FIRST DIVISION

[G.R. No. 86695. September 3, 1992.]

MARIA ELENA MALAGA, doing business under the name B.E. CONSTRUCTION; JOSIELEEN
NAJARRO, doing business under the name BEST BUILT CONSTRUCTION; JOSE N. OCCEA, doing
business under the name THE FIRM OF JOSE N. OCCEA; and the ILOILO BUILDERS
CORPORATION, Petitioners, v. MANUEL R. PENACHOS, JR., ALFREDO MATANGGA, ENRICO TICAR
AND TERESITA VILLANUEVA, in their respective capacities as Chairman and Members of the Pre-
qualification Bids and Awards Committee (PBAC)-BENIGNO PANISTANTE, in his capacity as President
of Iloilo State College of Fisheries, as well as in their respective personal capacities; and HON.
LODRIGIO L. LEBAQUIN, Respondents.

Salas, Villareal & Velasco, for Petitioners.

Virgilio A. Sindico for Respondents.

SYLLABUS

1. ADMINISTRATIVE LAW; GOVERNMENT INSTRUMENTALITY, DEFINED. The 1987 Administrative Code

defines a government instrumentality as follows: Instrumentality refers to any agency of the National
Government, not integrated within the department framework, vested with special functions or jurisdiction by law,
endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy,
usually through a charter. This term includes regulatory agencies, chartered institutions, and government-owned
or controlled corporations. (Sec. 2 (5) Introductory Provisions).

2. ID.; CHARTERED INSTITUTION; DEFINED; APPLICATION IN CASE AT BAR. The 1987 Administrative
Code describes a chartered institution thus: Chartered institution refers to any agency organized or operating
under a special charter, and vested by law with functions relating to specific constitutional policies or objectives.
This term includes the state universities and colleges, and the monetary authority of the state. (Sec. 2 (12)
Introductory Provisions). It is clear from the above definitions that ISCOF is a chartered institution and is therefore
covered by P.D. 1818. There are also indications in its charter that ISCOF is a government instrumentality. First,
it was created in pursuance of the integrated fisheries development policy of the State, a priority program of the
government to effect the socio-economic life of the nation. Second, the Treasurer of the Republic of the
Philippines shall also be the ex-officio Treasurer of the state college with its accounts and expenses to be audited
by the Commission on Audit or its duly authorized representative. Third, heads of bureaus and offices of the
National Government are authorized to loan or transfer to it, upon request of the president of the state college,
such apparatus, equipment, or supplies and even the services of such employees as can be spared without
serious detriment to public service. Lastly, an additional amount of P1.5M had been appropriated out of the funds
of the National Treasury and it was also decreed in its charter that the funds and maintenance of the state college
would henceforth be included in the General Appropriations Law. (Presidential Decree No. 1523)

3. ID.; PROHIBITION OF ANY COURT FROM ISSUING INJUNCTION IN CASES INVOLVING

INFRASTRUCTURE PROJECTS OF GOVERNMENT (P.D. 1818); POWER OF THE COURTS TO RESTRAIN
APPLICATION. In the case of Datiles and Co. v. Sucaldito, (186 SCRA 704) this Court interpreted a similar
prohibition contained in P.D. 605, the law after which P.D. 1818 was patterned. It was there declared that the
prohibition pertained to the issuance of injunctions or restraining orders by courts against administrative acts in
controversies involving facts or the exercise of discretion in technical cases. The Court observed that to allow
the courts to judge these matters would disturb the smooth functioning of the administrative machinery. Justice
Teodoro Padilla made it clear, however, that on issues definitely outside of this dimension and involving
questions of law, courts could not be prevented by P.D. No. 605 from exercising their power to restrain or prohibit
administrative acts. We see no reason why the above ruling should not apply to P.D. 1818. There are at least
two irregularities committed by PBAC that justified injunction of the bidding and the award of the project.
4. ID.; POLICIES AND GUIDELINES PRESCRIBED FOR GOVERNMENT INFRASTRUCTURE (PD 1594);
RULES IMPLEMENTING THEREOF, NOT SUFFICIENTLY COMPLIED WITH IN CASE AT BAR. Under the
Rules Implementing P.D. 1594, prescribing policies and guidelines for government infrastructure contracts,
PBAC shall provide prospective bidders with the Notice to Pre-qualification and other relevant information
regarding the proposed work. Prospective contractors shall be required to file their ARC-Contractors Confidential
Application for Registration & Classifications & the PRE-C2 Confidential Pre-qualification Statement for the
Project (prior to the amendment of the rules, this was referred to as Pre-C1) not later than the deadline set in the
published Invitation to Bid, after which date no PRE-C2 shall be submitted and received. Invitations to Bid shall
be advertised for at least three times within a reasonable period but in no case less than two weeks in at least
two newspapers of general circulations. (IB 13 1.2-19, Implementing Rules and Regulations of P.D. 1594 as
amended) PBAC advertised the pre-qualification deadline as December 2, 1988, without stating the hour thereof,
and announced that the opening of bids would be at 3 oclock in the afternoon of December 12, 1988. This
scheduled was changed and a notice of such change was merely posted at the ISCOF bulletin board. The notice
advanced the cut-off time for the submission of pre-qualification documents to 10 oclock in the morning of
December 2, 1988, and the opening of bids to 1 oclock in the afternoon of December 12, 1988. The new
schedule caused the pre-disqualification of the petitioners as recorded in the minutes of the PBAC meeting held
on December 6, 1988. While it may be true that there were fourteen contractors who were pre-qualified despite
the change in schedule, this fact did not cure the defect of the irregular notice. Notably, the petitioners were
disqualified because they failed to meet the new deadline and not because of their expired licenses. (B.E. & Best
Builts licenses were valid until June 30, 1989. [Ex. P & O respectively: both were marked on December 28,
1988]) We have held that where the law requires a previous advertisement before government contracts can be
awarded, non-compliance with the requirement will, as a general rule, render the same void and of no effect.
(Caltex Phil. v. Delgado Bros., 96 Phil. 368) The fact that an invitation for bids has been communicated to a
number of possible bidders is not necessarily sufficient to establish compliance with the requirements of the law
if it is shown that other possible bidders have not been similarly notified.

5. ID.; ID.; ID.; PURPOSE THEREOF; CASE AT BAR. The purpose of the rules implementing P.D. 1594 is to
secure competitive bidding and to prevent favoritism, collusion and fraud in the award of these contracts to the
detriment of the public. This purpose was defeated by the irregularities committed by PBAC. It has been held
that the three principles in public bidding are the offer to the public, an opportunity for competition and a basis
for exact comparison of bids. A regulation of the matter which excludes any of these factors destroys the
distinctive character of the system and thwarts the purpose of its adoption. (Hannan v. Board of Education, 25
Okla. 372) In the case at bar, it was the lack of proper notice regarding the pre-qualification requirement and the
bidding that caused the elimination of petitioners B.E. and Best Built. It was not because of their expired licenses,
as private respondents now claim. Moreover, the plans and specifications which are the contractors guide to an
intelligent bid, were not issued on time, thus defeating the guaranty that contractors be placed on equal footing
when they submit their bids. The purpose of competitive bidding is negated if some contractors are informed
ahead of their rivals of the plans and specifications that are to be the subject of their bids.

6. ID.; ID.; ID.; EFFECT OF NON-COMPLIANCE THEREOF. It has been held in a long line of cases that a
contract granted without the competitive bidding required by law is void, and the party to whom it is awarded
cannot benefit from it. It has not been shown that the irregularities committed by PBAC were induced by or
participated in by any of the contractors. Hence, liability shall attach only to the private respondents for the
prejudice sustained by the petitioners as a result of the anomalies described above.

7. CIVIL LAW; NOMINAL DAMAGES; AWARD THEREOF, WHEN AVAILABLE. As there is no evidence of
the actual loss suffered by the petitioners, compensatory damage may not be awarded to them. Moral damages
do not appear to be due either. Even so, the Court cannot close its eyes to the evident bad faith that characterized
the conduct of the private respondents, including the irregularities in the announcement of the bidding and their
efforts to persuade the ISCOF president to award the project after two days from receipt of the restraining order
and before they moved to lift such order. For such questionable acts, they are liable in nominal damages at least
in accordance with Article 2221 of the Civil Code, which states: Art. 2221. Nominal damages are adjudicated in
order that a right of the plaintiff, which has been violated or invaded by the defendant may be vindicated or,
recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him. These damages
are to be assessed against the private respondents in the amount of P10,000.00 each, to be paid separately for
each of petitioners B.E. Construction and Best Built Construction.
DECISION

CRUZ, J.:

This controversy involves the extent and applicability of P.D. 1818, which prohibits any court from issuing
injunctions in cases involving infrastructure projects of the government.chanrobles.com.ph : virtual law library

The facts are not disputed.

The Iloilo State College of Fisheries (henceforth ISCOF) through its Pre-qualification, Bids and Awards
Committee (henceforth PBAC) caused the publication in the November 25, 26, 28, 1988 issues of the Western
Visayas Daily an Invitation to Bid for the construction of the Micro Laboratory Building at ISCOF. The notice
announced that the last day for the submission of pre-qualification requirements (PRE C-1) ** was December 2,
1988, and that the bids would be received and opened on December 12, 1988, 3 oclock in the afternoon. 1

Petitioners Maria Elena Malaga and Josieleen Najarro, respectively doing business under the name of the B.E.
Construction and Best Built Construction, submitted their pre-qualification documents at two oclock in the
afternoon of December 2, 1988. Petitioner Jose Occea submitted his own PRE-C1 on December 5, 1988. All
three of them were not allowed to participate in the bidding because their documents were considered late,
having been submitted after the cut-off time of ten oclock in the morning of December 2, 1988.

On December 12, 1988, the petitioners filed a complaint with the Regional Trial Court of Iloilo against the
chairman and members of PBAC in their official and personal capacities. The plaintiffs claimed that although
they had submitted their PRE-C1 on time, the PBAC refused without just cause to accept them. As a result, they
were not included in the list of pre-qualified bidders, could not secure the needed plans and other documents,
and were unable to participate in the scheduled bidding.

In their prayer, they sought the resetting of the December 12, 1988 bidding and the acceptance of their PRE-C1
documents. They also asked that if the bidding had already been conducted, the defendants be directed not to
award the project pending resolution of their complaint.

On the same date, Judge Lodrigio L. Lebaquin issued a restraining order prohibiting PBAC from conducting the
bidding and awarding the project. 2

On December 16, 1988, the defendants filed a motion to lift the restraining order on the ground that the Court
was prohibited from issued restraining orders, preliminary injunctions and preliminary mandatory injunctions by
P.D. 1818.chanroblesvirtualawlibrary

The decree reads pertinently as follows:chanrob1es virtual 1aw library

Section 1. No Court in the Philippines shall have jurisdiction to issue any restraining order, preliminary injunction,
or preliminary infrastructure project, or a mining, fishery, forest or other natural resource development project of
the government, or any public utility operated by the government, including among others public utilities for the
transport of the goods and commodities, stevedoring and arrastre contracts, to prohibit any person or persons,
entity or government official from proceeding with, or continuing the execution or implementation of any such
project, or the operation of such public utility, or pursuing any lawful activity necessary for such execution,
implementation or operation.

The movants also contended that the question of the propriety of a preliminary injunction had become moot and
academic because the restraining order was received late, at 2 oclock in the afternoon of December 12, 1988,
after the bidding had been conducted and closed at eleven thirty in the morning of that date.
In their opposition of the motion, the plaintiffs argued against the applicability of P.D. 1818, pointing out that while
ISCOF was a state college, it had its own charter and separate existence and was not part of the national
government or of any local political subdivision. Even if P.D. 1818 were applicable, the prohibition presumed a
valid and legal government project, not one tainted with anomalies like the project at bar.

They also cited Filipinas Marble Corp. v. IAC, 3 where the Court allowed the issuance of a writ of preliminary
injunction despite a similar prohibition found in P.D. 385. The Court therein stated that:chanrob1es virtual 1aw
library

The government, however, is bound by basic principles of fairness and decency under the due process clauses
of the Bill of Rights. P.D. 385 was never meant to protect officials of government-lending institutions who take
over the management of a borrower corporation, lead that corporation to bankruptcy through mismanagement
or misappropriation of its funds, and who, after ruining it, use the mandatory provisions of the decree to avoid
the consequences of their misleads (p. 188, Emphasis supplied).

On January 2, 1989, the trial court lifted the restraining order and denied the petition for preliminary injunction. It
declared that the building sought to be construed at the ISCOF was an infrastructure project of the government
falling within the coverage of P.D. 1818. Even if it were not, the petition for the issuance of a writ of preliminary
injunction would still fail because the sheriffs return showed that PBAC was served a copy of the restraining
order after the bidding sought to be restrained had already been held. Furthermore, the members of the PBAC
could not be restrained from awarding the project because the authority to do so was lodged in the President of
the ISCOF, who was not a party to the case. 4

In the petition now before us, it is reiterated that P.D. 1818 does not cover the ISCOF because of its separate
and distinct corporate personality. It is also stressed again that the prohibition under P.D. 1818 could not apply
to the present controversy because the project was vitiated with irregularities, to wit:chanrobles.com : virtual law
library

1. The invitation to bid as published fixed the deadline of submission of pre-qualification document on December
2, 1988 without indicating any time, yet after 10:00 oclock of the given late, the PBAC already refused to accept
petitioners documents.

2. The time and date of bidding was published as December 12, 1988 at 3:00 p.m. yet it was held at 10:00 oclock
in the morning.

3. Private respondents, for the purpose of inviting bidders to participate, issued a mimeographed "Invitation to
Bid" form, which by law (P.D. 1594 and Implementing Rules, Exh. B-1) is to contain the particulars of the project
subject of bidding for the purpose of.

(i) enabling bidders to make an intelligent and accurate bids;

(ii) for PBAC to have a uniform basis for evaluating the bids;

(iii) to prevent collusion between a bidder and the PBAC, by opening to all the particulars of a project.

Additionally, the Invitation to Bid prepared by the respondents and the Itemized Bill of Quantities therein were
left blank. 5 And although the project in question was a "Construction," the private respondents used an Invitation
to Bid form for "Materials." 6

The petitioners also point out that the validity of the writ of preliminary injunction had not yet become moot and
academic because even if the bids had been opened before the restraining order was issued, the project itself
had not yet been awarded. The ISCOF president was not an indispensable party because the signing of the
award was merely a ministerial function which he could perform only upon the recommendation of the Award
Committee. At any rate, the complaint had already been duly amended to include him as a party defendant.

In their Comment, the private respondents maintain that since the members of the board of trustees of the ISCOF
are all government officials under Section 7 of P.D. 1523 and since the operations and maintenance of the
ISCOF are provided for in the General Appropriations Law, it is should be considered a government institution
whose infrastructure project is covered by P.D. 1818.

Regarding the schedule for pre-qualification, the private respondents insist that PBAC posted on the ISCOF
bulletin board an announcement that the deadline for the submission of pre-qualifications documents was at 10
oclock of December 2, 1988, and the opening of bids would be held at 1 oclock in the afternoon of December
12, 1988. As of ten oclock in the morning of December 2, 1988, B.E. construction and Best Built construction
had filed only their letters of intent. At two oclock in the afternoon, B.E., and Best Built filed through their common
representative, Nenette Garuello, their pre-qualification documents which were admitted but stamped "submitted
late." The petitioners were informed of their disqualification on the same date, and the disqualification became
final on December 6, 1988. Having failed to take immediate action to compel PBAC to pre-qualify them despite
their notice of disqualification, they cannot now come to this Court to question the binding proper in which they
had not participated.

In the petitioners Reply, they raise as an additional irregularity the violation of the rule that where the estimate
project cost is from P1M to P5M, the issuance of plans, specifications and proposal book forms should made
thirty days before the date of bidding. 7 They point out that these forms were issued only on December 2, 1988,
and not at the latest on November 12, 1988, the beginning of the 30-day period prior to the scheduled bidding.

