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Republic of the Philippines SUPREME COURT Manila

SECOND DIVISION BENGUET CORPORATION, Petitioner, !ersus G.R. No. 163101 Present: "UISUM#IN$, J., Chairperson, C%RPIO, C%RPIO MOR%&ES, TIN$%, an' DEPARTMENT OF ENVIRONMENT VE&%SCO, (R), JJ. AND NATURAL RESOURCES -MINES ADJUDICATION BOARD and J.G. REALT AND MINING Pro*ul+ate': CORPORATION, Respon'ents) ,ebruar- ./, 0112 3 3 DECISION VELASCO, JR., J.! The instant petition un'er Rule 45 of the Rules of Court see6s the annul*ent of the Dece*ber 0, 0110 Decision. an' March .7, 0118 Resolution0 of the Depart*ent of En!iron*ent an' Natural Resources Minin+ %'9u'ication #oar' :DENR M%#; in M%# Case No) 1.08 1. :Mines %'*inistrati!e Case No) R M 0111 1.; entitle' Benguet Corporation :Benguet; v. J.G. Realty and Mining Corporation :J.G. Realty;) The Dece*ber 0, 0110 Decision uphel' the March .<, 011. Decision / of the M%# Panel of %rbitrators :PO%; =hich cancele' the Ro-alt- %+ree*ent =ith Option to Purchase :R%>OP; 'ate' (une ., .<27 8 bet=een #en+uet an' ()$) Realt-, an' e3clu'e' #en+uet fro* the 9oint Mineral Pro'uction Sharin+ %+ree*ent :MPS%; application o!er four *inin+ clai*s) The March .7, 0118 Resolution 'enie' #en+uet?s Motion for Reconsi'eration)

. 0

Rollo, pp) 05 /2) I') at /< 8.) / I') at 80 87) 8 I') at 7/ ...)

T"# Fa$%& On (une ., .<27, #en+uet an' ()$) Realt- entere' into a R%>OP, =herein ()$) Realt- =as ac6no=le'+e' as the o=ner of four *inin+ clai*s respecti!el- na*e' as #onito I, #onito II, #onito III, an' #onito IV, =ith a total area of 022)2454 hectares, situate' in #aran+a- &u6lu6a*, Sitio #a+on+ #a-an, Municipalit- of (ose Pan+aniban, Ca*arines Norte) The parties also e3ecute' a Supple*ental %+ree*ent 5 'ate' (une ., .<27) The *inin+ clai*s =ere co!ere' b- MPS% %pplication No) %PS% V 111< 9ointl- file' b- ()$) Realt- as clai*o=ner an' #en+uet as operator) In the R%>OP, #en+uet obli+ate' itself to perfect the ri+hts to the *inin+ clai*s an'@or other=ise acAuire the *inin+ ri+hts to the *ineral clai*s) >ithin 08 *onths fro* the e3ecution of the R%>OP, #en+uet shoul' also cause the e3a*ination of the *inin+ clai*s for the purpose of 'eter*inin+ =hether or not the- are =orth 'e!elopin+ =ith reasonable probabilit- of profitable pro'uction) #en+uet un'ertoo6 also to furnish ()$) Realt- =ith a report on the e3a*ination, =ithin a reasonable ti*e after the co*pletion of the e3a*ination) Moreo!er, also =ithin the e3a*ination perio', #en+uet shall con'uct all necessar- e3ploration in accor'ance =ith a prepare' e3ploration pro+ra*) If it chooses to 'o so an' before the e3piration of the e3a*ination perio', #en+uet *a- un'erta6e to 'e!elop the *inin+ clai*s upon =ritten notice to ()$) Realt-) #en+uet *ust then place the *inin+ clai*s into co**ercial pro'ucti!e sta+e =ithin 08 *onths fro* the =ritten notice)4 It is also pro!i'e' in the R%>OP that if the *inin+ clai*s =ere place' in co**ercial pro'uction b- #en+uet, ()$) Realtshoul' be entitle' to a ro-alt- of fi!e percent :5B; of net realiCable !alue, an' to ro-alt- for an- pro'uction 'one b- #en+uet =hether 'urin+ the e3a*ination or 'e!elop*ent perio's)

5 4

I') at ..0 ..5) I') at 75 72)

Thus, on %u+ust <, .<2<, the E3ecuti!e Vice Presi'ent of #en+uet, %ntonio N) Tachulin+, issue' a letter infor*in+ ()$) Realt- of its intention to 'e!elop the *inin+ clai*s) Do=e!er, on ,ebruar- <, .<<<, ()$) Realt-, throu+h its Presi'ent, (ohnn- &) Tan, then sent a letter to the Presi'ent of #en+uet infor*in+ the latter that it =as ter*inatin+ the R%>OP on the follo=in+ +roun's:
a) The fact that -our co*pan- has faile' to perfor* the obli+ations set forth in the R%>OP, i)e), to un'erta6e 'e!elop*ent =or6s =ithin 0 -ears fro* the e3ecution of the %+ree*entE b) Violation of the Contract b- allo=in+ hi+h +ra'ers to operate on our clai*) c) No stipulation =as pro!i'e' =ith respect to the ter* li*it of the R%>OP) ') Non pa-*ent of the ro-alties thereon as pro!i'e' in the R%>OP)7

