No. 211. They can be amended, modified or altered by a statute passed by Congress to achieve the purposes of Article XII, Section 2 of the 1987 Constitution. 5.POLITICAL LAW; POLICE POWER; UPHELD AS AGAINST MINING CONTRACT GRANTED BY THE STATE. Well settled is the rule that regardless of the reservation clause, mining leases or agreements granted by the State, such as those granted pursuant to Executive Order No. 211 referred to in this petition, are subject to alterations through a reasonable exercise of the police power of the State. The State, in the exercise of its police power in this regard, may not be precluded by the constitutional restriction on non-impairment of contract from altering, modifying and amending the mining leases or agreements granted under Presidential Decree No. 463, as amended, pursuant to Executive Order No. 211. Police power, being co-extensive with the necessities of the case and the demands of public interest, extends to all the vital public needs. The passage of Executive Order No. 279 which superseded Executive Order No. 211 provided legal basis for the DENR Secretary to carry into effect the mandate of Article XII, Section 2 of the 1987 Constitution. 6.REMEDIAL LAW; CIVIL PROCEDURE; INTERVENTION; NOT PROPER IN CASE AT BAR. Under Section 2, Rule 12 of the Revised Rules of Court, an intervention in a case is proper when the intervenor has a "legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or when he is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof." Continental Marble Corporation has not sufficiently shown that it falls under any of the categories mentioned above. The refusal of the DENR, Regional Office No. 3, San Fernando, Pampanga to renew its Mines Temporary Permit does not justify such an intervention by Continental Marble Corporation for the purpose of obtaining a directive from this Court for the issuance of said permit.

DECISION

ROMERO, J p: The instant petition seeks a ruling from this Court on the validity of two Administrative Orders issued by the Secretary of the Department of Environment and Natural Resources to carry out the provisions of certain Executive Orders promulgated by the President in the lawful exercise of legislative powers. Herein controversy was precipitated by the change introduced by Article XII, Section 2 of the 1987 Constitution on the system of exploration, development and utilization of the country's natural resources. No longer is the utilization of inalienable lands of public domain through "license, concession or lease" under the 1935 and 1973 Constitutions 1 allowed under the 1987 Constitution. cdasia The adoption of the concept of jura regalia 2 that all natural resources are owned by the State embodied in the 1935, 1973 and 1987 Constitutions, as well as the recognition of the importance of the countrys natural resources, not only for national economic development, but also for its security and national defense, 3 ushered in the adoption of the constitutional policy of "full control and supervision by the State" in the exploration, development and utilization of the country's natural resources. The options open to the State are through direct undertaking or by entering into co-production, joint venture, or production-sharing agreements, or by entering into agreement with foreign-owned corporations for large-scale exploration, development and utilization.

Article XII, Section 2 of the 1987 Constitution provides: "Sec. 2.All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or productsharing agreements with Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and under such terms and conditions as may be provided by law. In cases of water rights for irrigation, water supply, fisheries, or industrial uses other than the development of water power, beneficial use may be the measure and limit of the grant. prLL xxx xxx xxx The President may enter into agreements with foreign-owned corporations involving either technical or financial assistance for large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils according to the general terms and conditions provided by law, based on real contributions to the economic growth and general welfare of the country. In such agreements, the State shall promote the development and use of local scientific and technical resources. The President shall notify the Congress of every contract entered into in accordance with this provision, within thirty days from its execution." (Italics supplied) Pursuant to the mandate of the above-quoted provision, legislative acts 4 were successively issued by the President in the exercise of her legislative power. 