In their Rejoinder, the private respondents aver that the documents of B.E. and Best Built were received although
filed late and were reviewed by the Award Committee, which discovered that the contractors had expired
licenses. B.E.s temporary certificate of Renewal of Contractors License was valid only until September 30,
1988, while Best Builts license was valid only up to June 30, 1988.chanrobles lawlibrary : rednad

The Court has considered the arguments of the parties in light of their testimonial and documentary evidence
and the applicable laws and jurisprudence. It finds for the petitioners.

The 1987 Administrative Code defines a government instrumentality as follows:chanrob1es virtual 1aw library

Instrumentality refers to any agency of the National Government, not integrated within the department
framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers,
administering special funds, and enjoying operational autonomy, usually through a charter. This term includes
regulatory agencies, chartered institutions, and government-owned or controlled corporations. (Sec. 2 (5)
Introductory Provisions).

The same Code describes a chartered institution thus:chanrob1es virtual 1aw library

Chartered institution refers to any agency organized or operating under a special charter, and vested by law
with functions relating to specific constitutional policies or objectives. This term includes the state universities
and colleges, and the monetary authority of the state. (Sec. 2 (12) Introductory Provisions).

It is clear from the above definitions that ISCOF is a chartered institution and is therefore covered by P.D. 1818.

There are also indications in its charter that ISCOF is a government instrumentality. First, it was created in
pursuance of the integrated fisheries development policy of the State, a priority program of the government of
effect the socio-economic life of the nation. Second, the Treasurer of the Republic of the Philippines also be the
ex-officio Treasurer of the state college with its accounts and expenses to be audited by the Commission on
Audit or its duly authorized representative. Third, heads of bureaus and offices of the National Government are
authorized to loan or transfer to it, upon request of the president of the state college, such apparatus, equipment,
or supplies and even the services of such employees as can be spared without serious detriment to public
service. Lastly, an additional amount of P1.5M had been appropriated out of the funds of the National Treasury
and it was also decreed in its charter that the funds and maintenance of the state college would henceforth be
included in the General Appropriations Law. 8

Nevertheless, it does not automatically follow that ISCOF is covered by the prohibition in the said decree.
In the case of Datiles and Co. v. Sucaldito, 9 this Court interpreted a similar prohibition contained in P.D. 605,
the law after which P.D. 1818 was patterned. It was there declared that the prohibition pertained to the issuance
of injunctions or restraining orders by courts against administrative acts in controversies involving facts or the
exercise of discretion in technical cases. The Court observed that to allow the courts to judge these matters
would disturb the smooth functioning of the administrative machinery. Justice Teodoro Padilla made it clear,
however, that on issues definitely outside of this dimension and involving questions of law, courts could not be
prevented by P.D. No. 605 from exercising their power to restrain or prohibit administrative acts.

We see no reason why the above ruling should not apply to P.D. 1818.

There are at least two irregularities committed by PBAC that justified injunction of the bidding and the award of
the project.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

First, PBAC set deadlines for the filing of the PRE-C1 and the opening of bids and then changed these deadlines
without prior notice to prospective participants.

Under the Rules Implementing P.D. 1594, prescribing policies and guidelines for government infrastructure
contracts, PBAC shall provide prospective bidders with the Notice of Pre-qualification and other relevant
information regarding the proposed work. Prospective contractors shall be required to file their ARC-Contractors
Confidential Application for Registration & Classifications & the PRE-C2 Confidential Pre-qualification Statement
for the Project (prior to the amendment of the rules, this was referred to as PRE-C1) not later than the deadline
set in the published Invitation to Bid, after which date no PRE-C2 shall be submitted and received. Invitations to
Bid shall be advertised for at least three times within a reasonable period but in no case less than two weeks in
at least two newspapers of general circulations. 10

PBAC advertised the pre-qualification deadline as December 2, 1988, without stating the hour thereof, and
announced that the opening of bids would be at 3 oclock in the afternoon of December 12, 1988. This schedule
was changed and a notice of such change was merely posted at the ISCOF bulletin board. The notice advanced
the cut-off time for the submission of pre-qualification documents to 10 oclock in the morning of December 2,
1988, and the opening of bids to 1 oclock in the afternoon of December 12, 1988.

The new schedule caused the pre-disqualification of the petitioners as recorded in the minutes of the PBAC
meeting held on December 6, 1988. While it may be true that there were fourteen contractors who were pre-
qualified despite the change in schedule, this fact did not cure the defect of the irregular notice. Notably, the
petitioners were disqualified because they failed to meet the new deadline and not because of their expired
licenses. ***

We have held that where the law requires a previous advertisement before government contracts can be
awarded, non-compliance with the requirement will, as a general rule, render the same void and of no effect 11
The facts that an invitation for bids has been communicated to a number of possible bidders is not necessarily
sufficient to establish compliance with the requirements of the law if it is shown that other public bidders have
not been similarly notified. 12

Second, PBAC was required to issue to pre-qualified applicants the plans, specifications and proposal book
forms for the project to be bid thirty days before the date of bidding if the estimate project cost was between P1M
and P5M. PBAC has not denied that these forms were issued only on December 2, 1988, or only ten days before
the bidding scheduled for December 12, 1988. At the very latest, PBAC should have issued them on November
12, 1988, or 30 days before the scheduled bidding.

It is apparent that the present controversy did not arise from the discretionary acts of the administrative body nor
does it involve merely technical matters. What is involved here is non-compliance with the procedural rules on
bidding which required strict observance. The purpose of the rules implementing P.D. 1594 is to secure
competitive bidding and to prevent favoritism, collusion and fraud in the award of these contracts to the detriment
of the public. This purpose was defeated by the irregularities committed by PBAC.chanrobles law library : red
It has been held that the three principles in public bidding are the offer to the public, an opportunity for competition
and a basis for exact comparison of bids. A regulation of the matter which excludes any of these factors destroys
the distinctive character of the system and thwarts and purpose of its adoption. 13

In the case at bar, it was the lack of proper notice regarding the pre-qualification requirement and the bidding
that caused the elimination of petitioners B.E. and Best Built. It was not because of their expired licenses, as
private respondents now claim. Moreover, the plans and specifications which are the contractors guide to an
intelligent bid, were not issued on time, thus defeating the guaranty that contractors be placed on equal footing
when they submit their bids. The purpose of competitive bidding is negated if some contractors are informed
ahead of their rivals of the plans and specifications that are to be the subject of their bids.

P.D. 1818 was not intended to shield from judicial scrutiny irregularities committed by administrative agencies
such as the anomalies above described. Hence, the challenged restraining order was not improperly issued by
the respondent judge and the writ of preliminary injunction should not have been denied. We note from Annex
Q of the private respondents memorandum, however, that the subject project has already been "100%
completed as to the Engineering Standard." This fait accompli has made the petition for a writ of preliminary
injunction moot and academic.

We come now to the liabilities of the private respondents.

It has been held in a long line of cases that a contract granted without the competitive bidding required by law is
void, and the party to whom it is awarded cannot benefit from it. 14 It has not been shown that the irregularities
committed by PBAC were induced by or participated in by any of the contractors. Hence, liability shall attach
only to the private respondents for the prejudice sustained by the petitioners as a result of the anomalies
described above.

As there is no evidence of the actual loss suffered by the petitioners, compensatory damage may not be awarded
to them. Moral damages do not appear to be due either. Even so, the Court cannot close its eyes to the evident
bad faith that characterized the conduct of the private respondents, including the irregularities in the
announcement of the bidding and their efforts to persuade the ISCOF president to award the project after two
days from receipt of the restraining order and before they moved to lift such order. For such questionable acts,
they are liable in nominal damages at least in accordance with Article 2221 of the Civil Code, which
states:jgc:chanrobles.com.ph

"Art. 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or
invaded by the defendant may be vindicated or, recognized, and not for the purpose of indemnifying the plaintiff
for any loss suffered by him.

These damages are to assessed against the private respondents in the amount of P10,000.00 each, to be paid
separately for each of petitioners B.E. Construction and Best Built Construction. The other petitioner, Occea
Builders, is not entitled to relief because it admittedly submitted its pre-qualification documents on December 5,
1988, or three days after the deadline.chanrobles virtual lawlibrary

WHEREFORE, judgment is hereby rendered: a) upholding the restraining order dated December 12, 1988, as
not covered by the prohibition in P.D. 1818; b) ordering the chairman and the members of the PBAC board of
trustees, namely Manuel R. Penachos, Jr., Alfredo Matangga, Enrico Ticar, and Teresita Villanueva, to each pay
separately to petitioners Maria Elena Malaga and Josieleen Najarro nominal damages P10,000.00 each; and c)
removing the said chairman and members from the PBAC board of trustees, or whoever among them is still
incumbent therein, for their malfeasance in office. Costs against PBAC.

Let a copy of this decision be sent to the Office of the Ombudsman.

SO ORDERED.

Grio-Aquino, Medialdea and Bellosillo, JJ., concur.

SECOND DIVISION

[G.R. No. 134990. April 27, 2000]

MANUEL M. LEYSON JR., petitioner, vs. OFFICE OF THE OMBUDSMAN, TIRSO ANTIPORDA, Chairman,
UCPB and CIIF Oil Mills, and OSCAR A. TORRALBA, President, CIIF Oil Mills, respondents. ALEX

DECISION

BELLOSILLO, J.:

On 7 February 1996 International Towage and Transport Corporation (ITTC), a domestic corporation engaged
in the lighterage or shipping business, entered into a one (1)-year contract with Legaspi Oil Company, Inc.
(LEGASPI OIL), Granexport Manufacturing Corporation (GRANEXPORT) and United Coconut Chemicals, Inc.
(UNITED COCONUT), comprising the Coconut Industry Investment Fund (CIIF) companies, for the transport of
coconut oil in bulk through MT Transasia. The majority shareholdings of these CIIF companies are owned by the
United Coconut Planters Bank (UCPB) as administrator of the CIIF. Under the terms of the contract, either party
could terminate the agreement provided a three (3)-month advance notice was given to the other party. However,
in August 1996, or prior to the expiration of the contract, the CIIF companies with their new President, respondent
Oscar A. Torralba, terminated the contract without the requisite advance notice. The CIIF companies engaged
the services of another vessel, MT Marilag, operated by Southwest Maritime Corporation. miso

On 11 March 1997 petitioner Manuel M. Leyson Jr., Executive Vice President of ITTC, filed with public
respondent Office of the Ombudsman a grievance case against respondent Oscar A. Torralba. The following is
a summary of the irregularities and corrupt practices allegedly committed by respondent Torralba: (a) breach of
contract - unilateral cancellation of valid and existing contract; (b) bad faith - falsification of documents and
reports to stop the operation of MT Transasia; (c) manipulation - influenced their insurance to disqualify MT
Transasia; (d) unreasonable denial of requirement imposed; (e) double standards and inconsistent in favor of MT
Marilag; (f) engaged and entered into a contract with Southwest Maritime Corp. which is not the owner of MT
Marilag, where liabilities were waived and whose paid-up capital is only P250,000.00; and, (g) overpricing in the
freight rate causing losses of millions of pesos to Cocochem.[1]

On 2 January 1998 petitioner charged respondent Tirso Antiporda, Chairman of UCPB and CIIF Oil Mills, and
respondent Oscar A. Torralba with violation of The Anti-Graft and Corrupt Practices Act also before the
Ombudsman anchored on the aforementioned alleged irregularities and corrupt practices. spped

On 30 January 1998 public respondent dismissed the complaint based on its finding that

The case is a simple case of breach of contract with damages which should have been filed in
the regular court. This Office has no jurisdiction to determine the legality or validity of the
termination of the contract entered into by CIIF and ITTC. Besides the entities involved are private
corporations (over) which this Office has no jurisdiction.[2]

On 4 June 1998 reconsideration of the dismissal of the complaint was denied. The Ombudsman was unswayed
in his finding that the present controversy involved breach of contract as he also took into account the
circumstance that petitioner had already filed a collection case before the Regional Trial Court of Manila-Br. 15,
docketed as Civil Case No. 97-83354. Moreover, the Ombudsman found that the filing of the motion for
reconsideration on 31 March 1998 was beyond the inextendible period of five (5) days from notice of the assailed
resolution on 19 March 1998.[3] miso

Petitioner now imputes grave abuse of discretion on public respondent in dismissing his complaint. He submits
that inasmuch as Philippine Coconut Producers Federation, Inc. (COCOFED) v. PCGG[4] and Republic v.
Sandiganbayan[5] have declared that the coconut levy funds are public funds then, conformably with Quimpo v.
Tanodbayan,[6] corporations formed and organized from those funds or whose controlling stocks are from those
funds should be regarded as government owned and/or controlled corporations. As in the present case, since
the funding or controlling interest of the companies being headed by private respondents was given or owned
by the CIIF as shown in the certification of their Corporate Secretary,[7] it follows that they are government owned
and/or controlled corporations. Corollarily, petitioner asserts that respondents Antiporda and Torralba are public
officers subject to the jurisdiction of the Ombudsman. Sdaadsc

Petitioner alleges next that public respondent's conclusion that his complaint refers to a breach of contract is
whimsical, capricious and irresponsible amounting to a total disregard of its main point, i. e., whether private
respondents violated The Anti-Graft and Corrupt Practices Act when they entered into a contract with Southwest
Maritime Corporation which was grossly disadvantageous to the government in general and to the CIIF in
particular. Petitioner admits that his motion for reconsideration was filed out of time. Nonetheless, he advances
that public respondent should have relaxed its rules in the paramount interest of justice; after all, the delay was
just a matter of days and he, a layman not aware of technicalities, personally filed the complaint. Rtcspped

Private respondents counter that the CIIF companies were duly organized and are existing by virtue of the
Corporation Code. Their stockholders are private individuals and entities. In addition, private respondents
contend that they are not public officers as defined under The Anti-Graft and Corrupt Practices Act but are private
executives appointed by the Boards of Directors of the CIIF companies. They asseverate that petitioner's motion
for reconsideration was filed through the expert assistance of a learned counsel. They then charge petitioner
with forum shopping since he had similarly filed a case for collection of a sum of money plus damages before
the trial court.

The Office of the Solicitor General maintains that the Ombudsman approved the recommendation of the
investigating officer to dismiss the complaint because he sincerely believed there was no sufficient basis for the
criminal indictment of private respondents. spped

We find no grave abuse of discretion committed by the Ombudsman. COCOFED v. PCGG referred to in Republic
v. Sandiganbayan reviewed the history of the coconut levy funds. I These funds actually have four (4) general
classes: (a) the Coconut Investment Fund created under R. A. No. 6260;[8] (b) the Coconut Consumers
Stabilization Fund created under P. D. No. 276;[9](c) the Coconut Industry Development Fund created under P.
D. No. 582;[10] and, (d) the Coconut Industry Stabilization Fund created under P. D. No. 1841.[11]

The various laws relating to the coconut industry were codified in 1976. On 21 October of that year, P. D. No.
961[12] was promulgated. On 11 June 1978 it was amended by P. D. No. 1468[13] by inserting a new provision
authorizing the use of the balance of the Coconut Industry Development Fund for the acquisition of "shares of
stocks in corporations organized for the purpose of engaging in the establishment and operation of industries x
x x commercial activities and other allied business undertakings relating to coconut and other palm oil
indust(ries)."[14]From this fund thus created, or the CIIF, shares of stock in what have come to be known as the
"CIIF companies" were purchased. miso

We then stated in COCOFED that the coconut levy funds were raised by the State's police and taxing powers
such that the utilization and proper management thereof were certainly the concern of the Government. These
funds have a public character and are clearly affected with public interest.