In response, #en+uet?s Mana+er for &e+al Ser!ices, Re-nal'o P) Men'oCa, =rote ()$) Realt- a letter 'ate' March 2, .<<<, 2 therein alle+in+ that #en+uet co*plie' =ith its obli+ations un'er the R%>OP b- in!estin+ PhP 80)8 *illion to rehabilitate the *ines, an' that the co**ercial operation =as ha*pere' b- the non issuance of a Mines Te*porar- Per*it b- the Mines an' $eosciences #ureau :M$#; =hich *ust be consi'ere' as force majeure, entitlin+ #en+uet to an e3tension of ti*e to prosecute such per*it) #en+uet further clai*e' that the hi+h +ra'ers *entione' b- ()$) Realt- =ere alrea'- operatin+ prior to #en+uet?s ta6in+ o!er of the pre*ises, an' that ()$) Realt- ha' the obli+ation of e9ectin+ such s*all scale *iners) #en+uet also alle+e' that the nature of the *inin+ business *a'e it 'ifficult to specif- a ti*e li*it for the R%>OP) #en+uet then ar+ue' that the ro-alties 'ue to ()$) Realt- =ere in fact in its office an' rea'- to be pic6e' up at anti*e) It appeare' that, pre!iousl-, the practice b- ()$) Realt- =as to pic6 up chec6s fro* #en+uet representin+ such ro-alties) Do=e!er, startin+ %u+ust .<<8, ()$) Realt- alle+e'l- refuse' to collect such chec6s fro* #en+uet) Thus, #en+uet posite' that there =as no !ali' +roun' for the ter*ination of
7 2

I') at 010) I') at ..2 ..<)

the R%>OP) It also re*in'e' ()$) Realt- that it shoul' sub*it the 'isa+ree*ent to arbitration rather than unilaterall- ter*inatin+ the R%>OP) On (une 7, 0111, ()$) Realt- file' a Petition for Declaration of Nullit-@Cancellation of the R%>OP< =ith the &e+aspi Cit- PO%, Re+ion V, 'oc6ete' as DENR Case No) 0111 1. an' entitle' J.G. Realty v. Benguet) On March .<, 011., the PO% issue' a Decision, .1 '=ellin+ upon the issues of :.; =hether the arbitrators ha' 9uris'iction o!er the caseE an' :0; =hether #en+uet !iolate' the R%>OP 9ustif-in+ the unilateral cancellation of the R%>OP b- ()$) Realt-) The 'ispositi!e portion state':
>DERE,ORE, pre*ises consi'ere', the (une 1., .<27 FR%>OPG an' its Supple*ental %+ree*ent is hereb- 'eclare' cancelle' an' =ithout effect) #EN$UET is hereb- e3clu'e' fro* the 9oint MPS% %pplication o!er the *ineral clai*s 'eno*inate' as H#ONITO II, H#ONITO III, H#ONITO IIII an' H#ONITO IVI) SO ORDERED)

Therefro*, #en+uet file' a Notice of %ppeal.. =ith the M%# on %pril 0/, 011., 'oc6ete' as Mines %'*inistrati!e Case No) R M 0111 1.) Thereafter, the M%# issue' the assaile' Dece*ber 0, 0110 Decision) #en+uet then file' a Motion for Reconsi'eration of the assaile' Decision =hich =as 'enie' in the March .7, 0118 Resolution of the M%#) Dence, #en+uet file' the instant petition) T"# I&&'#&
.) There =as serious an' palpable error =hen the Donorable #oar' faile' to rule that the contractual obli+ation of the parties to arbitrate un'er the Ro-alt- %+ree*ent is *an'ator-) 0) The Donorable #oar' e3cee'e' its 9uris'iction =hen it sustaine' the cancellation of the Ro-alt- %+ree*ent for alle+e' breach of contract 'espite the absence of e!i'ence)

<

I') at 0.5 0.<) I') at 80 87) .. I') at 82)


.1

/) The "uestione' Decision of the Donorable #oar' in cancellin+ the R%>OP pre9u'iceF'G the substantial ri+hts of #en+uet un'er the contract to the un9ust enrich*ent of ($ Realt-).0