5 To implement said legislative acts, the Secretary of the Department of Environment and Natural Resources (DENR) in turn promulgated Administrative Order Nos. 57 and 82, the validity and constitutionality of which are being challenged in this petition. dasia On July 10, 1987, President Corazon C. Aquino, in the exercise of her then legislative powers under Article II, Section 1 of the Provisional Constitution and Article XIII, Section 6 of the 1987 Constitution, promulgated Executive Order No. 211 prescribing the interim procedures in the processing and approval of applications for the exploration, development and utilization of minerals pursuant to the 1987 Constitution in order to ensure the continuity of mining operations and activities and to hasten the development of mineral resources. The pertinent provisions read as follows: "SECTION 1.Existing mining permits, licenses, leases and other mining grants issued by the Department of Environment and Natural Resources and Bureau of Mines and Geo-Sciences, including existing operating agreements and mining service contracts, shall continue and remain in full force and effect, subject to the same terms and conditions as originally granted and/or approved. "SECTION 2.Applications for the exploration, development and utilization of mineral resources, including renewal applications and applications for approval of operating agreements and mining service contracts, shall be accepted and processed and may be approved;

concomitantly thereto, declarations of locations and all other kinds of mining applications shall be accepted and registered by the Bureau of Mines and Geo-Sciences. "SECTION 3.The processing, evaluation and approval of all mining applications, declarations of locations, operating agreements and service contracts as provided for in Section 2 above, shall be governed by Presidential Decree No. 463, as amended, other existing mining laws and their implementing rules and regulations: Provided, however, that the privileges granted, as well as the terms and conditions thereof shall be subject to any and all modifications or alterations which Congress may adopt pursuant to Section 2, Article XII of the 1987 Constitution." LibLex On July 25, 1987, President Aquino likewise promulgated Executive Order No. 279 authorizing the DENR Secretary to negotiate and conclude joint venture, co-production, or production-sharing agreements for the exploration, development and utilization of mineral resources, and prescribing the guidelines for such agreements and those agreements involving technical or financial assistance by foreign-owned corporations for large-scale exploration, development, and utilization of minerals. The pertinent provisions relevant to this petition are as follows: "SECTION 1.The Secretary of the Department of Environment and Natural Resources (hereinafter referred to as "the Secretary") is hereby authorized to negotiate and enter into, for and in behalf of the Government, joint venture, co-production, or production-sharing agreements for the exploration, development, and utilization of mineral resources with any Filipino citizens, or corporation or association at least sixty percent (60%) of whose capital is owned by Filipino citizens. Such joint venture, co-production, or production-sharing agreements may be for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and shall include the minimum terms and conditions prescribed in Section 2 hereof. In the execution of a joint venture, co-production or production agreements, the contracting parties, including the Government, may consolidate two or more contiguous or geologically related mining claims or leases and consider them as one contract area for purposes of determining the subject of the joint venture, co-production, or production-sharing agreement. xxx xxx xxx SECTION 6. The Secretary shall promulgate such supplementary rules and regulations as may be necessary to effectively implement the provisions of this Executive Order. SECTION 7. All provisions of Presidential Decree No. 463, as amended, other existing mining laws, and their implementing rules and regulations, or parts thereof, which are not inconsistent with the provisions of this Executive Order, shall continue in force and effect." Pursuant to Section 6 of Executive Order No. 279, the DENR Secretary issued on June 23, 1989 DENR Administrative Order No. 57, series of 1989, captioned "Guidelines of Mineral Production Sharing Agreement under Executive Order No. 279." 6 Under the transitory provision of said DENR Administrative Order No. 57, embodied in its Article 9, all existing mining leases or agreements which were granted after the effectivity of the 1987 Constitution pursuant to Executive Order No. 211, except small scale mining leases and those pertaining to sand and gravel and quarry resources covering an area of twenty (20) hectares or less, shall be converted into production-sharing agreements within one (1) year from the effectivity of these guidelines.cdasia On November 20, 1990, the Secretary of the DENR issued DENR Administrative Order No. 82, series of 1990, laying down the "Procedural Guidelines on the Award of Mineral Production Sharing Agreement (MPSA) through Negotiation." 7