Quimpo v. Tanodbayan involved the issue as to whether PETROPHIL was a government owned or controlled
corporation the employees of which fell within the jurisdictional purview of the Tanodbayan for purposes of The
Anti-Graft and Corrupt Practices Act. We upheld the jurisdiction of the Tanodbayan on the ratiocination that -

While it may be that PETROPHIL was not originally "created" as a government-owned or

controlled corporation, after it was acquired by PNOC, which is a government-owned or controlled
corporation, PETROPHIL became a subsidiary of PNOC and thus shed-off its private status. It is
now funded and owned by the government as, in fact, it was acquired to perform functions related
to government programs and policies on oil, a vital commodity in the economic life of the nation.
It was acquired not temporarily but as a permanent adjunct to perform essential government or
government-related functions, as the marketing arm of the PNOC to assist the latter in selling and
distributing oil and petroleum products to assure and maintain an adequate and stable domestic
supply. Korte
But these jurisprudential rules invoked by petitioner in support of his claim that the CIIF companies are
government owned and/or controlled corporations are incomplete without resorting to the definition of
"government owned or controlled corporation" contained in par. (13), Sec. 2, Introductory Provisions of the
Administrative Code of 1987, i. e., any agency organized as a stock or non-stock corporation vested with
functions relating to public needs whether governmental or proprietary in nature, and owned by the Government
directly or through its instrumentalities either wholly, or, where applicable as in the case of stock corporations, to
the extent of at least fifty-one (51) percent of its capital stock. The definition mentions three (3) requisites, namely,
first, any agency organized as a stock or non-stock corporation; second, vested with functions relating to public
needs whether governmental or proprietary in nature; and, third, owned by the Government directly or through
its instrumentalities either wholly, or, where applicable as in the case of stock corporations, to the extent of at
least fifty-one (51) percent of its capital stock. Sclaw

In the present case, all three (3) corporations comprising the CIIF companies were organized as stock
corporations. The UCPB-CIIF owns 44.10% of the shares of LEGASPI OIL, 91.24% of the shares of
GRANEXPORT, and 92.85% of the shares of UNITED COCONUT.[15] Obviously, the below 51% shares of stock
in LEGASPI OIL removes this firm from the definition of a government owned or controlled corporation. Our
concern has thus been limited to GRANEXPORT and UNITED COCONUT as we go back to the second requisite.
Unfortunately, it is in this regard that petitioner failed to substantiate his contentions. There is no showing that
GRANEXPORT and/ or UNITED COCONUT was vested with functions relating to public needs whether
governmental or proprietary in nature unlike PETROPHIL in Quimpo. The Court thus concludes that the CIIF
companies are, as found by public respondent, private corporations not within the scope of its jurisdiction. Sclex

With the foregoing conclusion, we find it unnecessary to resolve the other issues raised by petitioner.

A brief note on private respondents' charge of forum shopping. Executive Secretary v. Gordon[16] is instructive
that forum shopping consists of filing multiple suits involving the same parties for the same cause of action, either
simultaneously or successively, for the purpose of obtaining a favorable judgment. It is readily apparent that the
present charge will not prosper because the cause of action herein, i. e., violation of The Anti-Graft and Corrupt
Practices Act, is different from the cause of action in the case pending before the trial court which is collection of
a sum of money plus damages. miso

WHEREFORE, the petition is DISMISSED. The Resolution of public respondent Office of the Ombudsman of 30
January 1998 which dismissed the complaint of petitioner Manuel M. Leyson Jr., as well as its Order of 4 June
1998 denying his motion for reconsideration, is AFFIRMED. Costs against petitioner.

SO ORDERED.apdc

Mendoza, Quisumbing, Buena, and De Leon, Jr., JJ., concur.

G.R. No. 169008 July 31, 2008

LAND BANK OF THE PHILIPPINES, Petitioner,

vs.
RAYMUNDA MARTINEZ, Respondent.

RESOLUTION

NACHURA, J.:

Before the Court are petitioners September 20, 2007 Motion for Reconsideration1 and November 8, 2007
Supplemental Motion for Reconsideration,2 which seek the reversal of the August 14, 2007 Decision3 in the
instant case. To recall, the Court in the challenged decision denied the petition for review on certiorari and
affirmed the ruling of the Court of Appeals (CA) in CA-G.R. SP No. 83276.

Lifted from the said assailed decision are the following antecedent facts and proceedings:

After compulsory acquisition by the Department of Agrarian Reform (DAR), on November 16, 1993, of
respondent Martinezs 62.5369-hectare land in Barangay Agpudlos, San Andres, Romblon, pursuant to Republic
Act No. 6657 or the Comprehensive Agrarian Reform Law of 1988 (CARL), petitioner Land Bank of the
Philippines (LBP) offered P1,955,485.60 as just compensation. Convinced that the proffered amount was unjust
and confiscatory, respondent rejected it. Thus, the Department of Agrarian Reform Adjudication Board (DARAB),
through its Provincial Agrarian Reform Adjudicator (PARAD) conducted summary administrative proceedings for
the preliminary determination of just compensation in accordance with Section 16 (d) of the CARL.

On September 4, 2002, PARAD Virgilio M. Sorita, finding some marked inconsistencies in the figures and factors
made as bases by LBP in its computation, rendered judgment as follows:

WHEREFORE, in view of the foregoing, judgment is hereby rendered:

Ordering the Land Bank of the Philippines to pay landowner-protestant RAYMUNDA MARTINEZ for her property
covered and embraced by TCT No. T-712 with an area of 62.5369 hectares, more or less, which the Department
of Agrarian Reform intends to acquire, the total amount of TWELVE MILLION ONE HUNDRED SEVENTY NINE
THOUSAND FOUR HUNDRED NINETY TWO and 50/100 Pesos (Php12,179,492.50), in the manner provided
for by law.

SO ORDERED.

A petition for the fixing of just compensation docketed as Agrarian Case No. 696 was then filed by LBPs counsel
before the Special Agrarian Court (SAC), the Regional Trial Court of Odiongan, Romblon, Branch 82. After filing
her answer to the said petition, respondent, contending that the orders, rulings and decisions of the DARAB
become final after the lapse of 15 days from their receipt, moved for the dismissal of the petition for being filed
out of time. Petitioner opposed the motion.

Meanwhile, respondent, still asserting the finality of PARAD Soritas decision, filed before the Office of the
PARAD a motion for the issuance of a writ of execution, which was eventually granted on November 11, 2003.
Ascertaining that the petition before the SAC was filed by LBP 26 days after it received a copy of PARAD Soritas
decision, the Office of the PARAD denied LBPs motion for reconsideration and ordered the issuance of a writ of
execution on February 23, 2004. Aggrieved of these developments, LBP, on March 12, 2004, moved to quash
the said February 23, 2004 PARAD resolution.

On April 6, 2004, even as the motion to quash was yet unresolved, LBP instituted a petition for certiorari before
the CA, which was docketed as CA-G.R. SP No. 83276, assailing both the November 11, 2003 and the February
23, 2004 PARAD resolutions. LBP primarily contended that the Office of the PARAD gravely abused its discretion
when it issued the writ of execution despite the pendency with the SAC of a petition for the fixing of just
compensation.

The CA, finding LBP guilty of forum-shopping for not disclosing the pendency of the Motion to Quash dated
March 12, 2004, dismissed the petition on September 28, 2004, thus:

ACCORDINGLY, the present petition for certiorari is DISMISSED outright.

Consequently, in view of the dismissal of the above-entitled case, we are no longer in a position to act on the
private respondents motion for execution pending appeal.

Further, this Court, mindful that under Sec. 5, Rule 7, of the 1997 Rules of Civil Procedure, willful and deliberate
forum-shopping constitutes direct contempt of court and cause for administrative sanctions, which may both be
resolved and imposed in the same case where the forum shopping is found, WARNS the counsel of record of
the petitioner that a repetition of a similar act of submitting a false certification shall be dealt with most severely.

SO ORDERED.

Not persuaded by LBPs motion for reconsideration, the appellate court denied the same on July 15, 2005.
Necessarily, LBP, through its legal department, elevated the case before this Court on September 9, 2005 via a
petition for review on certiorari under Rule 45, contending, among others, that it did not commit deliberate forum
shopping for what it filed with the Office of the PARAD was a motion to quash, which is not an initiatory pleading;
and the decision of the PARAD cannot be executed due to the pending petition for fixing of just compensation
with the SAC.

On September 14, 2005, we issued a temporary restraining order (TRO) restraining the appellate court and the
DAR adjudicators from implementing the November 11, 2003 and the February 23, 2004 resolutions.

For her part, respondent contends that petitioner has committed forum-shopping when it filed a certiorari petition
without first awaiting the resolution by the Office of the PARAD of the motion to quash; and that petitioner has
lost its standing to sue considering that it is being represented by its lawyers and not the Office of the Government
Corporate Counsel (OGCC). [Citations omitted.]4

Three primordial issues were then resolved by the Court in the said decision(1) whether or not petitioner could
file its appeal solely through its legal department; (2) whether or not petitioner committed forum shopping; and
(3) whether or not the Provincial Agrarian Reform Adjudicator (PARAD) gravely abused his discretion when he
issued a writ of execution despite the pendency of LBPs petition for fixing of just compensation with the Special
Agrarian Court (SAC).

The Court went on to rule that the petition for review on certiorari could not be filed without the Office of the
Government Corporate Counsel (OGCC) entering its appearance as the principal legal counsel of the bank or
without the OGCC giving its conformity to the LBP Legal Departments filing of the petition. The Court also found
petitioner to have forum-shopped when it moved to quash the PARAD resolutions and at the same time petitioned
for their annulment via certiorari under Rule 65. Most importantly, the Court ruled that petitioner was not entitled
to the issuance of a writ of certiorari by the appellate court because the Office of the PARAD did not gravely
abuse its discretion when it undertook to execute the September 4, 2002 decision on land valuation. The said
adjudicators decision attained finality after the lapse of the 15-day period stated in Rule XIII, Section 11 of the
Department of Agrarian Reform Adjudication Board (DARAB) Rules of Procedure.

Dissatisfied with our ruling, petitioner successively filed, as aforesaid, the September 20, 2007 Motion for
Reconsideration5 and the November 8, 2007 Supplemental Motion for Reconsideration.6 In both motions,
petitioner contends that its lawyers are authorized to appear in the instant case for they have been issued a letter
of authority by the OGCC on April 17, 2006; that it did not commit deliberate forum shopping; that the Provincial
Agrarian Reform Adjudicator (PARAD) gravely abused his discretion in issuing the writ of execution to implement
his decision; that respondents defense of res judicata or the alleged finality of the PARADs decision was never
pleaded in her answer, hence, was already deemed waived; that the PARAD had no jurisdiction to issue the writ
of execution due to the pending petition for determination of just compensation with the SAC; and that the Courts
August 14, 2007 Decision in this case is contrary to its October 11, 2007 Decision in Land Bank of the Philippines
v. Suntay, G.R. No. 157903 on the issue of whether the petition for determination of just compensation was filed
out of time.

Respondent, in her January 24, 2008 Comment,7 counters, among others, that the filing of the said motions is
only dilatory considering that the arguments raised therein have already been answered by the Court in the
decision sought to be reconsidered.

The Court agrees with respondents contention and denies petitioners motions.

Indeed, except for the alleged conflict of the August 14, 2007 Decision with that promulgated on October 11,
2007 in G.R. No. 157903 [LBP v. Suntay], the grounds raised by petitioner in the motions are identical to those
stated in its previous pleadings. And these have already been considered and sufficiently passed upon by the
Court in the August 14, 2007 Decision.

On the supposedly conflicting pronouncements in the cited decisions, the Court reiterates its ruling in this case
that the agrarian reform adjudicators decision on land valuation attains finality after the lapse of the 15-day
period stated in the DARAB Rules. The petition for the fixing of just compensation should therefore, following the
law and settled jurisprudence, be filed with the SAC within the said period. This conclusion, as already explained
in the assailed decision, is based on the doctrines laid down in Philippine Veterans Bank v. Court of Appeals8 and
Department of Agrarian Reform Adjudication Board v. Lubrica.9

In Philippine Veterans Bank, decided in 2000 through the pen of Justice Vicente V. Mendoza, the Court ruled
that the trial court correctly dismissed the petition for the fixing of just compensation because it was filed beyond
the 15-day period provided in the DARAB Rules.

In Lubrica, decided in 2005 through the pen of Justice Dante O. Tinga, the Court, citing Philippine Veterans
Bank, ruled that the adjudicators decision had already attained finality because LBP filed the petition for just
compensation beyond the 15-day reglementary period. Incidentally, Josefina Lubrica is the assignee of Federico
Suntay whose property is the subject of the aforementioned October 11, 2007 Decision in LBP v.
Suntay.1avvphi1

Following settled doctrine, we ruled in this case that the PARADs decision had already attained finality because
of LBPs failure to file the petition for the fixing of just compensation within the 15-day period.

This ruling, however, as correctly pointed out by petitioner, runs counter to the Courts recent decision in Suntay
[the motions for reconsideration in Suntay were denied with finality in the January 30, 2008 Resolution of the
Court10], in which the Court ruled that the trial court erred in dismissing the petition for determination of just
compensation on the ground that it was filed out of time. The Court in that case stressed that the petition was
not an appeal from the adjudicators final decision but an original action for the determination of just
compensation.

We, however, promulgated our decision in this case ahead of Suntay. To reiterate, this case was decided on
August 14, 2007, while Suntay was decided two months later, or on October 11, 2007. Suntay should have then
remained consistent with our ruling, and with the doctrines enunciated in Philippine Veterans Bank and in
Lubrica, especially considering that Lubrica was the representative of Suntay in the Suntay case.

The Court notes that the Suntay ruling is based on Republic of the Philippines v. Court of Appeals, 11 decided in
1996 also through the pen of Justice Vicente V. Mendoza. In that case, the Court emphasized that the jurisdiction
of the SAC is original and exclusive, not appellate. Republic, however, was decided at a time when Rule XIII,
Section 11 was not yet present in the DARAB Rules. Further, Republic did not discuss whether the petition filed
therein for the fixing of just compensation was filed out of time or not. The Court merely decided the issue of
whether cases involving just compensation should first be appealed to the DARAB before the landowner can
resort to the SAC under Section 57 of R.A. No. 6657.

To resolve the conflict in the rulings of the Court, we now declare herein, for the guidance of the bench and the
bar, that the better rule is that stated in Philippine Veterans Bank, reiterated in Lubrica and in the August 14,
2007 Decision in this case. Thus, while a petition for the fixing of just compensation with the SAC is not an appeal
from the agrarian reform adjudicators decision but an original action, the same has to be filed within the 15-day
period stated in the DARAB Rules; otherwise, the adjudicators decision will attain finality. This rule is not only in
accord with law and settled jurisprudence but also with the principles of justice and equity. Verily, a belated
petition before the SAC, e.g., one filed a month, or a year, or even a decade after the land valuation of the DAR
adjudicator, must not leave the dispossessed landowner in a state of uncertainty as to the true value of his
property.

IN THE LIGHT OF THE FOREGOING DISQUISITIONS, the Court DENIES WITH FINALITY petitioners
September 20, 2007 Motion for Reconsideration and the November 8, 2007 Supplemental Motion for
Reconsideration.

SO ORDERED.
RODOLFO M. CUENCA, G.R. No. 146214
Petitioner,
- versus -

HON. ALBERTO P. ATAS, Present:

JULITO F. FABRERO, and HON.
NATHANIEL A. LOBIGAS, in CARPIO MORALES, J.,
their capacity as Hearing Officers Acting Chairperson,
of the SECURITIES AND TINGA,
EXCHANGE COMMISSION; VELASCO, JR.,
PHILIPPINE NATIONAL NACHURA,* and
CONSTRUCTION CORPORATION, REYES,* JJ.
ASSET PRIVATIZATION TRUST,
PHILIPPINE NATIONAL BANK,
DEVELOPMENT BANK OF
THE PHILIPPINES, NATIONAL
DEVELOPMENT COMPANY,
PHILIPPINE EXPORT AND
FOREIGN LOAN GUARANTEE
CORPORATION, and
GOVERNMENT SERVICE Promulgated:
INSURANCE SYSTEM,
Respondents. October 5, 2007
x-----------------------------------------------------------------------------------------x

DECISION
VELASCO, JR., J.:

The Case

In this Petition for Review on Certiorari[1] of the adverse November 29, 2000 Decision[2] of the Court of
Appeals (CA) in CA-G.R. SP No. 60366, petitioner Rodolfo M. Cuenca, in effect, questions the July 10, 2000
Decision[3] of the Securities and Exchange Commission (SEC) Securities Investigation and Clearing Department
(SICD) in SICD SEC Case No. 05-96-5357 entitled Rodolfo M. Cuenca v. Philippine National Construction
Corporation (PNCC), et al., which declared defendants-government financial institutions (GFIs) as majority
stockholders of the PNCC. The SICD Decision was affirmed by the SEC in SEC Case No. AC 807, which, in
turn, was upheld by the CA in its assailed November 29, 2000 Decision.