Restate', the issues are: :.; Shoul' the contro!ers- ha!e first been sub*itte' to arbitration before the PO% too6 co+niCance of the caseJE :0; >as the cancellation of the R%>OP supporte' b- e!i'enceJE an' :/; Di' the cancellation of the R%>OP a*ount to un9ust enrich*ent of ()$) Realtat the e3pense of #en+uetJ T"# Co'(%)& R'*+n, #efore =e '=ell on the substanti!e issues, =e fin' that the instant petition can be 'enie' outri+ht as #en+uet resorte' to an i*proper re*e'-) The last para+raph of Section 7< of Republic %ct No) :R%; 7<80 or the HPhilippine Minin+ %ct of .<<5I states, H% petition for re!ie= bcertiorari an' Auestion of la= *a- be file' b- the a++rie!e' part- =ith the Supre*e Court =ithin thirt- :/1; 'a-s fro* receipt of the or'er or 'ecision of the FM%#G)I Do=e!er, this Court has alrea'- in!ali'ate' such pro!ision in Carpio v. Sulu Resources Development Corp.,./ rulin+ that a 'ecision of the M%# *ust first be appeale' to the Court of %ppeals :C%; un'er Rule 8/ of the Rules of Court, before recourse to this Court *a- be ha') >e hel', thus:
To su**ariCe, there are sufficient le+al footin+s authoriCin+ a re!ie= of the M%# Decision un'er Rule 8/ of the Rules of Court) First, Section /1 of %rticle VI of the .<27 Constitution, *an'ates that HFnGo la= shall be passe' increasin+ the appellate 9uris'iction of the Supre*e Court as pro!i'e' in this Constitution =ithout its a'!ice an' consent)I On the other han', Section 7< of R% No) 7<80 pro!i'es that 'ecisions of the M%# *a- be re!ie=e' b- this Court on a Hpetition for re!ie= bcertiorari)I This pro!ision is ob!iousl- an e3pansion of the Court?s appellate 9uris'iction, an e3pansion to =hich this Court has not consente') In'iscri*inate enact*ent of le+islation enlar+in+ the appellate 9uris'iction of this Court =oul' unnecessaril- bur'en it) Second, =hen the Supre*e Court, in the e3ercise of its rule
.0 ./

I') at 2, .8 K .2, respecti!el-) $)R) No) .82047, %u+ust 2, 0110, /27 SCR% .02)

*a6in+ po=er, transfers to the C% pen'in+ cases in!ol!in+ a re!ie= of a Auasi 9u'icial bo'-?s 'ecisions, such transfer relates onl- to proce'ureE hence, it 'oes not i*pair the substanti!e an' !este' ri+hts of the parties) The a++rie!e' part-?s ri+ht to appeal is preser!e'E =hat is chan+e' is onlthe proce'ure b- =hich the appeal is to be *a'e or 'eci'e') The parties still ha!e a re*e'- an' a co*petent tribunal to +rant this re*e'-) !ird, the Re!ise' Rules of Ci!il Proce'ure inclu'e' Rule 8/ to pro!i'e a unifor* rule on appeals fro* Auasi 9u'icial a+encies) Un'er the rule, appeals fro* their 9u'+*ents an' final or'ers are no= reAuire' to be brou+ht to the C% on a !erifie' petition for re!ie=) % Auasi 9u'icial a+enc- or bo'- has been 'efine' as an or+an of +o!ern*ent, other than a court or le+islature, =hich affects the ri+hts of pri!ate parties throu+h either a'9u'ication or rule *a6in+) M%# falls un'er this 'efinitionE hence, it is no 'ifferent fro* the other Auasi 9u'icial bo'ies enu*erate' un'er Rule 8/) #esi'es, the intro'uctor- =or's in Section . of Circular No) . <.LLHa*on+ these a+encies areILLin'icate that the enu*eration is not e3clusi!e or conclusi!e an' ac6no=le'+e the e3istence of other Auasi 9u'icial a+encies =hich, thou+h not e3pressl- liste', shoul' be 'ee*e' inclu'e' therein) Fourt!, the Court realiCes that un'er #atas Pa*bansa :#P; #l+) .0< as a*en'e' b- R% No) 7<10, factual contro!ersies are usuallin!ol!e' in 'ecisions of Auasi 9u'icial bo'iesE an' the C%, =hich is li6e=ise tas6e' to resol!e Auestions of fact, has *ore elbo= roo* to resol!e the*) #- inclu'in+ Auestions of fact a*on+ the issues that *a- be raise' in an appeal fro* Auasi 9u'icial a+encies to the C%, Section / of Re!ise' %'*inistrati!e Circular No) . <5 an' Section / of Rule 8/ e3plicitl- e3pan'e' the list of such issues) %ccor'in+ to Section / of Rule 8/, HFaGn appeal un'er this Rule *a- be ta6en to the Court of %ppeals =ithin the perio' an' in the *anner herein pro!i'e' =hether the appeal in!ol!es Auestions of fact, of la=, or *i3e' Auestions of fact an' la=)I Dence, appeals fro* Auasi 9u'icial a+encies e!en onl- on Auestions of la= *a- be brou+ht to the C%) Fift!, the 9u'icial polic- of obser!in+ the hierarch- of courts 'ictates that 'irect resort fro* a'*inistrati!e a+encies to this Court =ill not be entertaine', unless the re'ress 'esire' cannot be obtaine' fro* the appropriate lo=er tribunals, or unless e3ceptional an' co*pellin+ circu*stances 9ustif- a!ail*ent of a re*e'- fallin+ =ithin an' callin+ for the e3ercise of our pri*ar- 9uris'iction).8

The abo!e principle =as reiterate' in "sap!il Construction and Development Corporation v. uason, Jr) :"sap!il;).5 Do=e!er, the Carpio rulin+ =as not applie' to "sap!il as the petition in the latter case =as file' in .<<< or three -ears before the pro*ul+ation of Carpio in 0110) Dere, the petition =as file' on %pril 02, 0118 =hen the Carpio 'ecision =as alrea'applicable, thus #en+uet shoul' ha!e file' the appeal =ith the C%)
.8 .5