Section 3 of the aforementioned DENR Administrative Order No. 82 enumerates the persons or entities required to submit Letter of Intent (LOIs) and Mineral Production-Sharing Agreement (MPSAs) within two (2) years from the effectivity of DENR Administrative Order No. 57 or until July 17, 1991. Failure to do so within the prescribed period shall cause the abandonment of mining, quarry and sand and gravel claims. Section 3 of DENR Administrative Order No. 82 provides: "Section 3.Submission of Letter of Intent (LOIs) and MPSAs. The following shall submit their LOIs and MPSAs within two (2) years from the effectivity of DENR A.O. 57 or until July 17, 1991. "i.Declaration of Location (DOL) holders, mining lease applicants, exploration permitees, quarry applicants and other mining applicants whose mining/quarry applications have not been perfected prior to the effectivity of DENR Administrative Order No. 57. "ii.All holders of DOL acquired after the effectivity of DENR A.O. No. 57. "iii.Holders of mining leases or similar agreements which were granted after (the) effectivity of 1987 Constitution. LexLib "Failure to submit letters of intent and MPSA applications/proposals within the prescribed period shall cause the abandonment of mining, quarry, and sand and gravel claims." The issuance and the impeding implementation by the DENR of Administrative Order Nos. 57 and 82 after their respective effectivity dates compelled the Miners Association of the Philippines, Inc. 8 to file the instant petition assailing their validity and constitutionality before this Court. cdasia In this petition for certiorari, petitioner Miners Association of the Philippines, Inc., mainly contends that respondent Secretary of DENR issued both Administrative Order Nos. 57 and 82 in excess of his rulemaking power under Section 6 of Executive Order No. 279. On the assumption that the questioned administrative orders do not conform with Executive Order Nos. 211 and 279, petitioner contends that both orders violate the non-impairment of contract provision under Article III, Section 10 of the 1987 Constitution on the ground that Administrative Order No. 57 unduly pre-terminates existing mining leases and other mining agreements and automatically converts them into production-sharing agreements within one (1) year from its effectivity date. On the other hand, Administrative Order No. 82 declares that failure to submit Letters of Intent and Mineral Production-Sharing Agreements within two (2) years from the date of effectivity of said guideline or on July 17, 1991 shall cause the abandonment of their mining, quarry and sand gravel permits. On July 2, 1991, the Court, acting on petitioner's urgent ex-parte petition for issuance of a restraining order/preliminary injunction, issued a Temporary Restraining Order, upon posting of a P500,000.00 bond, enjoining the enforcement and implementation of DENR Administrative Order Nos. 57 and 82, as amended, Series of 1989 and 1990, respectively. 9 On November 13, 1991, Continental Marble Corporation, 10 thru its President, Felipe A. David, sought to intervene 11 in this case alleging that because of the temporary restraining order issued by the Court, the DENR, Regional Office No. 3 in San Fernando, Pampanga refused to renew its Mines Temporary Permit after it expired on July 31, 1991. Claiming that its rights and interests are prejudicially affected by the implementation of DENR Administrative Order Nos. 57 and 82, it joined petitioner herein in seeking to annul Administrative Order Nos. 57 and 82 and prayed that the DENR, Regional Office No. 3 be ordered to issue a Mines Temporary Permit in its favor to enable it to operate during the pendency of the suit. Public respondents were acquired to comment on the Continental Marble Corporation's petition for intervention in the resolution of November 28, 1991. 12

Now to the main petition. It is argued that Administrative Order Nos. 57 and 82 have the effect of repealing or abrogating existing mining laws 13which are not inconsistent with the provisions of Executive Order No. 279. Invoking Section 7 of said Executive Order No. 279, 14 petitioner maintains that respondent DENR Secretary cannot provide guidelines such as Administrative Order Nos. 57 and 82 which are inconsistent with the provisions of Executive Order No. 279 because both Executive Order Nos. 211 and 279 merely reiterated the acceptance and registration of declarations of location and all other kinds of mining applications by the Bureau of Mines and Geo-Sciences under the provisions of Presidential Decree No. 463, as amended, until Congress opts to modify or alter the same. In other words, petitioner would have us rule that DENR Administrative Order Nos. 57 and 82 issued by the DENR Secretary in the exercise of his rule-making power are tainted with invalidity inasmuch as both contravene or subvert the provisions of Executive Order Nos. 211 and 279 or embrace matters not covered, nor intended to be covered, by the aforesaid laws. cdasia We disagree. We reiterate the principle that the power of administrative officials to promulgate rules and regulations in the implementation of a statute is necessarily limited only to carrying into effect what is provided in the legislative enactment. The principle was enunciated as early as 1908 in the case ofUnited States v. Barrias. 