The Facts

Petitioner was an incorporator, President, and Chief Executive Officer of the then Construction Development
Corporation of the Philippines (CDCP), now PNCC, from its incorporation in 1966 until 1983. Sometime in 1977,
CDCP was granted a franchise under Presidential Decree No. 1113 to construct, operate, and maintain toll
facilities of the North and South Luzon Expressway. In the course of its operations, it incurred substantial credit
obligations from both private and government sources.

However, its unpaid obligations ballooned so much that by 1983, it became impossible for it to settle its
maturing and overdue accounts with various GFIs, namely, the Philippine National Bank (PNB), Development
Bank of the Philippines (DBP), National Development Company (NDC), Government Service Insurance System
(GSIS), Land Bank of the Philippines (LBP), and Philippine Export and Foreign Loan Guarantee Corporation
(PEFLGC), now known as the Trade and Investment Development Corporation of the Philippines.
On February 23, 1983, then President Ferdinand E. Marcos issued Letter of Instruction No. (LOI)
[4]
1295, directing the creditor GFIs to convert into CDCPs shares of stock the following: (1) all of the direct
obligations of CDCP and those of its wholly-owned subsidiaries, including, but not limited to loans, credits,
accrued interests, fees and advances in any currency outstanding as of December 31, 1982; (2) the direct
obligations of CDCP maturing in 1983; and (3) obligations maturing in 1983 which were guaranteed by the GFIs.

On April 25, 1983, a special stockholders meeting, presided by petitioner, was held whereby stockholders
representing more than two-thirds (2/3) of the outstanding capital stock of CDCP approved the increase of its
authorized capital stock from PhP 1.6 to 2.7 billion in accordance with LOI 1295. Thus, the CDCP, pursuant to
said letter, converted some of its obligations to GFIs into equity.

Consequently, CDCP issued common shares to DBP, NDC, GSIS, LBP, PEFLGC, and preferred D
shares to PNB in consideration for the extinguishment of some of CDCPs outstanding loan obligations to said
GFIs, all of which were duly recorded in its corporate books. Subsequently, in December 1983, the SEC
approved the increase of CDCPs authorized capital stock, and the corresponding CDCP Certificates of Stock
were issued in the names of DBP, GSIS, LBP, PEFLGC, and PNB, to wit:

Certificates of stock issued Name No. of shares issued to GFIs

Cert. of Stock No. 40269[5] DBP 26,987,477 common shares
Cert. of Stock No. 40270[6] PEFLGC 37,584,577 common shares
Cert. of Stock No. 40271[7] GSIS 47,490,000 common shares
Cert. of Stock No. 40272 LBP 657,836 common shares
Cert. of Stock No. N[8] PNB 25,500,000 Preferred Class D

The total subscription of the above issuance of shares of stock pursuant to LOI 1295 amounted to PhP
1,405,202,000 or 1.4 billion.

Thus, with the implementation of LOI 1295, respondents-GFIs became the majority stockholders of
CDCP to the extent of 70% of the authorized capital stocks. The change in the corporations ownership was made
public through various announcements.[9] CDCP was later renamed to PNCC to reflect the Philippine
Government stockholding, and became a government-acquired asset corporation. Consequently, the various
GFIs were given seats in the Board of Directors of PNCC and participated in the management of the company.

On August 19, 1987, PNCC issued Certificate of Stock No. 43032 in the name of NDC for 14,699,000
shares of common stock.
 Meanwhile, sometime in 1988, pursuant to Administrative Order Nos. 14 and 64, DBP, PNB, PEFLGC,
and NDC transferred their interests in PNCC to the Republic of the Philippines which in turn conveyed them to
the Asset Privatization Trust (APT), now the Privatization and Management Office, for disposition to the private
sector pursuant to the governments privatization program.

On May 31, 1996, more than a decade after LOI 1295 was implemented, petitioner filed a complaint
before the SEC SICD docketed as SEC Case No. 05-96-5357 entitled Rodolfo M. Cuenca v. PNCC, et al., for
the SEC to determine and declare whether the GFIs were registered stockholders of PNCC and the number of
shares held by each of them and to compel PNCC to call and hold regular stockholders meetings and election
of directors every year.

Petitioner averred that while PNCC issued the above specified certificates of stock to the GFIs pursuant
to LOI 1295, the GFIs however refused to cancel and never did cancel the loans in their books as payment for
the shares issued in their names by PNCC as they considered it to be a diminution of the value of their
investments. Thus, petitioner claimed that some of the GFIs refused to accept delivery of the stock certificates
from PNCC while others were not even aware of the issuance of the certificates of stock in their
names. Consequently, respondents-GFIs continued to charge and receive payments for their loan and interest
charges from PNCC though these loans were supposed to have been converted into common stock in 1983
pursuant to LOI 1295.

In March 1998, with the idea of spinning-off its toll-way operations, PNCC scheduled a special
stockholders meeting on April 14, 1998. On March 31, 1998, petitioner filed before the SEC SICD an Urgent
Application for Temporary Restraining Order (TRO) and Writ of Preliminary Injunction seeking to enjoin PNCC
from allowing the GFIs to vote their shares of stock in PNCC, either issued or subscribed, pursuant to LOI 1295,
and from exercising any right arising from the shares.

On April 14, 1998, the date of the special stockholders meeting of PNCC, the SEC SICD, through its
hearing officer, granted petitioners urgent application and issued a TRO enjoining the GFIs from voting their
shares of stock in PNCC.[10] Thereafter, the parties presented their respective preliminary evidence during the
hearings for the issuance of a preliminary injunction.

Meanwhile, despite the pendency of SICD SEC Case No. 05-96-5357, petitioner filed a Third Amended
Complaint[11] before the Makati City Regional Trial Court (RTC), Branch 142, docketed as Civil Case No. 95-
1356 and entitled Rodolfo M. Cuenca, for and in behalf of PNCC v. APT, et al. for (1) enforcement and strict
compliance with LOI 1295; (2) cancellation of all penalties, interest, and surcharges accrued after December 31,
1982; (3) enjoinment of the GFIs from receiving any real or personal properties from PNCC; and (4) cancellation
of the transfer of Lot 3, Block 1, RL-04-000001 covered by Transfer Certificate of Title (TCT) No. 34996 to APT.

On September 8, 1998, the SEC SICD issued an Order[12] granting the preliminary injunction. PNCCs
Motion for Reconsideration was then denied in the December 21, 1998 SEC SICD Omnibus Order.[13] Thus,
on January 8, 1999, PNCC filed a Petition for Certiorari[14] before the SEC en banc to review and set aside
the September 8, 1998 and December 21, 1998 SEC SICD Orders, docketed as SEC-EB Case No.
640. On March 14, 2000, the SEC en banc issued an order dismissing PNCCs petition. Consequently, PNCC
brought before the CA the SEC en banc March 14, 2000 Order through a Petition for Review,[15] docketed as
CA-G.R. SP No. 58117.

In the meantime, on May 20, 1999, petitioner filed a Motion to Admit Amended Complaint in SEC SICD
Case No. 05-96-5357, which was granted despite oppositions from PNCC and the GFIs. Respondents PNCC
and GFIs then filed their respective answers to the amended complaint.

On March 23, 2000, PNCC filed a Motion to Designate Hearing Panel[16] on the ground that the instant
case would be better heard and resolved by a hearing panel of three than by a sole hearing officer, considering
the interests the Philippine Government holds in PNCC through the GFIs. This was opposed by
petitioner. Nonetheless, while not finding any valid reason for said motion, respondent SEC SICD Hearing Officer
Alberto P. Atas granted PNCCs motion through the April 6, 2000 Order[17] to allay respondent PNCCs fear that
it may not be able to obtain a sense of fairness and justness in the determination of the merits of its claims. No
Motion for Reconsideration of the April 6, 2000 Order was filed by petitioner.

Consequently, SEC SICD Director Daisy Besa-De Asis designated respondents Hearing Officers Alberto
P. Atas, Julito F. Fabrero, and Nathaniel A. Lobigas as the three (3)-person Hearing Panel.

During the hearings of the instant case, through a May 4, 2000 Order, the Hearing Panel admitted almost
all of petitioners exhibits. On May 8, 2000, PNCC filed an Amended Answer[18] raising a new matter of the April
14, 2000 Deed of Confirmation and June 7, 2000 Supplement to Deed of Confirmation. On June 1, 2000, the
Hearing Panel admitted PNCCs Amended Answer through an Order.[19]

On June 2, 2000, the Hearing Panel scheduled a new preliminary conference on June 13, 2000. At the
hearing on June 5, 2000, due to conflicts with the schedules of some of the parties counsels, the preliminary
conference was moved to June 29, 2000. However, on June 6, 2000, PNCC filed an Urgent Motion[20] praying
that the preliminary conference be reset back to the original schedule of June 13, 2000 so as to follow the proviso
in the SEC Rules of Procedure. PNCCs Urgent Motion was granted through a June 8, 2000 Order,[21] and the
preliminary conference was reset back to June 13, 2000.

In the preliminary conference on June 13, 2000, petitioner adopted his previous preliminary conference
brief dated November 15, 1999. PNCC and APT filed their preliminary conference briefs dated June 8,
2000 and June 13, 2000, respectively; while DBP, GSIS, PNB, and PEFLGC adopted their respective preliminary
conference briefs previously filed. On the same date, petitioner was barred from presenting additional evidence
due to his failure to file a reply to PNCCs Amended Answer and to file an amended preliminary conference brief
together with the affidavits of witnesses as required by the new SEC Rules.
 On June 13 and 14, 2000, PNCC adopted the testimonial and documentary evidence it presented during
the hearing on the preliminary injunction as part of its evidence-in-chief and adduced further additional witnesses
and documentary evidence to substantiate the new matter presented in its amended answer. The GFIs adopted
PNCCs evidence which was orally offered by PNCC over petitioners objection.

The Hearing Panel scheduled the reception of petitioners rebuttal evidence on June 19 and 20,
2000. However, on June 19, 2000, instead of presenting rebuttal evidence, petitioner filed a Motion to Admit
Second Amended Complaint, but an opposition was filed to it by respondents for being dilatory.

On June 21, 2000, PNCC filed a Motion to Terminate Plaintiffs Rebuttal Evidence and to Submit the Case
for Decision on the Merits[22] which was opposed[23] by petitioner. On July 3, 2000, the Hearing Panel issued an
Omnibus Order[24] denying petitioners motion to admit second amended complaint, granted PNCCs motion to
terminate petitioners rebuttal evidence, and submitted the case for resolution on the merits. Thus, the instant
case was submitted for decision on the merits based on the pleadings, evidence, and other submissions of the
parties.

The Ruling of the SEC SICD

On July 10, 2000, the Hearing Panel rendered its Decision dismissing petitioners complaint for lack of
merit and revoking the writ of preliminary injunction issued on September 8, 1998. The fallo reads:

WHEREFORE, plaintiffs Complaint is hereby dismissed for lack of merit and the Orders
dated April 14, 1998 and September 8, 1998 are hereby revoked and set aside.[25]

The Hearing Panel found that the evidence presented by PNCC and GFIs constituted substantial proof
of the implementation of LOI 1295. It reasoned that not only did PNCC issue the shares of stock as shown in its
stock ledger cards but such fact was corroborated by Caval Securities Registry, Inc., PNCCs stock transfer
agent, which prepared PNCCs September 15, 1987 Schedule of Subscription.[26] Moreover, prior to the filing of
the instant case, the GFIs have been nominating their representatives to PNCCs Board of Directors which is an
attribute of ownership of shares of stock in PNCC.

The Hearing Panel also took cognizance of the April 14, 2000 Deed of Confirmation[27] and the June 7,
2000 Supplement to Deed of Confirmation[28] executed by the GFIs, which erased all doubts on the
implementation of LOI 1295 by the conversion of the GFIs loan receivables from PNCC into the latters
equity. Thus, with the clear consideration of loan receivables for the shares of stock, the shares issued to the
GFIs cannot in any way be considered watered stocks. It cited Section 62 of the Corporation Code which
expressly allows the issuance of shares of stock in consideration for previously incurred indebtedness.
 Moreover, the Notes to the Financial Statements[29] on the Report on Examinations of Financial
Statements[30] for comparative periods of December 31, 1982 and December 31, 1983 prepared by independent
auditors from Carlos J. Valdes & Co., Certified Public Accountants, clearly show the reduction of PNCC loan
obligations.Specifically, Note No. 11[31] stated that as of December 31, 1983, total obligations already converted
into equity amounted to PhP 1,382,202 or roughly 1.4 billion representing the increase of authorized capital stock
of PNCC.

On the other hand, the Hearing Panel found the pieces of evidence presented by petitioner, most of which
were the same ones presented by respondents, to be inconsequential and insufficient to overthrow the weight
of the evidence presented by respondents that a conversion of PNCCs debt into equity was implemented. It
ratiocinated that the badges of fraud pointed out by petitioner are inconsequential as no clear and convincing
evidence was presented by petitioner, and that allegations cannot take the place of proof. Likewise, the lack of
a subscription agreement was not fatal to the shares of stock issued to the GFIs as LOI 1295 in no uncertain
terms mandated such conversion of debt-to-equity which was duly approved by the stockholders of PNCC in
increasing its authorized capital stock precisely pursuant to LOI 1295.

Anent the August 15, 1995 Memorandum of Agreement[32] executed by the Department of Finance (DOF),
APT, and PNCC, whereby PNCC assigned to APT and the DOF Lot 3, Block 1, RL-04-000001 covered by TCT
No. 34996, such did not by far prove that PNCC paid its obligations to PNB and DBP, which transferred their
assets to the National Government, and the shares PNCC issued to these GFIs were without
consideration. Evidence shows that PNCC owed PNB PhP 1.79 billion and DBP PhP 629 million, but what were
converted into equity were only PhP 255 million for PNB and PhP 269.874 million for DBP, thus leaving
outstanding balances of PhP 1.535 billion for PNB and PhP 359 million for DBP. These outstanding and
unconverted loan credits were the subject of the assignment of receivables to APT.

In fine, the Hearing Panel cited the resolution of the 1992 case of Childrens Garden of the Philippines v.
[33]
APT, where this Court ruled that the implementation of LOI 1295 was already a fait accompli; thus, there was
clear recognition by the Court of the factual conversion of GFIs loan credits to PNCC shares.

As regards NDC, the Hearing Panel dismissed the complaint against it for failure of petitioner to state a
cause of action as the issuance of 14,699,000 shares of common stock of PNCC in favor of NDC in 1987 was
pursuant to LOI 1136 and not LOI 1295, and the shares were issued for valuable consideration.

The Ruling of the SEC En Banc

With the adverse ruling against him, petitioner timely filed his Notice of Appeal[34] and Petition for Review
on Certiorari and/or Memorandum on Appeal.[35] Aside from assailing the July 10, 2000 SEC SICD Decision,
petitioner also assailed the July 3, 2000 Omnibus Order terminating the presentation of his rebuttal evidence
and submitting the case for decision on the merits, and the June 27, 2000 Preliminary Conference
Order[36] barring him from presenting additional witnesses as part of his evidence-in-chief.Petitioner raised before
the SEC en banc the allegations that the Hearing Panel conspired with PNCC in railroading the trial and issuing
the questioned Orders and Decision.

Among other things, petitioner assails the speed, taking only seven (7) days from the date the case was
submitted for decision, with which the Hearing Panel came out with a grammar-perfect decision. It concluded
that it was PNCC which prepared the decision, pointing out numerous instances where the text of the assailed
decision is identical to or very similar to some portions of PNCCs petitions in another case.

Subsequently, the SEC en banc issued its August 8, 2000 Order denying petitioners appeal and
affirming in toto the July 10, 2000 Decision of the SEC SICD. The decretal portion states:

FINDING NO REVERSIBLE ERROR, therefore, the herein Appeal should be, as it is hereby
DISMISSED.

The 10th July 2000 Decision in SICD Case No. 05-96-5357 is herewith AFFIRMED in toto.