I') at ./2 .8.) $)R) No) ./81/1, %pril 05, 0114, 822 SCR% .04, .//)

Petitioner ha!in+ faile' to properl- appeal to the C% un'er Rule 8/, the 'ecision of the M%# has beco*e final an' e3ecutor-) On this +roun' alone, the instant petition *ust be 'enie') E!en if =e entertain the petition althou+h #en+uet s6irte' the appeal to the C% !ia Rule 8/, still, the Dece*ber 0, 0110 Decision an' March .7, 0118 Resolution of the DENR M%# in M%# Case No) 1.08 1. shoul' be *aintaine') F+(&% I&&'#! T"# $a&# &"o'*d "a-# .+(&% /##n /(o',"% %o -o*'n%a(0 a(/+%(a%+on /#.o(# %"# POA Secs) ..)1. an' ..)10 of the R%>OP pertinentl- pro!i'e:
..)1. %rbitration %n- 'isputes, 'ifferences or 'isa+ree*ents bet=een #EN$UET an' the O>NER =ith reference to an-thin+ =hatsoe!er pertainin+ to this %+ree*ent that cannot be a*icabl- settle' b- the* shall not be cause of an- action of an- 6in' =hatsoe!er in an- court or a'*inistrati!e a+encbut shall, upon notice of one part- to the other, be referre' to a #oar' of %rbitrators consistin+ of three :/; *e*bers, one to be selecte' b#EN$UET, another to be selecte' b- the O>NER an' the thir' to be selecte' b- the afore*entione' t=o arbitrators so appointe') 3333 ..)10 Court %ction

No action shall be institute' in court as to an- *atter in 'ispute as hereinabo!e state', e3cept to enforce the 'ecision of the *a9orit- of the %rbitrators).4

Thus, #en+uet ar+ues that the PO% shoul' ha!e first referre' the case to !oluntar- arbitration before ta6in+ co+niCance of the case, citin+ Sec) 0 of R% 274 on persons an' *atters sub9ect to arbitration) On the other han', in 'en-in+ such ar+u*ent, the PO% rule' that:

.4

Rollo, p) <1)

>hile the parties *a- establish such stipulations clauses, ter*s an' con'itions as the- *a- 'ee* con!enient, the sa*e *ust not be contrar- to la= an' public polic-) %t a +lance, there is nothin+ =ron+ =ith the ter*s an' con'itions of the a+ree*ent) #ut to state that an a++rie!e' part- cannot initiate an action =ithout +oin+ to arbitration =oul' be t-in+ one?s han' e!en if there is a la= =hich allo=s hi* to 'o so).7

The M%#, *ean=hile, 'enie' #en+uet?s contention on the +roun' of estoppel, statin+:
#esi'es, b- its o=n act, #en+uet is alrea'- estoppe' in Auestionin+ the 9uris'iction of the Panel of %rbitrators to hear an' 'eci'e the case) %s pointe' out in the appeale' Decision, #en+uet initiate' an' file' an %'!erse Clai* 'oc6ete' as M%C R M 0111 10 o!er the sa*e *inin+ clai*s =ithout un'er+oin+ contractual arbitration) In this particular case :M%C R M 0111 10; no= sub9ect of the appeal, #en+uet is li6e=ise in estoppel fro* Auestionin+ the co*petence of the Panel of %rbitrators to hear an' 'eci'e in the su**ar- procee'in+s ()$) Realt-?s petition, =hen #en+uet itself 'i' not *erel- *o!e for the 'is*issal of the case but also file' an %ns=er =ith counterclai* see6in+ affir*ati!e reliefs fro* the Panel of %rbitrators).2

Moreo!er, the M%# rule' that the contractual pro!ision on arbitration *erel- pro!i'es for an a''itional foru* or !enue an' 'oes not 'i!est the PO% of the 9uris'iction to hear the case).< In its (ul- 01, 0118 Co**ent, 01 ()$) Realt- reiterate' the abo!e rulin+s of the PO% an' M%#) It ar+ue' that R% 7<80 or the HPhilippine Minin+ %ct of .<<5I is a special la= =hich shoul' pre!ail o!er the stipulations of the parties an' o!er a +eneral la=, such as R% 274) It also ar+ue' that the PO% cannot be consi'ere' as a HcourtI un'er the conte*plation of R% 274 an' that 9urispru'ence sa-in+ that there *ust be prior resort to arbitration before filin+ a case =ith the courts is inapplicable to the instant case as the PO% is itself alrea'- en+a+e' in arbitration) On this issue, =e rule for #en+uet) Sec) 0 of R% 274 eluci'ates the scope of arbitration:

.7 .2

I') at 88) I') at /.) .< I') at /0) 01 I') at .51 07/)