15 The scope of the exercise of such rule-making power was clearly expressed in the case of United States v. Tupasi Molina, 16decided in 1914, thus: "Of course, the regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law, and for the sole purpose of carrying into effect its general provisions. By such regulations, of course, the law itself can not be extended. So long, however, as the regulations relate solely to carrying into effect the provision of the law, they are valid." Recently, the case of People v. Maceren 17 gave a brief delineation of the scope of said power of administrative officials: "Administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law, and should be for the sole purpose of carrying into effect its general provisions. By such regulations, of course, the law itself cannot be extended (U.S. v.Tupasi Molina, supra). An administrative agency cannot amend an act of Congress (Santos vs. Estenzo, 109 Phil. 419, 422; Teoxon vs. Members of the Board of Administrators, L-25619, June 30, 1970, 33 SCRA 585; Manuel vs. General Auditing Office, L28952, December 29, 1971, 42 SCRA 660; Deluao v. Casteel, L-21906, August 29, 1969, 29 SCRA 350). Cdpr "The rule-making power must be confined to details for regulating the mode or proceeding to carry into effect the law as it has been enacted. The power cannot be extended to amending or expanding the statutory requirements or to embrace matters not covered by the statute. Rules that subvert the statute cannot be sanctioned (University of Santo Tomas v. Board of Tax Appeals, 93 Phil. 376, 382, citing 12 C.J. 845-46. As to invalid regulations, see Collector of Internal Revenue v. Villaflor, 69 Phil. 319; Wise & Co. v. Meer, 78 Phil. 655, 676; Del Mar v. Phil. Veterans Administration, L-27299, June 27, 1973, 51 SCRA 340, 349). llcd xxx xxx xxx ". . . The rule or regulations should be within the scope of the statutory authority granted by the legislature to the administrative agency (Davis, Administrative Law, p. 194, 197, cited in Victorias Milling Co., Inc. v. Social Security Commission, 114 Phil. 555, 558).

"In case of discrepancy between the basic law and a rule or regulation issued to implement said law, the basic law prevails because said rule or regulations cannot go beyond the terms and provisions of the basic law (People v. Lim, 108 Phil. 1091)." Considering that administrative rules draw life from the statute which they seek to implement, it is obvious that the spring cannot rise higher than its source. We now examine petitioners argument that DENR Administrative Order Nos. 57 and 82 contravene Executive Order Nos. 211 and 279 as both operate to repeal or abrogate Presidential Decree No. 463, as amended, and other mining laws allegedly acknowledged as the principal law under Executive Order Nos. 211 and 279. Petitioner's insistence on the application of Presidential Decree No. 463, as amended, as the governing law on the acceptance and approval of declarations of location and all other kinds of applications for the exploration, development, and utilization of mineral resources pursuant to Executive Order No. 211, is erroneous. Presidential Decree No. 463, as amended, pertains to the old system of exploration, development and utilization of natural resources through "license, concession or lease" which, however, has been disallowed by Article XII, Section 2 of the 1987 Constitution. By virtue of the said constitutional mandate and its implementing law, Executive Order No. 279 which superseded Executive Order No. 211, the provisions dealing on "license, concession, or lease" of mineral resources under Presidential Decree No. 463, as amended, and other existing mining laws are deemed repealed and, therefore, ceased to operate as the governing law. In other words, in all other areas of administration and management of mineral lands, the provisions of Presidential Decree No. 463, as amended, and other existing mining laws, still govern. Section 7 of Executive Order No. 279 provides, thus: "SEC. 7.All provisions of Presidential Decree No. 463, as amended, other existing mining laws, and their implementing rules and regulations, or parts thereof, which are not inconsistent with the provisions of this Executive Order, shall continue in force and effect." Specifically, the provisions of Presidential Decree No. 463, as amended, on lease of mining claims under Chapter VIII, quarry permits on privately-owned lands or quarry license on public lands under Chapter XIII and other related provisions on lease, license and permits are not only inconsistent with the raison d'etre for which Executive Order No. 279 was passed, but contravene the express mandate of Article XII, Section 2 