Costs adjudged against the appellant.[37]

The SEC en banc found that petitioner banked on sweeping speculations and assumptions except the
significant and substantial proof to corroborate the serious charges leveled against the Hearing Panel. It
reasoned that petitioner had not shown malice, bad faith, or corrupt purpose on the part of the Hearing Panel to
warrant the reversal of the assailed Decision.
Moreover, it pointed out that petitioner failed to procedurally appreciate the import of the mandatory
requirements set forth in the SEC Rules of Procedure in effect at that time, as the Hearing Panel merely adhered
to Rule V, Sec. 4 of said Rules of Procedure, which provides that hearings shall be commenced not later than
15 days from the date of the termination of the preliminary conference and completed within 20 days from the
date of the first hearing. Besides, according to the SEC en banc, the proceedings in the SEC SICD were
summary in nature; thus, speed seemed to ensue when the case was heard and decided.

On the issue of violation or infringement of petitioners right to due process, the SEC en banc found no
basis for it, as the summary nature of the proceedings below has to be followed by the Hearing Panel. Moreover,
the SEC en banc found a dearth of evidence to lend support to petitioners contention.

Finally, the SEC en banc likewise relied on the GFIs ratification of their subscription to the shares issued
by PNCC pursuant to LOI 1295 to erase any doubt about its implementation and the extinguishment of PNCCs
unpaid loan credits to the extent of such issuance of shares of stock.

The Ruling of the Court of Appeals

Aggrieved, on August 24, 2000, petitioner raised through a Petition for Review[38] before the CA
the August 8, 2000 SEC en banc Order dismissing his appeal, docketed as CA-G.R. SP No. 60366. Petitioner
likewise assailed in its CA petition the SEC SICD June 27, 2000 Preliminary Conference Order, July 3, 2000
Omnibus Order, and July 10, 2000 Decision.

Thereafter, through its assailed November 29, 2000 Decision,[39] the CA denied and dismissed the petition
for review for lack of merit; thus, it upheld the SEC en banc order affirming the SEC SICD decision which
dismissed petitioners complaint. The CA found that neither the SEC en banc nor the SEC Hearing Panel
committed grave abuse of discretion amounting to lack or excess of jurisdiction in rendering their respective
orders and decision.

The appellate court failed to see any rhyme or reason in finding fault in or to disturb the findings of the
SEC en banc on its ruling regarding the alleged suspicious and compelling badges of fraud pointing to a
conspiracy between the Hearing Panel and PNCC. It quoted with approbation the quasi-judicial agencys
disquisition on this matter.Moreover, it reasoned that there was nothing startling or irregular in the fact that the
text of the same decision was similar in language with the text of the pleadings filed by PNCC as the Hearing
Panel is allowed by the Rules to adopt any part of the position papers or draft decisions the parties had filed in
their resolution or decision. As regards the constitution of the three-person Hearing Panel, the CA held that by
not filing a motion for reconsideration of the order granting the constitution of the panel, petitioner could not now
evoke suspicion on it.

The CA further upheld the summary proceedings before the Hearing Panel for being in accord with the
SECs New Rules of Procedure, and, thus, such could not be prejudicial to petitioner. As regards the admission
of PNCCs amended answer, the CA held that such could not be considered as a conspiratorial act as petitioner
did not oppose such admission.

On the issue of the preliminary conference brief being merely permissive, the CA noted that during the
June 5, 2000 hearing, it was specifically ordered by the Hearing Panel for the parties to file their respective briefs
with attached affidavits of their witnesses before the actual preliminary conference. Thus, petitioner could have
prepared and filed his brief before the June 13, 2000 preliminary conference. However, petitioner chose to remain
silent and simply adopted his previous preliminary conference brief.Petitioner never made known to the Hearing
Panel his assertion that the filing of his brief was merely permissive. Besides, it was the Hearing Panel who had
the say on whether preliminary conference briefs should be filed or not.

On the issue of the limitation on the presentation of petitioners rebuttal evidence, the CA likewise found
it untenable as he could have filed a reply to traverse the new one-paragraph allegation in the amended answer
or, in the alternative, referred to supporting documents and affidavits negating such new matter in his preliminary
conference brief.Petitioner did neither. The CA then opined that [petitioner] could not now cry foul over his lapses
as due process is not violated where a person is given the opportunity to be heard but chooses not to give his
side.
 Likewise, the CA reasoned that petitioner could not assail the findings of facts and conclusions of law by
the Hearing Panel as such are based on the aggregate evidence presented by the parties. It pointed out that the
evidence presented during the hearings for the issuance of a preliminary injunction was preliminary or only a
sample to support the issuance of the injunctive writ. Verily, the CA ruled that the findings of the Hearing Officer
in the issuance of the TRO and injunctive writ could not pre-empt the conclusive findings of the tribunal after due
trial and presentation of all the evidence adduced by the parties. Thus, the CA was convinced that petitioner was
indeed accorded due process and given ample opportunity to ventilate his case.

In fine, the appellate court likewise held the applicability of Childrens Garden of the Philippines[40] and the
fact that the assailed issuance of shares of stock to the GFIs was for valuable consideration, that is, the existing
loan credit obligations. The CA then ruled that petitioner was guilty of forum shopping for having raised
substantially the same issues before the SEC and RTC.

Hence, the instant petition is now before the Court.

Parenthetically, on June 19, 2000, petitioner filed a Notice of Dismissal and Motion to Dismiss Third
Amended Complaint[41] in Civil Case No. 95-1356 before the Makati City RTC, Branch 142. Petitioner reasoned
that based on the position taken and the admissions made by PNCC and the GFIs in other cases, with respect
to the validity of LOI 1295, he was no longer certain if it was proper for him to maintain suit for the enforcement
and implementation of said law. The trial court promptly dismissed Civil Case No. 95-1356 through its June 23,
2000 Order.[42]

Similarly, sometime in September 2000, PNCC filed a motion to dismiss CA-G.R. SP No. 58117
before the CA Ninth Division, as said case had been rendered moot and academic by the July 10, 2000 Decision
of the SEC SICD Hearing Panel, which lifted and revoked the preliminary injunction granted through the assailed
SEC SICD September 8, 1998 Order. Consequently, CA-G.R. SP No. 58117 was dismissed through the
September 19, 2000 CA Resolution.[43]

The Issues

Petitioner raises the following grounds for our consideration:

THE COURT OF APPEALS HAS COMMITTED REVERSIBLE ERROR IN NOT FINDING THAT
THE SEC EN BANC GROSSLY ERRED IN NOT HOLDING THAT THE PROCEEDINGS BELOW
WERE PROCEDURALLY FLAWED BECAUSE THE HEARING PANEL HAD RAILROADED THE
TRIAL IN FAVOR OF RESPONDENT PNCC.
 A. The Court of Appeals has committed reversible error in not finding that the SEC en banc grossly
erred in not holding that the Hearing Panel, in issuing the Omnibus Order dated 3 July
2000terminating the presentation of petitioners rebuttal evidence and submitting the case for
decision on the merits, committed reversible error and grave abuse of discretion.

i. Respondent PNCCs Motion to Terminate Plaintiffs Rebuttal Evidence was a mere scrap of
paper and should not have been given due course by the Hearing Panel.
ii. The premature termination of petitioners rebuttal evidence was a denial of his right to due
process.
iii. The cancellation of the 19 and 20 June 2000 trial sessions where petitioner was scheduled
to present rebuttal evidence, [sic] was due to the lack of quorum in the Hearing Panel,
which was not the fault of petitioner and for which he should not have been penalized.
iv. The Hearing Panel grossly erred in finding that petitioner could not have presented new or
significant evidence on rebuttal, and that petitioner had already presented sufficient
rebuttal evidence, considering that said findings contradict each other and are
presumptuous and bereft of any factual basis.

B. The Court of Appeals has committed reversible error in not finding that the SEC en banc grossly
erred in not holding that the Hearing Panel, in issuing the Preliminary Conference Order
dated 27 June 2000 (released on 3 July 2000) barring petitioner from presenting additional
witnesses as part of his evidence-in-chief, committed reversible error and grave abuse of
discretion.

II

THE COURT OF APPEALS HAS COMMITTED REVERSIBLE ERROR IN UPHOLDING THE

SEC EN BANC ORDER DATED 8 AUGUST 2000 AFFIRMING THE HEARING PANELS
DECISION DATED 10 JULY 2000.

A. Badges of fraud abound in the pages of the Decision dated 10 July 2000, indubitably showing
the Hearing Panels utter disregard of due process.
B. The SEC en bancs and the Hearing Panels findings of fact are inexplicably the opposite of the
findings of fact previously made by Hearing Officer Gallegos and the SEC en banc, even
though both sets of findings of fact are based on the very same evidence.
C. The Court of Appeals has committed reversible error in finding that petitioner is guilty of forum
shopping.
D. The Court of Appeals has committed reversible error in not ruling that the SEC en banc
grossly erred in not holding that the Hearing Panel committed reversible error and grave abuse
of discretion in considering evidence not formally offered and admitted.
E. The Court of Appeals has committed reversible error in not ruling that the SEC en banc
grossly erred in not holding that the Hearing Panel committed reversible error and grave abuse
of discretion in making findings of fact not supported by the evidence on record and in
disregarding overwhelming evidence.[44]

Petitioner challenges the CA decision on the ground that he was denied due process. He also claims that
the CA erred in ruling that the factual findings of the SEC SICD Hearing Panel, as affirmed by the SEC en banc,
were conclusive on it. Finally, he faults the CA for its failure to appreciate circumstances that would not only
show denial of due process but of fraud and conspiracy in railroading the instant case against him.

The Courts Ruling

The petition is bereft of merit.

Procedural Due Process

Procedural due process, in gist, is the necessity for notice and an opportunity to be heard before judgment
is rendered. Its essence is encapsulated in the immortal cry of Themistocles to Alcibiades: Strikebut hear me
first.[45] Thus, as long as a party is given the opportunity to defend his/her interests in due course, the party would
have no reason to complain, for it is this opportunity to be heard that makes up the essence of due process. [46]

In administrative and quasi-judicial proceedings where the magistrates or tribunals hearing the case are
not bound by the niceties and finer points of judicial due process, the cardinal primary requirements of procedural
due process, as gleaned by Justice Laurel from an array of American decisions, were enumerated in Tibay v.
Court of Industrial Relations, as follows:

(1) The first of these rights is the right to a hearing, which includes the right of the party
interested or affected to present his own case and submit evidence in support thereof. x x
x

(2) Not only must the party be given an opportunity to present his case and to adduce
evidence tending to establish the rights which he asserts but the tribunal must consider the
evidence presented. x x x

(3) While the duty to deliberate does not impose the obligation to decide right, it does imply
a necessity which cannot be disregarded, namely, that of having something to support its
decision. x x x

(4) Not only must there be some evidence to support a finding or conclusion (City of Manila
vs. Agustin, G. R. No. 45844, promulgated November 29, 1937, XXXVI O.G. 1335), but
the evidence must be substantial. x x x

(5) The decision must be rendered on the evidence presented at the hearing, or at least
contained in the record and disclosed to the parties affected. x x x

(6) The [c]ourt x x x or any of its judges, therefore, must act on its or his own independent
consideration of the law and facts of the controversy, and not simply accept the views of
a subordinate in arriving at a decision. x x x

(7) [The court] should, in all controversial questions, render its decision in such a manner
that the parties to the proceeding can know the various issues involved, and the reasons
for the decisions rendered. The performance of this duty is inseparable from the authority
conferred upon it.[47] (Emphasis supplied.)

Prescinding from the above requirements, it is thus clear that the proceedings before the SEC SICD
Hearing Panel are bound by these requirements. To determine whether petitioner was denied due process as
alleged, we will scrutinize the proceedings below.

Proceedings before the Hearing Panel

 For clarity, we reiterate the significant and relevant events that transpired which are mainly being assailed
by petitioner.

It is undisputed that the instant case was pending for over four (4) years before the SEC SICD, that is,
from May 31, 1996 until the rendition of the SEC SICD Decision on July 10, 2000. In the intervening time,
petitioner was granted a 20-day TRO on April 13, 1998 and a writ of preliminary injunction was likewise issued
in his favor on September 8, 1998.

Meanwhile, on May 20, 1999, petitioner filed a motion to admit amended complaint which was granted
by the Hearing Officer. Consequently, PNCC and the GFIs filed their respective answers to the amended
complaint. On May 8, 2000, PNCC in turn filed a motion for leave to admit amended answer, which was not
opposed by petitioner, and duly granted by the Hearing Panel on June 1, 2000.

Likewise, PNCCs March 21, 2000 motion to designate hearing panel, while opposed by petitioner, was
granted on April 6, 2000 and the Hearing Panel was constituted; however, petitioner did not assail this grant as
he failed to file a Motion for Reconsideration of the April 6, 2000 Order.

Consequently, a new preliminary conference was scheduled for June 13, 2000 but was moved to June
29, 2000 due to conflict of schedules of the counsels, but was reset to the original date of June 13, 2000 upon
PNCCs urgent motion to conform with the then SEC New Rules of Procedure.

During the preliminary conference of June 13, 2000, petitioner was barred from presenting additional
evidence. The preliminary conference order was subsequently issued on June 27, 2000. Petitioners presentation
of rebuttal witnesses was terminated through the July 3, 2000 Omnibus Order which also denied admission of
petitioners second amended complaint and submitted the case for decision on the merits.

On July 10, 2000, the Hearing Panel rendered its Decision dismissing petitioners case for lack of merit.

Were the foregoing proceedings procedurally flawed as alleged by petitioner? Were the proceedings of
the instant case before the SEC SICD Hearing Panel railroaded?Was there a conspiracy between the Hearing
Panel and respondent PNCC and the GFIs? Was petitioners right to due process violated? A review of the then
SEC New Rules of Procedure will shed light on the issue of due process.

SEC Rules prescribe a summary procedure

A cursory reading of the then prevailing SEC New Rules of Procedure shows that the proceedings before
the Hearing Officers or Hearing Panel are summary in nature and to be conducted expeditiously in the interest
of just, speedy and inexpensive determination of disputes and claims.[48]

Notably, said rules provided:

RULE I

SEC. 4. Nature of Proceedings.Subject to the requirements of due process, proceedings

before the Commission shall be summary in nature not necessarily adhering to or following
the technical rules of evidence obtaining in the regular courts. Provided, however, that the Rules
of Court may apply in a suppletory manner whenever practicable.

xxxx

RULE V
PROCEEDINGS BEFORE THE
DESIGNATED HEARING OFFICER

SECTION 1. Preliminary Conference.In any action, the Hearing Officer shall set the case for
preliminary conference within ten (10) days after the last pleading is filed, and the parties
and their attorneys shall be directed to appear before the Hearing Officer on the dates set on the
notice, to consider based on the affidavits, documents and other evidence submitted by the
parties:

a. The possibility of an amicable settlement;

b. The simplification of the issues;
c. Schedule hearing which must be undertaken continuously as scheduled until completed
and terminated; and
d. Such other matters as may aid in the just and speedy disposition of the case.

The Hearing Officer shall terminate the preliminary conference ten (10) days after its
commencement, whether or not the parties have agreed to settle their differences.

xxxx

SEC. 4. Preliminary Conference Order.After the preliminary conference, the Hearing Officer
shall issue an Order reciting the action taken at the conference; the stipulations made by the
parties as to any of the matters considered; a recital of such other evidence as the parties may
have agreed upon; the witnesses, if any, to be presented by all the parties; and the scheduled
dates of hearing for presentation of all such witnesses. Provided, however, that the hearings
shall be commenced not later than fifteen (15) days from the date of the termination of the
preliminary conference and completed within twenty (20) days from the date of the first
hearing. Provided, further, that the failure of a party to present a witness or witnesses on a
scheduled hearing date shall be deemed a waiver of such hearing date. Provided, finally, that a
party may present such witness or witnesses within the remaining hearing dates.

SEC. 5. Submission of Position Papers and Draft Decisions. Within fifteen (15) days after the
submission of case for resolution, the parties shall submit their position papers setting forth the
law and the facts relied upon by them. They shall also be required to submit a draft of the decision
or resolution they seek, stating clearly and distinctly the facts and the law upon which it is
based. The Hearing Officer may adopt, in whole or in part, either of the parties draft decision
or resolution, or reject both.