Section 0) #ersons and matters su$ject to ar$itration.LLT1o o( 2o(# 3#(&on& o( 3a(%+#& 2a0 &'/2+% %o %"# a(/+%(a%+on o. on# o( 2o(# a(/+%(a%o(& an0 $on%(o-#(&0 #4+&%+n, /#%1##n %"#2 a% %"# %+2# o. %"# &'/2+&&+on and 1"+$" 2a0 /# %"# &'/5#$% o. an a$%+on, o( %"# 3a(%+#& %o an0 $on%(a$% 2a0 +n &'$" $on%(a$% a,(## %o &#%%*# /0 a(/+%(a%+on a $on%(o-#(&0 %"#(#a.%#( a(+&+n, /#%1##n %"#2. S'$" &'/2+&&+on o( $on%(a$% &"a** /# -a*+d, #n.o($#a/*# and +((#-o$a/*#, &a-# '3on &'$" ,(o'nd& a& #4+&% a% *a1 .o( %"# (#-o$a%+on o. an0 $on%(a$%. Such sub*ission or contract *a- inclu'e AuestionFsG arisin+ out of !aluations, appraisals or other contro!ersies =hich *a- be collateral, inci'ental, prece'ent or subseAuent to an- issue bet=een the parties) :E*phasis supplie');

In R% <025 or the H%lternati!e Dispute Resolution %ct of 0118,I the Con+ress reiterate' the efficac- of arbitration as an alternati!e *o'e of 'ispute resolution b- statin+ in Sec) /0 thereof that 'o*estic arbitration shall still be +o!erne' b- R% 274) Clearl-, a contractual stipulation that reAuires prior resort to !oluntar- arbitration before the parties can +o 'irectl- to court is not ille+al an' is in fact pro*ote' b- the State) Thus, petitioner correctlcites se!eral cases =hereb- arbitration clauses ha!e been uphel' b- this Court)0. Moreo!er, the contention that R% 7<80 pre!ails o!er R% 274 presupposes a conflict bet=een the t=o la=s) Such is not the case here) To reiterate, a!ail*ent of !oluntar- arbitration before resort is *a'e to the courts or Auasi 9u'icial a+encies of the +o!ern*ent is a !ali' contractual stipulation that *ust be a'here' to b- the parties) %s state' in Secs) 4 an' 7 of R% 274:
Section 4) %earing $y court.LLA 3a(%0 a,,(+#-#d /0 %"# .a+*'(#, n#,*#$% o( (#.'&a* o. ano%"#( %o 3#(.o(2 'nd#( an a,(##2#n% +n 1(+%+n, 3(o-+d+n, .o( a(/+%(a%+on 2a0 3#%+%+on %"# $o'(% .o( an o(d#( d+(#$%+n, %"a% &'$" a(/+%(a%+on 3(o$##d +n %"# 2ann#( 3(o-+d#d .o( +n &'$" a,(##2#n%) ,i!e 'a-s notice in =ritin+ of the hearin+ of such application shall be ser!e' either personall- or b- re+istere' *ail upon the part- in 'efault) T"# $o'(% &"a** "#a( %"# 3a(%+#&, and '3on /#+n, &a%+&.+#d %"a% %"# 2a6+n, o. %"# a,(##2#n% o( &'$" .a+*'(# %o $o23*0 %"#(#1+%" +& no% +n +&&'#, &"a** 2a6# an o(d#( d+(#$%+n, %"# 3a(%+#& %o
0. BF Corporation v. C", $)R) No) .01.15, March 07, .<<2, 022 SCR% 047E #uromines v. C", $)R) No) <.002, March 00, .<</, 001 SCR% 02.E General &nsurance and Surety Corporation v. 'nion &nsurance Society of Canton, et al., $)R) Nos) /1875 74, No!e*ber 00, .<2<, .7< SCR% 5/1E Gascon v. "rroyo, $)R) No) 72/2<, October .4, .<2<, .72 SCR% 520E Bengson v. C!an, No) & 0702/, (ul- 0<, .<77, 72 SCR% ../E Mindanao #ortland Cement Corporation v. McDonoug! Construction Company of Florida , No) & 0//<1, %pril 08, .<47, .< SCR% 212)

3(o$##d %o a(/+%(a%+on +n a$$o(dan$# 1+%" %"# %#(2& o. %"# a,(##2#n%. I. %"# 2a6+n, o. %"# a,(##2#n% o( d#.a'*% /# +n +&&'# %"# $o'(% &"a** 3(o$##d %o &'22a(+*0 "#a( &'$" +&&'#. I. %"# .+nd+n, /# %"a% no a,(##2#n% +n 1(+%+n, 3(o-+d+n, .o( a(/+%(a%+on 1a& 2ad#, o( %"a% %"#(# +& no d#.a'*% +n %"# 3(o$##d+n, %"#(#'nd#(, %"# 3(o$##d+n, &"a** /# d+&2+&&#d. I. %"# .+nd+n, /# %"a% a 1(+%%#n 3(o-+&+on .o( a(/+%(a%+on 1a& 2ad# and %"#(# +& a d#.a'*% +n 3(o$##d+n, %"#(#'nd#(, an o(d#( &"a** /# 2ad# &'22a(+*0 d+(#$%+n, %"# 3a(%+#& %o 3(o$##d 1+%" %"# a(/+%(a%+on +n a$$o(dan$# 1+%" %"# %#(2& %"#(#o.. 3333 Section 7) Stay of civil action.LLIf an- suit or procee'in+ be brou+ht upon an issue arisin+ out of an a+ree*ent pro!i'in+ for the arbitration thereof, the court in =hich such suit or procee'in+ is pen'in+, upon bein+ satisfie' that the issue in!ol!e' in such suit or procee'in+ is referable to arbitration, shall sta- the action or procee'in+ until an arbitration has been ha' in accor'ance =ith the ter*s of the a+ree*ent: Pro!i'e', That the applicant, for the sta- is not in 'efault in procee'in+ =ith such arbitration) :E*phasis supplie');