of the 1987 Constitution. Its force and effectivity is thus foreclosed. Cdpr Upon the effectivity of the 1987 Constitution on February 2, 1987, 18 the State assumed a more dynamic role in the exploration, development and utilization of the natural resources of the country. Article XII, Section 2 of the said Charter explicitly ordains that the exploration, development and utilization of natural resources shall be under the full control and supervision of the State. Consonant therewith, the exploration, development and utilization of natural resources may be undertaken by means of direct act of the State, or it may opt to enter into co-production, joint venture, or production-sharing agreements, or it may enter into agreements with foreign-owned corporations involving either technical or financial assistance for large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils according to the general terms and conditions provided by law, based on real contributions to the economic growth and general welfare of the country. cdasia Given these considerations, there is no clear showing that respondent DENR Secretary has transcended the bounds demarcated by Executive Order No. 279 for the exercise of his rule-making power tantamount to a grave abuse of discretion. Section 6 of Executive Order No. 279 specifically authorizes said official to promulgate such supplementary rules and regulations as may be necessary to effectively implement the provisions thereof. Moreover, the subject sought to be governed and regulated by the questioned orders is germane to the objects and purposes of Executive Order No. 279 specifically issued to carry out the mandate of Article XII, Section 2 of the 1987 Constitution. Petitioner likewise maintains that Administrative Order No. 57, in relation to Administrative Order No. 82, impairs vested rights as to violate the non-impairment of contract doctrine guaranteed under Article III, Section 10 of the 1987 Constitution because Article 9 of Administrative Order No. 57 unduly pre-terminates

and automatically converts mining leases and other mining agreements into production-sharing agreements within one (1) year from effectivity of said guideline, while Section 3 of Administrative Order No. 82 declares that failure to submit Letters of Intent (LOIs) and MPSAs within two (2) years from the effectivity of Administrative Order No. 57 or until July 17, 1991 shall cause the abandonment of mining, quarry, and sand gravel permits. In support of the above contention, it is argued by petitioner that Executive Order No. 279 does not contemplate automatic conversion of mining lease agreements into mining production-sharing agreement as provided under Article 9, Administrative Order No. 57 and/or the consequent abandonment of mining claims for failure to submit LOIs and MPSAs under Section 3, Administrative Order No. 82 because Section 1 of said Executive Order No. 279 empowers the DENR Secretary to negotiate and enter into voluntary agreements which must set forth the minimum terms and conditions provided under Section 2 thereof. Moreover, petitioner contends that the power to regulate and enter into mining agreements does not include the power to preterminate existing mining lease agreements. To begin with, we dispel the impression created by petitioner's argument that the questioned administrative orders unduly preterminate existing mining leases in general. A distinction which spells a real difference must be drawn. Article XII, Section 2 of the 1987 Constitution does not apply retroactively to "license, concession or lease" granted by the government under the 1973 Constitution or before the effectivity of the 1987 Constitution on February 2, 1987. The intent to apply prospectively said constitutional provision was stressed during the deliberations in the Constitutional Commission, 19thus: "MR. DAVIDE: Under the proposal, I notice that except for the [inalienable] lands of the public domain, all other natural resources cannot be alienated and in respect to [alienable] lands of the public domain, private corporations with the required ownership by Filipino citizens can only lease the same. Necessarily, insofar as other natural resources are concerned, it would only be the State which can exploit, develop, explore and utilize the same. However, the State may enter into a joint venture, co-production or production-sharing. Is that not correct? "MR. VILLEGAS: Yes. "MR. DAVIDE: Consequently, henceforth upon the approval of this Constitution, no timber or forest concession, permits or authorization can be exclusively granted to any citizen of the Philippines nor to any corporation qualified to acquire lands of the public domain? "MR. VILLEGAS: Would Commissioner Monsod like to comment on that? I think his answer is "yes." "MR. DAVIDE: So, what will happen now to licenses or concessions earlier granted by the Philippine government to private corporations or to Filipino citizens? Would they be deemed repealed?