RULE VI
DECISION

SECTION 1. Decision.The Hearing Officer shall render a decision within twenty (20)
days from submission of the case for resolution. (Emphasis supplied.)
No denial of due process

From the foregoing provisions, it becomes clear that petitioner was indeed accorded due process. The
requirements spelled out in Ang Tibay have been complied with.Verily, a close examination of the proceedings
in the SEC SICD in the backdrop of the above rules shows that petitioners right to due process was not
violated. He was indeed accorded ample opportunity to ventilate his position.

First, there is no cause shown for arbitrariness or ill-motive in the constitution of the Hearing Panel. While
petitioner opposed PNCCs motion for its constitution, the April 6, 2000 Order granting it was not questioned nor
assailed by petitioner in a motion for reconsideration. Verily, the rules allow the constitution of a hearing panel,
as Sec. 2 of Rule I, SEC New Rules of Procedure on Definitions provides that a Hearing Officer is any
Commissioner, officer, body or panel duly designated or created by the Commission to hear and decide a
particular case (emphasis supplied).

Thus, by failing to question the Hearing Panels constitution, and by participating in the proceedings before
the panel, petitioner had indeed acquiesced to and waived any question on its constitution.

Second, the resetting of the preliminary conference back to the original schedule of June 13, 2000 is well
within the authority of the Hearing Panel and pursuant to Rule V, Sec. 1 of the SEC Rules which provides that
the preliminary conference be set within 10 days after the last pleading was filed.

Indeed, the last pleading filed was the amended answer to which petitioner opted not to file a reply despite
the opportunity to do so. More so, when the amended answer only raised a new one-paragraph matter on the
deed of confirmation and its supplement executed by the GFIs. In this setting, we find nothing out of line.

Third, petitioner contends that the SEC Hearing Panel required the submission of preliminary conference
briefs for the June 13, 2000 preliminary conference when, under the SECs Rules of Procedure, the filing of such
briefs was not mandatory. In this regard, we do not fault but rather commend the SEC Hearing Panel for taking
the necessary steps to ensure that the proceedings are conducted in an orderly fashion. The SEC Hearing Panel,
in directing the submission of briefs, was simply mindful of the importance of pre-trial as means of facilitating the
disposal of cases by simplifying or limiting the issues and avoiding unnecessary proof of facts at the trial, or
exploring the possibility of an amicable settlement or of submission to arbitration, and generally to do whatever
may reasonably be necessary to facilitate and shorten the formal trial.[49] Recently, we issued Resolution No. 03-
1-09-SC on the Guidelines on Pre-trial and on the Use of the Different Modes of Discovery and Deposition,
stressing that pre-trial, if used properly, is a very effective case management tool to obliterate case delay and
expedite case processing and adjudication.

In any event, no prejudice could have been suffered by petitioner arising from his inability to file brief for
the June 13, 2000 preliminary conference as he had already finished presentation of his evidence. The
conference was conducted only with respect to additional matters raised in PNCCs Amended Answer which did
not however alter its theory. Moreover, petitioner cannot now say that he failed to file his preliminary conference
brief due to short notice as he only received the order granting the resetting on June 9, 2000, a Friday. It is
undisputed that the parties were granted enough time through the June 2, 2000 Order setting the original
schedule on June 13, 2000 and for the parties to file their respective briefs. Indeed, petitioner had sufficient time
to prepare and file his brief.

Fourth, on the issue of not being accorded the opportunity to file an opposition to PNCCs urgent motion
to reset the preliminary conference back to June 13, 2000, suffice it to say that the urgent motion was non-
litigious, then it may be granted ex-parte as the matter raised pertains only to the schedule of the preliminary
conference in accordance with the rules. Otherwise, the opposition will further delay the preliminary conference
proceeding which the rules precisely obviate.

Fifth, the ruling of the Hearing Panel during the June 13, 2000 preliminary conference barring petitioner
from presenting additional witnesses is within its authority and competence. Indeed, the reasons given for such
curtailment were that petitioner failed to file his reply to address the sole new matter raised in the amended
answer, to file an amended preliminary conference brief required by the panel, and to submit the affidavits of his
witnesses required to be appended to his brief.

While the SEC New Rules of Procedure allows the testimony of adverse witnesses sans their affidavits,
the records do not show that petitioner informed the Hearing Panel of the names of his additional witnesses, the
description of their testimony, and the documentary evidence they would identify except the general description
that they are adverse witnesses. Indeed, petitioner did not dispute these except to cry foul that the curtailment
of presenting additional witnesses and evidence violated his right to due process. Given the fact that petitioner
was hedging and was, so to say, fishing for evidence, it is but proper that he was barred from further presenting
additional witnesses in order not to needlessly prolong the proceedings.

Sixth, in the same vein, the ruling of the Hearing Panel to terminate petitioners presentation of rebuttal
evidence in the July 3, 2000 Omnibus Order is likewise well-taken.Indeed, the Hearing Panel granted petitioners
oral motion for presentation of rebuttal evidence but limited it to the testimony of petitioner himself and Mr. Froilan
V. Bacugan.However, on the scheduled date for their testimony, petitioner presented other witnesses and again
went on a fishing expedition. Given that no persuasive additional evidence was forthcoming, the termination of
rebuttal evidence is proper. Besides, as correctly ruled by the Hearing Panel, additional evidence of the same
class may be dispensed with if such would not add anything substantial or material to what has already been
presented.

Petitioner however argues that by the termination of his rebuttal evidence, he was deprived of the right
to prove that (1) the signatories to the Deed of Confirmation and Supplement were not authorized by their
respective Boards of Directors; (2) the GFIs have not actually cancelled PNCCs loan in their books; and (3) the
GFIs have likewise not cancelled the interest, penalties, adjustments for peso devaluation, and other surcharges
that accrued PNCCs loan from 1982 to 2000.[50]

The records reveal that petitioner could very well have introduced evidence on the alleged non-
cancellation of the loans and other charges in the books of the GFIs during the presentation of his evidence-in-
chief. Having failed to do so, petitioner can no longer belatedly interject such evidence into the record through
the right to introduce rebuttal evidence. Such evidence, if any, can be considered as forgotten evidence which
is evidence already existing at the time of the trial but was not presented at that stage of the proceedings.

Anent the authority of the signatories to the Deed of Confirmation and Supplement, petitioner could also
have confronted PNCCs witnesses, especially Atty. Raul Villanueva who was presented to prove this fact, when
they testified before the SEC Hearing Panel. Petitioner again failed to do this. Lastly, the SEC Hearing Panel
had determined that there was sufficient evidence on record to render an informed judgment on the issues of
fact before it. Thus, there is nothing irregular in the discontinuation of the presentation of rebuttal evidence.

Seventh, the disallowance of petitioners second amended complaint is also proper as the proceedings
were already at the late stage, and it was not expeditious to go back again to the stage for respondents to file
their answers and set anew a fourth preliminary conference. Besides, the amendment which petitioner wanted
to be incorporated refers to the sole new issue in PNCCs amended answer, which he could have addressed with
a reply to the amended answer or through an amended preliminary conference brief. Petitioner did neither. He
had thus waived his right to address the sole new matter raised in the amended answer; and if otherwise, the
summary and expeditious nature of the proceedings below would be duly compromised. Indeed, when a party
is given ample opportunity to present his case, his failure to do so is not a denial of due process.

In no uncertain terms, the CA explicated that the assailed acts of the SEC Hearing Panel considered as
badges of fraud by petitioner find legal mooring either in the SECs Rules of Procedure or are within its quasi-
judicial powers. Petitioners participation in the proceedings and actions taken by the panel or his failure to
vigorously pursue his objections to them can only be construed to be an acquiescence to such actions or waiver
of his rights. Petitioner cannot now be heard to complain.

No evidence of fraud and conspiracy

We now move on to the issues of fraud and conspiracy which petitioner foisted to show that the instant
case was railroaded and fast-tracked against him.

Petitioner would like us to believe that the CA and the SEC en banc erred in not considering the badges
of fraud he presented to show that the case was railroaded. First, petitioner points out that the SEC SICD only
took seven (7) days to come out with a grammar-perfect decision. Second, petitioner strongly asserts that the
proceedings were fast-tracked due to the governments action to privatize some of the assets of the GFIs which
include the subject shares of stock. Third, petitioner presents numerous instances in the July 10, 2000 SEC
SICD Decision which, he proffers, indubitably showed that it was not the Hearing Panel which penned the
decision but respondent PNCC.

We are not persuaded.

Petitioner has not shown any proof or substantial evidence of fraud and conspiracy. Indeed, he who
alleges fraud must prove it for basic is the rule that actori incumbit onus probandi.[51] Differently stated, upon the
plaintiff in a civil case, the burden of proof never parts.[52] In the case at bar, the petitioner must therefore establish
his allegation of fraud by a preponderance of evidence.[53] Once again, petitioner utterly failed to do this. In
addition, it is an aged-old rule in civil cases that he who alleges a fact has the burden of proving it and a mere
allegation is not evidence.[54] Fraud is never presumed, but must be established by clear and convincing
evidence.[55]

Indeed, a cursory reading of the comparative statements presented by petitioner proves nothing beyond
the fact that they are similarly worded. Even granting arguendo that these statements in the decision were taken
from the pleadings of PNCC, no ill-motive or adverse conclusion may be derived from said decision as the SEC
New Rules of Procedure, specifically Sec. 5 of Rule V, allows the Hearing Officer to adopt in whole or in part a
draft decision, position paper, or other pleadings for that matter filed by the parties. While it is true that the parties
did not file any draft decision or position paper, yet the Hearing Panel is not barred to adopt a part or portion of
any pleadings filed by the parties. If the Hearing Panel is allowed to adopt a draft decision or position paper,
more so is it allowed to adopt any portion from the pleadings filed by the parties.

Moreover, Sec. 1 of Rule VI particularly provides that the decision must be rendered within 20 days from
the submission of the case for resolution. Thus, by complying with the directive provided by said Rules, the
Hearing Panel cannot be faulted in rendering the July 10, 2000 Decision after only seven (7) days from the
submission of the instant case for resolution on the merits. In fact, the Hearing Panel must be commended for
doing its job expeditiously.

Anent the issue of the governments privatization as the cause of the alleged rapid processing of the case,
such is utterly specious and bereft of any factual basis. Petitioner wants us to believe that the government,
through the GFIs, exerted pressure on the Hearing Panel and the SEC en banc for a favorable judgment. This
is utterly an unfounded innuendo as petitioner has not presented even an iota of proof to substantiate his
accusation. Allegations are easily leveled but proving them is another matter. In the absence of proof, petitioner
only has bare allegations and nothing more.

Findings of facts of administrative bodies accorded finality when supported by substantial

evidence
 On the merits of the case, suffice it to say that the findings of facts and conclusions of law of the SEC are
controlling on the reviewing authority. Indeed, the rule is that the findings of fact of administrative bodies, if based
on substantial evidence, are controlling on the reviewing authority.[56]

We disagree with petitioner that there was a change in the findings by the Hearing Panel vis--vis the
findings of the Hearing Officer in the grant of the preliminary injunction upon the same set of evidence. It must
be borne in mind that the pieces of evidence presented during the hearings for the issuance of the injunctive writ
were only preliminary ones, that is, a sampling of the evidence intended to give the tribunal an idea of the
justification for the issuance of the injunctive writ pending the decision of the case on the merits. As often
repeated, the issuance of an injunctive writ cannot preempt the resolution of the case on the merits. Indeed, the
records show that PNCC and respondent GFIs presented additional evidence aside from what were presented
during the hearings for the issuance of the injunctive writ. Thus, petitioner has no basis to say that the decision
was based on the same evidence presented during the hearings for the issuance of the preliminary injunction,
which were held in 1998.
It has been held that it is not for the appellate court to substitute its own judgment for that of the
administrative agency on the sufficiency of the evidence and the credibility of the witnesses. [57] The Hearing
Panel had the optimum opportunity to review the pieces of evidence presented before it and to observe the
demeanor of the witnesses. Administrative decisions on matters within their jurisdiction are entitled to respect
and can only be set aside on proof of grave abuse of discretion, fraud, or error of law, [58]which have not been
shown by petitioner in this case.

It is well-settled that factual findings of administrative agencies are generally held to be binding and final
so long as they are supported by substantial evidence in the record of the case. It is not the function of this Court
to analyze or weigh all over again the evidence and credibility of witnesses presented before the lower court,
tribunal, or office, as we are not a trier of facts. Our jurisdiction is limited to reviewing and revising errors of law
imputed to the lower court, the latters findings of fact being conclusive and not reviewable by this Court.[59]

The CA found neither reversible error nor grave abuse of discretion on the part of the SEC en banc in
affirming the decision of the SEC SICD Hearing Panel, which was supported by substantial evidence. Thus, we
find no reason to rule otherwise.

LOI 1295 has been implemented

Even without considering our factual determination in Childrens Garden of the Philippines v. APT,[60] still
we arrive at the same conclusion that LOI 1295 was indeed implemented.
First, it is undisputed that shares of stock were issued to the GFIs converting part of their outstanding
loan credit to equity with PNCC. The certificates of stock issued attest to this fact. Moreover, the administrative
body below had duly debunked any irregularity in the face of these certificates of stock. Second, the records and
accounts of PNCC duly reflected such debt-to-equity conversion as attested to by the independent auditors
from Carlos J. Valdes & Co., Certified Public Accountants, in the comparative Financial Statements covering the
years 1982 and 1983. Third, the due issuance of the shares of stock in the names of the GFIs was corroborated
by PNCCs stock transfer agent, Caval Securities Registry, Inc. Fourth, the Deed of Confirmation and its
Supplement erased any doubt as to the implementation of LOI 1295. Thus, based on these reasons, there can
be no doubt as to the implementation of LOI 1295. Corollarily, the shares of stock subject of the instant case
issued to the GFIs were for value and thus cannot be considered as void or watered stocks.

Petitioner guilty of forum shopping

On the issue of forum shopping, we agree with both the SEC en banc and the CA that petitioner is guilty
of forum shopping. A close perusal of both the Amended Complaint in SICD SEC Case No. 05-96-5357 and the
Third Amended Complaint in Civil Case No. 95-1356 shows that both cases are derived from the same factual
issues involving substantially the same parties. Although the actions seem to be different, yet it can be seen that
there is a splitting of a cause of action.

While, on the one hand, the instant case was for the determination whether the GFIs are indeed
stockholders of PNCC and their respective number of shares, and on the other, Civil Case No. 95-1356 was for
the enforcement and compliance of LOI 1295, yet both actions involved substantially the same parties, stemming
from the same factual antecedent of the debt-to-equity conversion mandated by LOI 1295 and involved the same
cause of action that petitioner anchors both complaints, that is, that LOI 1295 was not fully implemented.

In this connection, we reject petitioners pretense that no identity exists between Civil Case No. 95-1356
and the instant case, both of which substantially involve the same parties, having the same cause of action and
which stem from the same factual antecedents. The fact remains that in Civil Case No. 95-1356, petitioner prayed
for the enforcement and compliance of LOI 1295, the same relief he could have asked for in the instant case
before the SEC proceedings below. The fact that he made PNCC as complainant in the civil case does not alter
the essence of said case in which the GFIs are made to answer substantially the same issues raised in the
instant case. It is indeed revealing that petitioner withdrew his third amended complaint before the trial court on
June 19, 2000 when the instant case was at its last stages before the Hearing Panel.Moreover, while petitioner
informed the trial court of the pendency of the instant case, yet petitioner fatally failed to state in his verification
and certification[61] the status of the instant case as required by Sec. 5, 1(b)[62] of Rule 7, 1997 Rules of Civil
Procedure. Clearly, petitioner is guilty of forum shopping.

SEC has jurisdiction to compel PNCC to hold annual stockholders meetings and election of board
of directors

Finally, it has been settled in Philippine National Construction Corporation v. Pabion[63] that PNCC is an
acquired asset corporation and not a government-owned and/or controlled corporation (GOCC). In said case,
we held that PNCC did not lose its status as a private corporation upon acquisition by the government through
GFIs of the majority of its shares of stock. Our determination that PNCC is an acquired asset corporation
removed it from the category of a GOCC. Thus, while the SEC has no jurisdiction over GOCCs with original
charter or created by special law primarily because they are governed by their charters, it retains jurisdiction over
government-acquired asset corporations.Therefore, the SEC may compel PNCC to hold a stockholders meeting
for the purpose of electing members of the latters board of directors.