In other =or's, in the e!ent a case that shoul' properl- be the sub9ect of !oluntar- arbitration is erroneousl- file' =ith the courts or Auasi 9u'icial a+encies, on *otion of the 'efen'ant, the court or Auasi 9u'icial a+enc- shall 'eter*ine =hether such contractual pro!ision for arbitration is sufficient an' effecti!e) If in affir*ati!e, the court or Auasi 9u'icial a+enc- shall then or'er the enforce*ent of sai' pro!ision) #esi'es, in BF Corporation v. Court of "ppeals, =e alrea'- rule':
In this connection, it bears stressin+ that the lo=er court has not lost its 9uris'iction o!er the case) Section 7 of Republic %ct No) 274 pro!i'es that procee'in+s therein ha!e onl- been sta-e') %fter the special procee'in+ of arbitration has been pursue' an' co*plete', then the lo=er court *a- confir* the a=ar' *a'e b- the arbitrator)00

()$) Realt-?s contention, that prior resort to arbitration is una!ailin+ in the instant case because the PO%?s *an'ate is to arbitrate 'isputes in!ol!in+ *ineral a+ree*ents, is *isplace') % 'istinction *ust be *a'e bet=een !oluntar- an' co*pulsor- arbitration) In (udo and (uym Corporation v. Saordino, the Court ha' the occasion to 'istin+uish bet=een the t=o t-pes of arbitrations:
Co*parati!el-, in Reformist 'nion of R.B. (iner, &nc. vs. )(RC , co*pulsor- arbitration has been 'efine' both as Hthe process of settle*ent of labor 'isputes b- a ,o-#(n2#n% a,#n$0 1"+$" "a& %"# a'%"o(+%0 %o
00

Supra at 025)

+n-#&%+,a%# and %o 2a6# an a1a(d =hich is bin'in+ on all the parties, an' as a *o'e of arbitration =here the parties are co*pelle' to accept the resolution of their 'ispute throu+h arbitration b- a thir' part-)I >hile a !oluntar- arbitrator is no% 3a(% o. %"# ,o-#(n2#n%a* 'n+% o( *a/o( d#3a(%2#n%)& 3#(&onn#*, sai' arbitrator ren'ers arbitration ser!ices pro!i'e' for un'er labor la=s)0/ :E*phasis supplie');

There is a clear 'istinction bet=een co*pulsor- an' !oluntararbitration) The arbitration pro!i'e' b- the PO% is co*pulsor-, =hile the nature of the arbitration pro!ision in the R%>OP is !oluntar-, not in!ol!in+ an- +o!ern*ent a+enc-) Thus, ()$) Realt-?s ar+u*ent on this *atter *ust fail) %s to ()$) Realt-?s contention that the pro!isions of R% 274 cannot appl- to the instant case =hich in!ol!es an a'*inistrati!e a+enc-, it *ust be pointe' out that Section ..)1. of the R%>OP states that:
F%n- contro!ers- =ith re+ar' to the contractG shall not be cause of an- action of an- 6in' =hatsoe!er in an- court or ad2+n+&%(a%+-# a,#n$0 but shall, upon notice of one part- to the other, be referre' to a #oar' of %rbitrators consistin+ of three :/; *e*bers, one to be selecte' b#EN$UET, another to be selecte' b- the O>NER an' the thir' to be selecte' b- the afore*entione' t=o arbiters so appointe') 08 :E*phasis supplie');

There can be no Auibblin+ that PO% is a Auasi 9u'icial bo'- =hich for*s part of the DENR, an a'*inistrati!e a+enc-) Dence, the pro!ision on *an'ator- resort to arbitration, freel- entere' into b- the parties, *ust be hel' bin'in+ a+ainst the*)05 In su*, on the issue of =hether PO% shoul' ha!e referre' the case to !oluntar- arbitration, =e fin' that, in'ee', PO% has no 9uris'iction o!er the 'ispute =hich is +o!erne' b- R% 274, the arbitration la=) Do=e!er, =e fin' that #en+uet is alrea'- estoppe' fro* Auestionin+ the PO%?s 9uris'iction) %s it =ere, =hen ()$) Realt- file' DENR Case No) 0111 1., #en+uet file' its ans=er an' participate' in the procee'in+s before
0/ 08