"MR. VILLEGAS: This is not applied retroactively. They will be respected. "MR. DAVIDE: In effect, they will be deemed repealed? "MR. VILLEGAS: No." (Italics supplied) During the transition period or after the effectivity of the 1987 Constitution on February 2, 1987 until the first Congress under said Constitution was convened on July 27, 1987, two (2) successive laws, Executive Order Nos. 211 and 279, were promulgated to govern the processing and approval of applications for the exploration, development and utilization of minerals. To carry out the purposes of said laws, the questioned Administrative Order Nos. 57 and 82, now being assailed, were issued by the DENR Secretary. cdrep Article 9 of Administrative Order No. 57 provides: "ARTICLE 9 "TRANSITORY PROVISION "9.1.All existing mining leases or agreements which were granted after the effectivity of the 1987 Constitution pursuant to Executive Order No. 211, except small scale mining leases and those pertaining to sand and gravel and quarry resources covering an area of twenty (20) hectares or less shall be subject to these guidelines. All such leases or agreements shall be converted into production-sharing agreement within one (1) year from the effectivity of these guidelines. However, any mining firm which has established mining rights under Presidential Decree 463 or other laws may avail of the provisions of EO 279 by following the procedures set down in this document." It is clear from the aforestated provision that Administrative Order No. 57 applies only to all existing mining leases or agreements which were granted after the effectivity of the 1987 Constitution pursuant to Executive Order No. 211. It bears mention that under the text of Executive Order No. 211, there is a reservation clause which provides that the privileges as well as the terms and conditions of all existing mining leases or agreements granted after the effectivity of the 1987 Constitution, pursuant to Executive Order No. 211, shall be subject to any and all modifications or alterations which Congress may adopt pursuant to Article XII, Section 2 of the 1987 Constitution. Hence, the strictures of the non-impairment of contract clause under Article III, Section 10 of the 1987 Constitution 20 do not apply to the aforesaid mining leases or agreements granted after the effectivity of the 1987 Constitution, pursuant to Executive Order No. 211. They can be amended, modified or altered by a statute passed by Congress to achieve the purposes of Article XII, Section 2 of the 1987 Constitution. cdasia Clearly, Executive Order No. 279 issued on July 25, 1987 by President Corazon C. Aquino in the exercise of her legislative power has the force and effect of a statute or law passed by Congress. As such, it validly modified or altered the privileges granted, as well as the terms and conditions of mining leases and agreements under Executive Order No. 211 after the effectivity of the 1987 Constitution by authorizing the DENR Secretary to negotiate and conclude joint venture, co-production, or production-sharing agreements for the exploration, development and utilization of mineral resources and prescribing the guidelines for such agreements and those agreements involving technical or financial assistance by foreign-owned corporations for large-scale exploration, development, and utilization of minerals.

Well-settled is the rule, however, that regardless of the reservation clause, mining leases or agreements granted by the State, such as those granted pursuant to Executive Order No. 211 referred to in this petition, are subject to alterations through a reasonable exercise of the police power of the State. In the 1950 case of Ongsiako v. Gamboa, 21 where the constitutionality of Republic Act No. 34 changing the 50-50 sharecropping system in existing agricultural tenancy contracts to 55-45 in favor of tenants was challenged, the Court, upholding the constitutionality of the law, emphasized the superiority of the police power of the State over the sanctity of the contract: "The prohibition contained in constitutional provisions against impairing the obligation of contracts is not an absolute one and it is not to be read with literal exactness like a mathematical formula. Such provisions are restricted to contracts which respect property, or some object or value, and confer rights which may be asserted in a court of justice, and have no application to statute relating to public subjects within the domain of the general legislative powers of the State, and involving the public rights and public welfare of the entire community affected by it. They do not prevent a proper exercise by the State of its police powers. By enacting regulations reasonably necessary to secure the health, safety, morals, comfort, or general welfare of the community, even the contracts may thereby be affected; for such matter can not be placed by contract beyond the power of the State to regulate and control them." 22 In Ramas v. CAR and Ramos 23 where the constitutionality of Section 14 of Republic Act No. 1199 authorizing the tenants to change from share to leasehold tenancy was challenged on the ground that it