WHEREFORE, the instant petition is DISMISSED for lack of merit and the November 29, 2000 Decision
of the CA in CA-G.R. SP No. 60366 is hereby AFFIRMED IN TOTO. Costs against petitioner.

SO ORDERED.
CELESTIAL NICKEL MINING G.R. No. 169080
EXPLORATION CORPORATION,
Petitioner,
Present:
- versus -
QUISUMBING, J., Chairperson,
CARPIO MORALES,
MACROASIA CORPORATION TINGA,
(formerly INFANTA MINERAL AND VELASCO, JR., and
INDUSTRIAL CORPORATION), CHICO-NAZARIO,* JJ.
BLUE RIDGE MINERAL
CORPORATION, and LEBACH
MINING CORPORATION,
Respondents.

x ---------------------------------------------- x

BLUE RIDGE MINERAL G.R. No. 172936

CORPORATION,
Petitioner,

- versus -

HON. ANGELO REYES in his

capacity as SECRETARY of
the DEPARTMENT OF
ENVIRONMENT AND NATURAL Promulgated:
RESOURCES, HON. GUILLERMO
ESTABILLO in his capacity as
REGIONAL DIRECTOR of the December 19, 2007
MINES AND GEOSCIENCES
BUREAU, REGION IV-B of the
DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES, and
MACROASIA CORPORATION
(formerly INFANTA MINERAL AND
INDUSTRIAL CORPORATION),
Respondents.

x ---------------------------------------------- x

CELESTIAL NICKEL MINING G.R. No. 176226

EXPLORATION CORPORATION,
Petitioner,

- versus -

BLUE RIDGE MINERAL

CORPORATION and MACROASIA
CORPORATION (formerly INFANTA
MINERAL AND INDUSTRIAL
CORPORATION),
Respondents.
x ---------------------------------------------- x
MACROASIA CORPORATION G.R. No. 176319
(formerly INFANTA MINERAL AND
INDUSTRIAL CORPORATION),
Petitioner,

- versus -

BLUE RIDGE MINERAL

CORPORATION and CELESTIAL
NICKEL MINING EXPLORATION
CORPORATION,
Respondents.
x-----------------------------------------------------------------------------------------x

DECISION

VELASCO, JR., J.:

The Case

Before us are four (4) petitions. The first is a Petition for Review on Certiorari [1] under Rule 45 docketed
as G.R. No. 169080, wherein petitioner Celestial Nickel Mining Exploration Corporation (Celestial) seeks to set
aside the April 15, 2005 Decision[2] of the Court of Appeals (CA) in CA-G.R. SP No. 87931. The CA affirmed the
November 26, 2004 Resolution of the Mines Adjudication Board (MAB) in MAB Case Nos. 056-97 and 057-97
(DENR Case Nos. 97-01 and 97-02), upholding the authority of the Department of Environment and Natural
Resources (DENR) Secretary to grant and cancel mineral agreements. Also assailed is the August 3,
2005 Resolution[3] of the CA denying the Motion for Reconsideration of the assailed Decision.

The second is a Petition for Certiorari[4] under Rule 65 docketed as G.R. No. 172936, wherein petitioner
Blue Ridge Mineral Corporation (Blue Ridge) seeks to annul and set aside the action of then Secretary Michael
T. Defensor, in his capacity as DENR Secretary, approving and signing two Mineral Production Sharing
Agreements (MPSAs) in favor of Macroasia Corporation (Macroasia) denominated as MPSA Nos. 220-2005-IVB
and 221-2005-IVB.

And the third and fourth are petitions for review on certiorari[5] under Rule 45 docketed as G.R. No.
176226 and G.R. No. 176319, wherein petitioners Celestial and Macroasia, respectively, seek to set aside the
May 18, 2006 Decision[6] of the CA in CA-G.R. SP No. 90828. The CA reversed and set aside the November 26,
2004 and July 12, 2005 Resolutions of the MAB, and reinstated the October 24, 2000 Decision in MAB Case
Nos. 056-97 and 057-97, granting Blue Ridge the prior and preferential right to file its application over the mining
claims of Macroasia. These petitions likewise seek to set aside the January 19, 2007 Resolution[7] of the CA
denying petitioners motions for reconsideration of the assailed Decision.
 Through our July 5, 2006 Resolution,[8] we consolidated the first two cases. While in our subsequent April
23, 2007[9] and July 11, 2007[10] Resolutions, we consolidated the four cases as they arose from the same facts.

The undisputed facts as found by the CA in CA-G.R. SP No. 87931 are as follows:

On September 24, 1973, the then Secretary of Agriculture and Natural Resources and Infanta Mineral and
Industrial Corporation (Infanta) entered into a Mining Lease Contract (V-1050) for a term of 25 years up
to September 23, 1998 for mining lode claims covering an area of 216 hectares at Sitio Linao, Ipilan, Brookes
Point, Palawan. The mining claims of Infanta covered by lode/lease contracts were as follows:

Contract No. Area Date of Issuance

LLC-V-941 18 hectares January 17, 1972
LC-V-1050 216 hectares September 24, 1973
LLC-V-1060 16 hectares October 30, 1973
LLC-V-1061 144 hectares October 30, 1973
LLC-V-1073 144 hectares April 18, 1973
MLC-MRD-52 306 hectares April 26, 1978
MLC-MRC-53 72 hectares April 26, 1978

Infantas corporate name was changed to Cobertson Holdings Corporation on January 26, 1994 and
subsequently to its present name, Macroasia Corporation, on November 6, 1995.

Sometime in 1997, Celestial filed a Petition to Cancel the subject mining lease contracts and other mining claims
of Macroasia including those covered by Mining Lease Contract No. V-1050, before the Panel of Arbitrators
(POA) of the Mines and Geo-Sciences Bureau (MGB) of the DENR. The petition was docketed as DENR Case
No. 97-01.

Blue Ridge, in an earlier letter-petition, also wrote the Director of Mines to seek cancellation of mining lease
contracts and other mining rights of Macroasia and another entity, Lebach Mining Corporation (Lebach), in
mining areas in Brookes Point. The petition was eventually docketed as DENR Case No. 97-02.

Celestial is the assignee of 144 mining claims covering such areas contiguous to Infantas (now Macroasia)
mining lode claims. Said area was involved in protracted administrative disputes with Infanta (now Macroasia),
Lecar & Sons, Inc., and Palawan Nickel Mining Corporation. Celestial also holds an MPSA with the government
which covers 2,835 hectares located at Ipilan/Maasin, Brookes Point, Palawan and two pending applications
covering another 4,040 hectares in Barangay Mainit also in Brookes Point.

Celestial sought the cancellation of Macroasias lease contracts on the following grounds: (1) the
nonpayment of Macroasia of required occupational fees and municipal taxes; (2) the non-filing of Macroasia of
Affidavits of Annual Work Obligations; (3) the failure of Macroasia to provide improvements on subject mining
claims; (4) the concentration of Macroasia on logging; (5) the encroachment, mining, and extraction by Macroasia
of nickel ore from Celestials property; (6) the ability of Celestial to subject the mining areas to commercial
production; and (7) the willingness of Celestial to pay fees and back taxes of Macroasia.

In the later part of the proceedings, Macroasia intervened in the case and submitted its position paper refuting
the grounds for cancellation invoked by Celestial.[11]

The Ruling of the Panel of Arbitrators in

DENR Case Nos. 97-01 and 97-02

Based on the records of the Bureau of Mines and findings of the field investigations, the POA found that
Macroasia and Lebach not only automatically abandoned their areas/mining claims but likewise had lost all their
rights to the mining claims. The POA granted the petition of Celestial to cancel the following Mining Lease
Contracts of Macroasia: LLC-V-941, LLC-V-1050, LLC-V-1060, LLC-V-1061, LLC-V-1073, MLC-MRD-52, and
MLC-MRC-53; and found the claims of the others indubitably meritorious.It gave Celestial the preferential right
to Macroasias mining areas.[12] It upheld Blue Ridges petition regarding DENR Case No. 97-02, but only as
against the Mining Lease Contract areas of Lebach (LLC-V-1153, LLC-V-1154, and LLC-V-1155), and the said
leased areas were declared automatically abandoned. It gave Blue Ridge priority right to the aforesaid Lebachs
areas/mining claims.[13]

Blue Ridge and Macroasia appealed before the MAB, and the cases were docketed as MAB Case Nos.
056-97 and 057-97, respectively.

Lebach did not file any notice of appeal with the required memorandum of appeal; thus, with respect to
Lebach, the above resolution became final and executory.

The Rulings of the Mines Adjudication Board in

MAB Case Nos. 056-97 and 057-97 (DENR Case Nos. 97-01 and 97-02)

The MAB resolved the issues of timeliness and perfection of Macroasias appeal; Macroasias
abandonment of its mining claims; and the preferential right over the abandoned mining claims of Macroasia.

Conformably with Section 51 of Consolidated Mines Administrative Order (CMAO)[14] implementing

Presidential Decree No. (PD) 463[15] and our ruling in Medrana v. Office of the President (OP),[16] the MAB
affirmed the POA findings that Macroasia abandoned its mining claims. The MAB found that Macroasia did not
comply with its work obligations from 1986 to 1991. It based its conclusion on the field verifications conducted
by the MGB, Region IV and validated by the Special Team tasked by the MAB. [17]However, contrary to the
findings of the POA, the MAB found that it was Blue Ridge that had prior and preferential rights over the mining
claims of Macroasia, and not Celestial.

Thus, on October 24, 2000, the MAB promulgated its Decision upholding the Decision of the POA to
cancel the Mining Lode/Lease Contracts of Macroasia; declaring abandoned the subject mining claims; and
opening the mining area with prior and preferential rights to Blue Ridge for mining applications, subject to strict
compliance with the procedure and requirements provided by law. In case Blue Ridge defaults, Celestial could
exercise the secondary priority and preferential rights, and subsequently, in case Celestial also defaults, other
qualified applicants could file.[18]
Both Celestial and Macroasia moved for reconsideration.[19] Celestial asserted that it had better rights
than Blue Ridge over the mining claims of Macroasia as it had correctly filed its petition, and filed its MPSA
application after Macroasias lease contract expired on January 17, 1997 and after the POAs resolution was
issued on September 1, 1997. Moreover, it argued that priority was not an issue when the contested area had
not yet been declared abandoned. Thus, Blue Ridges MPSA application filed on June 17, 1996 had no effect
and should not be considered superior since Macroasias lease contracts were still valid and subsisting and could
not have been canceled by Macroasias mere failure to perform annual work obligations and pay corresponding
royalties/taxes to the government.

Macroasia, in its Motion for Reconsideration, reiterated that it did not abandon its mining claims, and
even if mining was not listed among its purposes in its amended Articles of Incorporation, its mining activities
were acts that were only ultra vires but were ratified as a secondary purpose by its stockholders in subsequent
amendments of its Articles of Incorporation.

Before the MAB could resolve the motions for reconsideration, on March 16, 2001, Macroasia filed its
Supplemental Motion for Reconsideration[20] questioning the jurisdiction of the POA in canceling mining lease
contracts and mining claims. Macroasia averred that the power and authority to grant, cancel, and revoke mineral
agreements is exclusively lodged with the DENR Secretary. Macroasia further pointed out that in arrogating upon
itself such power, the POA whimsically and capriciously discarded the procedure on conferment of mining rights
laid down in Republic Act No. (RA) 7942, The Philippine Mining Act of 1995, and DENR Administrative Order
No. (AO) 96-40,[21]and perfunctorily and improperly awarded its mining rights to Blue Ridge and Celestial.

Subsequently, on November 26, 2004, the MAB issued a Resolution[22] vacating its October 24, 2000
Decision, holding that neither the POA nor the MAB had the power to revoke a mineral agreement duly entered
into by the DENR Secretary, ratiocinating that there was no provision giving the POA and MAB the concurrent
power to manage or develop mineral resources. The MAB further held that the power to cancel or revoke a
mineral agreement was exclusively lodged with the DENR Secretary; that a petition for cancellation is not a
mining dispute under the exclusive jurisdiction of the POA pursuant to Sec. 77 of RA 7942; and that the POA
could only adjudicate claims or contests during the MPSA application and not when the claims and leases were
already granted and subsisting.
 Moreover, the MAB held that there was no abandonment by Macroasia because the DENR Secretary
had not decided to release Macroasia from its obligations. The Secretary may choose not to release a contractor
from its obligations on grounds of public interest. Thus, through its said resolution, the MAB rendered its
disposition, as follows:

WHEREFORE, premises considered, the assailed Decision of October 24, 2000 is hereby
VACATED. The seven (7) mining lease contracts of Macroasia Corporation (formerly Infanta
Mineral & Industrial Corporation) are DECLARED SUBSISTING prior to their expirations without
prejudice to any Decision or Order that the Secretary may render on the same. NO
PREFERENTIAL RIGHT over the same mining claims is accorded to Blue Ridge Mineral
Corporation or Celestial Nickel Mining Exploration Corporation also without prejudice to the
determination by the Secretary over the matter at the proper time. [23]

After the issuance of the MAB Resolution, Celestial and Blue Ridge went through divergent paths in their
quest to protect their individual interests.

On January 10, 2005, Celestial assailed the November 26, 2004 MAB Resolution before the CA in a
petition for review[24] under Rule 43 of the Rules of Court. The petition entitled Celestial Nickel Mining Exploration
Corporation v. Macroasia Corporation, et al. was docketed as CA-G.R. SP No. 87931.

On the other hand, Blue Ridge first filed a Motion for Reconsideration[25] which was denied.[26] On August
26, 2005, Blue Ridge questioned the MABs November 26, 2004 and July 12, 2005 Resolutions before the CA in
a petition for review[27] entitled Blue Ridge Mineral Corporation v. Mines Adjudication Board, et al. docketed as
CA-G.R. SP No. 90828.

CA-G.R. SP No. 87931 filed by Celestial was heard by the 12th Division of the CA; while Blue Ridges
CA-G.R. SP No. 90828 was heard by the Special 10th Division. Ironically, the two divisions rendered two (2)
diametrically opposing decisions.

The Ruling of the Court of Appeals Twelfth Division

On April 15, 2005, in CA-G.R. SP No. 87931, the CA 12th Division affirmed the November 26, 2004 MAB
Resolution which declared Macroasias seven mining lease contracts as subsisting; rejected Blue Ridges claim
for preferential right over said mining claims; and upheld the exclusive authority of the DENR Secretary to
approve, cancel, and revoke mineral agreements. The CA also denied Celestials Motion for Reconsideration[28] of
the assailed August 3, 2005 Resolution.[29]

Hence, Celestial filed its Petition for Review on Certiorari[30] docketed as G.R. No. 169080, before this
Court.

The Ruling of the Court of Appeals Special Tenth Division

 On May 18, 2006, the CA Special 10th Division in CA-G.R. SP No. 90828 granted Blue Ridges petition;
reversed and set aside the November 26, 2004 and July 12, 2005 Resolutions of the MAB; and reinstated the
October 24, 2000 Decision in MAB Case Nos. 056-97 and 057-97. The Special Tenth Division canceled
Macroasias lease contracts; granted Blue Ridge prior and preferential rights; and treated the cancellation of a
mining lease agreement as a mining dispute within the exclusive jurisdiction of the POA under Sec. 77 of RA
7942, explaining that the power to resolve mining disputes, which is the greater power, necessarily includes the
lesser power to cancel mining agreements.

On February 20, 2006, Celestial filed a Most Urgent Motion for Issuance of a Temporary Restraining
Order/Preliminary Prohibitory Injunction/Mandatory Injunction[31]to defer and preclude the issuance of MPSA to
Macroasia by the MGB and the DENR Secretary. We denied this motion in our February 22, 2006 Resolution.[32]

Upon inquiry with the DENR, Blue Ridge discovered that sometime in December 2005 two MPSAs, duly
approved and signed by the DENR Secretary, had been issued in favor of Macroasia. Thus, we have the instant
Petition for Certiorari[33] filed by Blue Ridge docketed as G.R. No. 172936 under Rule 65, seeking to invalidate
the two MPSAs issued to Macroasia.