$)R) No) .81<41, (anuar- 01, 011/, /<5 SCR% 85., 857 852) Rollo, p) <1) 05 C!an v. C", $)R) No) .87<<<, ,ebruar- 07, 0118, 808 SCR% .07, ./8)

the PO%, Re+ion V) Secon'l-, =hen the a'!erse March .<, 011. PO% Decision =as ren'ere', it file' an appeal =ith the M%# in Mines %'*inistrati!e Case No) R M 0111 1. an' a+ain participate' in the M%# procee'in+s) >hen the a'!erse Dece*ber 0, 0110 M%# Decision =as pro*ul+ate', it file' a *otion for reconsi'eration =ith the M%#) >hen the a'!erse March .7, 0118 M%# Resolution =as issue', #en+uet file' a petition =ith this Court pursuant to Sec) 7< of R% 7<80 i*plie'lreco+niCin+ M%#?s 9uris'iction) In this factual *ilieu, the Court rules that the 9uris'iction of PO% an' that of M%# can no lon+er be Auestione' b#en+uet at this late hour) >hat #en+uet shoul' ha!e 'one =as to i**e'iatel- challen+e the PO%?s 9uris'iction b- a special ci!il action for certiorari =hen PO% rule' that it has 9uris'iction o!er the 'ispute) To re'o the procee'in+s full- participate' in b- the parties after the lapse of se!en -ears fro* 'ate of institution of the ori+inal action =ith the PO% =oul' be anathe*a to the spee'- an' efficient a'*inistration of 9ustice) S#$ond I&&'#! T"# $an$#**a%+on o. %"# RA7OP 1a& &'33o(%#d /0 #-+d#n$# The cancellation of the R%>OP b- the PO% =as base' on t=o +roun's: :.; #en+uet?s failure to pa- ()$) Realt-?s ro-alties for the *inin+ clai*sE an' :0; #en+uet?s failure to seriousl- pursue MPS% %pplication No) %PS% V 111< o!er the *inin+ clai*s) %s to the ro-alties, #en+uet clai*s that the chec6s representin+ pa-*ents for the ro-alties of ()$) Realt- =ere a!ailable for pic6 up in its office an' it is the latter =hich refuse' to clai* the*) #en+uet then thus conclu'es that it 'i' not !iolate the R%>OP for nonpa-*ent of ro-alties) ,urther, #en+uet reasons that ()$) Realt- has the bur'en of pro!in+ that the for*er 'i' not pa- such ro-alties follo=in+ the principle that the co*plainants *ust pro!e their affir*ati!e alle+ations)

>ith re+ar' to the failure to pursue the MPS% application, #en+uet clai*s that the len+th- ti*e of appro!al of the application is 'ue to the failure of the M$# to appro!e it) In other =or's, #en+uet ar+ues that the appro!al of the application is solel- in the han's of the M$#) #en+uet?s ar+u*ents are bereft of *erit) Sec) .8)15 of the R%>OP pro!i'es:
.8)15 #an6 %ccount O>NER shall *aintain a ban6 account at MMMMMMMMMMM or another ban6 fro* ti*e to ti*e selecte' b- O>NER =ith notice in =ritin+ to #EN$UET =here #EN$UET shall 'eposit to the O>NER?s cre'it anan' all a'!ances an' pa-*ents =hich *a- beco*e 'ue the O>NER un'er this %+ree*ent as =ell as the purchase price herein a+ree' upon in the e!ent that #EN$UET shall e3ercise the option to purchase pro!i'e' for in the %+ree*ent) An0 and a** d#3o&+%& &o 2ad# /0 BENGUET &"a** /# a .'** and $o23*#%# a$8'+%%an$# and (#*#a&# %o FsicG BENGUET .(o2 an0 .'(%"#( *+a/+*+%0 %o %"# O7NER o. %"# a2o'n%& (#3(#&#n%#d /0 &'$" d#3o&+%&. :E*phasis supplie');

E!i'entl-, the R%>OP itself pro!i'es for the *o'e of ro-altpa-*ent b- #en+uet) The fact that there =as the pre!ious practice =hereb()$) Realt- pic6e' up the chec6s fro* #en+uet is una!ailin+) The *o'e of pa-*ent is e*bo'ie' in a contract bet=een the parties) %s such, the contract *ust be consi'ere' as the la= bet=een the parties an' bin'in+ on both) 04 Thus, after ()$) Realt- infor*e' #en+uet of the ban6 account =here 'eposits of its ro-alties *a- be *a'e, #en+uet ha' the obli+ation to 'eposit the chec6s) ()$) Realt- ha' no obli+ation to furnish #en+uet =ith a #oar' Resolution consi'erin+ that the R%>OP itself pro!i'e' for such pa-*ent sche*e) Notabl-, #en+uet?s clai* that ()$) Realt- *ust pro!e nonpa-*ent of its ro-alties is both illo+ical an' unsupporte' b- la= an' 9urispru'ence)

04

CIVI& CODE, %rts) ..5< K ./12)