impairs the obligation of contracts, the Court ruled that obligations of contracts must yield to a proper exercise of the police power when such power is exercised to preserve the security of the State and the means adopted are reasonably adapted to the accomplishment of that end and are, therefore, not arbitrary or oppressive. The economic policy on the exploration, development and utilization of the countrys natural resources under Article XII, Section 1 of the 1987 Constitution could not be any clearer. As enunciated in Article XII, Section 2 of the 1987 Constitution, the exploration, development and utilization of natural resources under the new system mandated in Section 2, is geared towards a more equitable distribution of opportunities, income, and wealth, a sustained increase in the amount of goods and services produced by the nation for the benefit of the people, and an expanding productivity as the key to raising the quality of life for all, especially the underprivileged. cdasia The exploration, development and utilization of the country's natural resources are matters vital to the public interest and the general welfare of the people. The recognition of the importance of the countrys natural resources was expressed as early as the 1934 Constitutional Convention. In connection therewith, the 1986 U.P. Constitution Project observed: "The 1934 Constitutional Convention recognized the importance of our natural resources not only for its security and national defense. Our natural resources which constitute the exclusive heritage of the Filipino nation, should be preserved for those under the sovereign authority of that nation and for their posterity. This will ensure the countrys survival as a viable sovereign republic." Accordingly, the State, in the exercise of its police power in this regard, may not be precluded by the constitutional restriction on non-impairment of contract from altering, modifying and amending the mining leases or agreements granted under Presidential Decree No. 463, as amended, pursuant to Executive Order No. 211. Police power, being co-extensive with the necessities of the case and the demands of public interest, extends to all the vital public needs. The passage of Executive Order No. 279 which superseded Executive Order No. 211 provided legal basis for the DENR Secretary to carry into effect the mandate of Article XII, Section 2 of the 1987 Constitution. Nowhere in Administrative Order No. 57 is there any provision which would lead us to conclude that the questioned order authorizes the automatic conversion of mining leases and agreements granted after the

effectivity of the 1987 Constitution, pursuant to Executive Order No. 211, to production-sharing agreements. The provision in Article 9 of Administrative Order No. 57 that "all such leases or agreements shall be converted into production-sharing agreements within one (1) year from the effectivity of these guidelines" could not possibly contemplate a unilateral declaration on the part of the Government that all existing mining leases and agreements are automatically converted into production-sharing agreements. On the contrary, the use of the term "production-sharing agreement" in the same provision implies negotiation between the Government and the applicants, if they are so minded. Negotiation negates compulsion or automatic conversion as suggested by petitioner in the instant petition. A mineral production-sharing agreement (MPSA) requires a meeting of the minds of the parties after negotiations arrived at in good faith and in accordance with the procedure laid down in the subsequent Administrative Order No. 82. We, therefore, rule that the questioned administrative orders are reasonably directed to the accomplishment of the purposes of the law under which they were issued and were intended to secure the paramount interest of the public, their economic growth and welfare. The validity and constitutionality of Administrative Order Nos. 57 and 82 must be sustained, and their force and effect upheld. cdasia We now proceed to the petition-in-intervention. Under Section 2, Rule 12 of the Revised Rules of Court, an intervention in a case is proper when the intervenor has a "legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or when he is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof." Continental Marble Corporation has not sufficiently shown that it falls under any of the categories mentioned above. The refusal of the DENR, Regional Office No. 3, San Fernando, Pampanga to renew its Mines Temporary Permit does not justify such an intervention by Continental Marble Corporation for the purpose of obtaining a directive from this Court for the issuance of said permit. Whether or not Continental Marble matter best addressed to the appropriate government body but certainly, not through this Court. Intervention is hereby DENIED. WHEREFORE, the petition is DISMISSED for lack of merit. The Temporary Restraining Order issued on July 2, 1991 is hereby LIFTED. SO ORDERED. Narvasa, C.J., Feliciano, Padilla, Bidin, Regalado, Davide, Jr., Bellosillo, Melo, Quiason, Puno, Vitug, Kapunan and Mendoza, JJ., concur.