The alle+ation of nonpa-*ent is not a positi!e alle+ation as clai*e' b- #en+uet) Rather, such is a ne+ati!e alle+ation that 'oes not reAuire proof an' in fact transfers the bur'en of proof to #en+uet) Thus, this Court rule' in Jimene* v) )ational (a$or Relations Commission:
%s a +eneral rule, one =ho plea's pa-*ent has the bur'en of pro!in+ it) E!en =here the plaintiff *ust alle+e non pa-*ent, the +eneral rule is that the bur'en rests on the 'efen'ant to pro!e pa-*ent, rather than on the plaintiff to pro!e non pa-*ent) T"# d#/%o( "a& %"# /'(d#n o. &"o1+n, 1+%" *#,a* $#(%a+n%0 %"a% %"# o/*+,a%+on "a& /##n d+&$"a(,#d /0 3a02#n%.07 :E*phasis supplie');

In the instant case, the obli+ation of #en+uet to pa- ro-alties to ()$) Realt- has been a'*itte' an' supporte' b- the pro!isions of the R%>OP) Thus, the bur'en to pro!e such obli+ation rests on #en+uet) It shoul' also be borne in *in' that MPS% %pplication No) %PS% V 111< has been pen'in+ =ith the M$# for a consi'erable len+th of ti*e) #en+uet, in the R%>OP, obli+ate' itself to perfect the ri+hts to the *inin+ clai*s an'@or other=ise acAuire the *inin+ ri+hts to the *ineral clai*s but faile' to present an- e!i'ence sho=in+ that it e3erte' efforts to spee' up an' ha!e the application appro!e') In fact, #en+uet ne!er e!en alle+e' that it continuousl- follo=e' up the application =ith the M$# an' that it =as in constant co**unication =ith the +o!ern*ent a+enc- for the e3pe'itious resolution of the application) Such alle+ations =oul' sho= that, in'ee', #en+uet =as re*iss in prosecutin+ the MPS% application an' clearl- faile' to co*pl- =ith its obli+ation in the R%>OP) T"+(d I&&'#! T"#(# +& no 'n5'&% #n(+$"2#n% +n %"# +n&%an% $a&# #ase' on the fore+oin+ 'iscussion, the cancellation of the R%>OP =as base' on !ali' +roun's an' is, therefore, 9ustifie') The necessari*plication of the cancellation is the cessation of #en+uet?s ri+ht to prosecute MPS% %pplication No) %PS% V 111< an' to further 'e!elop such *inin+ clai*s)
07

$)R) No) ..4<41, %pril 0, .<<4, 054 SCR% 28, 2<)

In Car Cool #!ilippines, &nc. v. 's!io Realty and Development Corporation, =e 'efine' un9ust enrich*ent, as follo=s:
>e ha!e hel' that HFtGhere is un9ust enrich*ent =hen a person 'n5'&%*0 retains a benefit to the loss of another, or =hen a person retains *one- or propert- of another a+ainst the fun'a*ental principles of 9ustice, eAuit- an' +oo' conscience)I %rticle 00 of the Ci!il Co'e pro!i'es that HFeG!er- person =ho throu+h an act of perfor*ance b- another, or another *eans, acAuires or co*es into possession of so*ethin+ at the e3pense of the latter =ithout 9ust or le+al +roun', shall return the sa*e to hi*)I The principle of un9ust enrich*ent un'er %rticle 00 reAuires t=o con'itions: :.; that a person is benefite' =ithout a !ali' basis or 9ustification, an' :0; that such benefit is 'eri!e' at another?s e3pense or 'a*a+e) T"#(# +& no 'n5'&% #n(+$"2#n% 1"#n %"# 3#(&on 1"o 1+** /#n#.+% "a& a -a*+d $*a+2 %o &'$" /#n#.+%.02 :E*phasis supplie');

Clearl-, there is no un9ust enrich*ent in the instant case as the cancellation of the R%>OP, =hich left #en+uet =ithout an- le+al ri+ht to participate in further 'e!elopin+ the *inin+ clai*s, =as brou+ht about b- its !iolation of the R%>OP) Dence, #en+uet has no one to bla*e but itself for its pre'ica*ent) 79EREFORE, =e DISMISS the petition, an' AFFIRM the Dece*ber 0, 0110 Decision an' March .7, 0118 Resolution of the DENR M%# in M%# Case No) 1.08 1. uphol'in+ the cancellation of the (une ., .<27 R%>OP) No costs) SO ORDERED.

PRESBITERO J. VELASCO, JR. %ssociate (ustice >E CONCUR:

LEONARDO A. :UISUMBING
02

$)R) No) ./2122, (anuar- 0/, 0114, 87< SCR% 818, 8.0 8./)

%ssociate (ustice Chairperson

ANTONIO T. CARPIO %ssociate (ustice

CONC9ITA CARPIO MORALES %ssociate (ustice

DANTE O. TINGA %ssociate (ustice

ATTESTATION I attest that the conclusions in the abo!e Decision ha' been reache' in consultation before the case =as assi+ne' to the =riter of the opinion of the Court?s Di!ision)

LEONARDO A. :UISUMBING %ssociate (ustice Chairperson

CERTIFICATION Pursuant to Section ./, %rticle VIII of the Constitution, an' the Di!ision Chairperson?s %ttestation, I certif- that the conclusions in the abo!e Decision ha' been reache' in consultation before the case =as assi+ne' to the =riter of the opinion of the Court?s Di!ision)

RE NATO S. PUNO Chief (ustice