In the meantime, on June 7, 2006, Celestial filed its Motion for Partial Reconsideration[34] of the May 18,
2006 CA Decision in CA-G.R. SP No. 90828, while Macroasia filed its motion for reconsideration of the same
CA decision on July 7, 2006. The motions were denied in the assailed January 19, 2007 CA Resolution. Hence,
on March 8, 2007, Celestial filed the third petition[35] docketed as G.R. No. 176226, assailing the CAs May 18,
2006 Decision and January 19, 2007 Resolution, insofar as these granted Blue Ridges prior and preferential
rights. While on March 9, 2007, Macroasia filed the fourth petition[36] docketed as G.R. No. 176319, also assailing
the CAs May 18, 2006 Decision and January 19, 2007 Resolution.

The Issues

In G.R. No. 169080, petitioner Celestial raises the following issues for our consideration:

(1) Whether or not Macroasia, for reasons of public policy is estopped from assailing the alleged
lack of jurisdiction of the Panel of Arbitrators and the Mines Adjudication Board only after receiving
an adverse judgment therefrom? [sic]

(2) Whether or not it is only the Secretary of the DENR who has the jurisdiction to cancel mining
contracts and privileges? [sic]

(3) Whether or not a petition for the cancellation of a mining lease contract or privilege is a mining
dispute within the meaning of the law? [sic]
(4) Whether or not Infantas (Macroasia) mining lease contract areas were deemed abandoned
warranting the cancellation of the lease contracts and the opening of the areas to other
qualified applicants? [sic]
 (5) Whether or not Macroasia/Infanta had lost its right to participate in this case after it failed to
seasonably file its appeal and after its lease contracts had been declared abandoned and
expired without having been renewed by the government? [sic]

(6) Whether or not Celestial has the preferential right to apply for the 23 DE LARA claims which
were included in Infantas (Macroasia) expired lease contract (LLC-V-941) and the other areas
declared as lapsed or abandoned by MGB-Region 4 and the Panel of Arbitrators?[37] [sic]

In G.R. No. 172936, petitioner Blue Ridge raises the following grounds for the allowance of the petition:

At the outset, the instant petition must be given due course and taken cognizance of by the
Honorable Court considering that exceptional and compelling circumstances justify the availment
of the instant petition and the call for the exercise of the Honorable Courts primary jurisdiction.

A. The exploration, development and utilization of minerals, petroleum and other mineral oils are
imbued with public interest. The action of then Secretary Defensor, maintained and continued by
public respondent Secretary Reyes, was tainted with grave abuse of discretion, has far-reaching
consequences because of the magnitude of the effect created thereby.

B. The issues in the instant petition have already been put to fore by Celestial with the First
Division of the Honorable Court, and hence, this circumstance justifies the cognizance by
the Honorable Court of the instant petition.

II

It was grave abuse of discretion amounting to lack and/or excess of jurisdiction for then Secretary
Defensor to have issued the subject MPSAs in favor of private respondent Macroasia, considering
that:

A. Non-compliance of the mandatory requirements by private respondent Macroasia prior to

approval of the subject MPSAs should have precluded then Secretary Defensor from
approving subject MPSAs.

B. Petitioner Blue Ridge has the prior and preferential right to file its mining application over the
mining claims covered by the subject MPSAs, pursuant to the Decision dated 24 October
2000 of the Board and as affirmed by the Decision dated 18 May 2006 of the Court of
Appeals in CA-G.R. SP No. 90828.[38]
In G.R. No. 176226, petitioner Celestial ascribes the following errors to the CA for our consideration:

(1) That in reinstating and adopting as its own the Decision of the Mine Adjudication Board
affirming the abandonment and cancellation of the mining areas/claims of Macroasia (Infanta) but
awarding the prior or preferential rights to Blue Ridge, the Hon. Court of Appeals had decided a
question of substance in a way not in accord with the Law (RA 7942) or with the applicable
decisions of the Supreme Court; in other words, errors of law had been committed by the Hon.
Court of Appeals in granting preferential rights to Blue Ridge;

(2) That the Hon. Court of Appeals has so far departed from the accepted and usual course of
judicial proceedings or so far sanctioned such departure by the Mines Adjudication Board in its
Decision of May 18, 2006 and Resolution of January 19, 2007 because:

(A) The findings of fact of the Hon. Court of Appeals are contradictory or
inconsistent with the findings of the Panel of Arbitrators;
 (B) There is grave abuse of discretion on the part of the Hon. Court of Appeals in
its appreciation of the facts, the evidence and the law thereby leading it to make the
erroneous conclusion that Blue Ridge, not Celestial, is entitled to the Award of
prior/preferential rights over the mining areas declared as abandoned by Macroasia;

(C) There is likewise, a grave abuse of discretion on the part of the Hon. Court of
Appeals in that the said Court did not even consider some of the issues raised by Celestial;

(D) That the findings of the Hon. Court of Appeals are mere conclusions not
supported by substantial evidence and without citation of the specific evidence upon which
they are based; they were arrived at arbitrarily or in disregard of contradiction of the
evidence on record and findings of the Panel of Arbitrators in the Resolution of September
1, 1997;

(E) That the findings of the Hon. Court of Appeals are premised on the absence of
evidence but such findings are contradicted by the evidence on record and are violative
of the provisions of RA 7942 and its Implementing Rules and Regulations.[39]

In G.R. No. 176319, petitioner Macroasia raises the following grounds for the allowance of the petition:
I.

The Court of Appeals (Special Tenth Division) should have dismissed the Petition of Blue Ridge
outright since the issues, facts and matters involved in the said Petition are identical to those
which had already been painstakingly passed upon, reviewed and resolved by the Court of
Appeals Twelfth Division in CA-G.R. SP No. 87931

II.

The Court of Appeals (Special Tenth Division) gravely erred in denying Macroasias Motion to
Inhibit Associate Justice Rosmari Carandang from hearing and deciding the Petition

III.

There were no factual nor legal bases for the Court of Appeals to rule that Macroasia had waived
its right to question the jurisdiction of the Mines Adjudication Board

IV.

Republic Act No. 7942 contains provisions which unequivocally indicate that only the Secretary
of the Department of Environment and Natural Resources has the power and authority to cancel
mining lease agreements

V.

The Court of Appeals (Special Tenth Division) gravely erred in perfunctorily transferring
Macroasias mining lease agreements to Blue Ridge without observing the required procedure nor
providing any basis therefor[40]

The Courts Ruling

 The petitions under G.R. Nos. 169080, 172936, and 176226 are bereft of merit, while the petition under
G.R. No. 176319 is meritorious.

The pith of the controversy, upon which the other issues are hinged is, who has authority and jurisdiction
to cancel existing mineral agreements under RA 7942 in relation to PD 463 and pertinent rules and regulations.

G.R. Nos. 169080, 176226 and 176319

We will jointly tackle G.R. Nos. 169080, 176266, and 176319 as the issues and arguments of these three
are inextricably intertwined.

Core Issue: Jurisdiction over Cancellation of Mineral Agreements

Petitioner Celestial maintains that while the jurisdiction to approve mining lease contracts or mineral
agreements is conferred on the DENR Secretary, Sec. 77(a) of RA 7942 by implication granted to the POA and
MAB the authority to cancel existing mining lease contracts or mineral agreements.

On the other hand, respondent Macroasia strongly asserts that it is the DENR Secretary who has the
exclusive and primary jurisdiction to grant and cancel existing mining lease contracts; thus, the POA and MAB
have no jurisdiction to cancel much less to grant any preferential rights to other mining firms.

Before we resolve this core issue of jurisdiction over cancellation of mining lease contracts, we first need
to look back at previous mining laws pertinent to this issue.

Under PD 463, The Mineral Resources Development Decree of 1974, which took effect on May 17, 1974,
applications for lease of mining claims were required to be filed with the Director of the Bureau of Mines, within
two (2) days from the date of their recording.[41] Sec. 40 of PD 463 provided that if no adverse claim was filed
within (15) days after the first date of publication, it was conclusively presumed that no adverse claim existed
and thereafter no objection from third parties to the grant of the lease could be heard, except protests pending
at the time of publication. The Secretary would then approve and issue the corresponding mining lease
contract. In case of any protest or adverse claim relating to any mining claim and lease application, Secs. 48 and
50 of PD 463 prescribed the procedure. Under Sec. 48, the protest should be filed with the Bureau of
Mines. Under Sec. 50, any party not satisfied with the decision or order of the Director could, within five (5) days
from receipt of the decision or order, appeal to the Secretary. The decisions of the Secretary were likewise
appealable within five (5) days from receipts by the affected party to the President of the Philippines whose
decision shall be final and executory. PD 463 was, however, silent as to who was authorized to cancel the mineral
agreements.
 On July 10, 1987, President Corazon C. Aquino issued Executive Order No. (EO) 211. Under Sec. 2 of
EO 211, the processing, evaluation, and approval of all mining applications, declarations of locations, operating
agreements, and service contracts were governed by PD 463, as amended. EO 211 likewise did not contain any
provision on the authority to cancel operating agreements and service contracts.

On July 25, 1987, EO 279 was issued by President Aquino. It authorized the DENR Secretary 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 citizen,
corporation, or association, at least 60% of whose capital was owned by Filipino citizens.[42] The contract or
agreement was subject to the approval of the President.[43] With respect to contracts of foreign-owned
corporations or foreign investors involving either technical or financial assistance for large-scale exploration,
development, and utilization of minerals, the DENR Secretary could recommend approval of said contracts to
the President.[44] EO 279 provided that PD 463 and its implementing rules and regulations, which were not
inconsistent with EO 279, continued in force and effect.[45] Again, EO 279 was silent on the authority to cancel
mineral agreements.

RA 7942, The Philippine Mining Act of 1995 enacted on March 3, 1995, repealed the provisions of PD
463 inconsistent with RA 7942. Unlike PD 463, where the application was filed with the Bureau of Mines Director,
the applications for mineral agreements are now required to be filed with the Regional Director as provided by
Sec. 29 of RA 7942. The proper filing gave the proponent the prior right to be approved by the Secretary and
thereafter to be submitted to the President. The President shall provide a list to Congress of every approved
mineral agreement within 30 days from its approval by the Secretary. Again, RA 7942 is silent on who has
authority to cancel the agreement.

Compared to PD 463 where disputes were decided by the Bureau of Mines Director whose decisions
were appealable to the DENR Secretary and then to the President, RA 7942 now provides for the creation of
quasi-judicial bodies (POA and MAB) that would have jurisdiction over conflicts arising from the applications and
mineral agreements. Secs. 77, 78, and 79 lay down the procedure, thus:

SEC. 77. Panel of Arbitrators.There shall be a panel of arbitrators in the regional office of the
Department composed of three (3) members, two (2) of whom must be members of the Philippine
Bar in good standing and one [1] licensed mining engineer or a professional in a related field, and
duly designated by the Secretary as recommended by the Mines and Geosciences Bureau
Director. Those designated as members of the panel shall serve as such in addition to their work
in the Department without receiving any additional compensation. As much as practicable, said
members shall come from the different bureaus of the Department in the region. The presiding
officer thereof shall be selected by the drawing of lots. His tenure as presiding officer shall be on
a yearly basis. The members of the panel shall perform their duties and obligations in hearing and
deciding cases until their designation is withdrawn or revoked by the Secretary. Within thirty (30)
working days, after the submission of the case by the parties for decision, the panel shall have
exclusive and original jurisdiction to hear and decide on the following:

(a) Disputes involving rights to mining areas;

 (b) Disputes involving mineral agreements or permits;

(c) Disputes involving surface owners, occupants and claimholders/concessionaires; and

(d) Disputes pending before the Bureau and the Department at the date of the effectivity of this
Act.

SEC. 78. Appellate Jurisdiction.The decision or order of the panel of arbitrators may be appealed
by the party not satisfied thereto to the Mines Adjudication Board within fifteen (15) days from
receipt thereof which must decide the case within thirty (30) days from submission thereof for
decision.

SEC. 79. Mines Adjudication Board.The Mines Adjudication Board shall be composed of three (3)
members. The Secretary shall be the chairman with the Director of the Mines and Geosciences
Bureau and the Undersecretary for Operations of the Department as members thereof.

xxxx

A petition for review by certiorari and question of law may be filed by the aggrieved party with the
Supreme Court within thirty (30) days from receipt of the order or decision of the Board.

RA 7942 is also silent as to who is empowered to cancel existing lease contracts and mineral agreements.

Meanwhile, in Southeast Mindanao Gold Mining Corp. v. MAB, we explained that the decision of the MAB
can first be appealed, via a petition for review, to the CA before elevating the case to this Court.[46]

After a scrutiny of the provisions of PD 463, EO 211, EO 279, RA 7942 and its implementing rules and
regulations, executive issuances, and case law, we rule that the DENR Secretary, not the POA, has the
jurisdiction to cancel existing mineral lease contracts or mineral agreements based on the following reasons:

1. The power of the DENR Secretary to cancel mineral agreements emanates from his administrative
authority, supervision, management, and control over mineral resources under Chapter I, Title XIV of Book IV of
the Revised Administrative Code of 1987, viz:

Chapter 1General Provisions

Section 1. Declaration of Policy.(1) The State shall ensure, for the benefit of the Filipino people,
the full exploration and development as well as the judicious disposition, utilization,
management, renewal and conservation of the countrys forest, mineral, land, waters,
fisheries, wildlife, off-shore areas and other natural resources x x x

Sec. 2. Mandate.(1) The Department of Environment and Natural Resources shall be

primarily responsible for the implementation of the foregoing policy. (2) It shall, subject to
law and higher authority, be in charge of carrying out the States constitutional mandate to
control and supervise the exploration, development, utilization, and conservation of the
countrys natural resources.

xxxx

Sec. 4. Powers and Functions.The Department shall:

 xxxx

(2) Formulate, implement and supervise the implementation of the governments policies,
plans, and programs pertaining to the management, conservation, development, use and
replenishment of the countrys natural resources;

xxxx

(4) Exercise supervision and control over forest lands, alienable and disposable public
lands, mineral resources x x x

xxxx

(12) Regulate the development, disposition, extraction, exploration and use of the countrys
forest, land, water and mineral resources;

(13) Assume responsibility for the assessment, development, protection, licensing and
regulation as provided for by law, where applicable, of all energy and natural resources;
the regulation and monitoring of service contractors, licensees, lessees, and permit for the
extraction, exploration, development and use of natural resources products; x x x

xxxx

(15) Exercise exclusive jurisdiction on the management and disposition of all lands
of the public domain x x x

Chapter 2The Department Proper

xxxx

Sec. 8. The Secretary.The Secretary shall:

xxxx

(3) Promulgate rules, regulations and other issuances necessary in carrying out the
Departments mandate, objectives, policies, plans, programs and projects.

(4) Exercise supervision and control over all functions and activities of the
Department;

(5) Delegate authority for the performance of any administrative or substantive function to
subordinate officials of the Department x x x (Emphasis supplied.)

It is the DENR, through the Secretary, that manages, supervises, and regulates the use and development
of all mineral resources of the country. It has exclusive jurisdiction over the management of all lands of public
domain, which covers mineral resources and deposits from said lands. It has the power to oversee, supervise,
and police our natural resources which include mineral resources. Derived from the broad and explicit powers of
the DENR and its Secretary under the Administrative Code of 1987 is the power to approve mineral agreements
and necessarily to cancel or cause to cancel said agreements.
 2. RA 7942 confers to the DENR Secretary specific authority over mineral resources.

Secs. 8 and 29 of RA 7942 pertinently provide:

SEC. 8. Authority of the Department.The Department shall be the primary government agency
responsible for the conservation, management, development, and proper use of the States
mineral resources including those in reservations, watershed areas, and lands of the public
domain. The Secretary shall have the authority to enter into mineral agreements on behalf
of the Government upon the recommendation of the Director, promulgate such rules and
regulations as may be necessary to implement the intent and provisions of this Act.

SEC. 29. Filing and approval of Mineral Agreements.x x x.

The filing of a proposal for a mineral agreement shall give the proponent the prior right to areas
covered by the same. The proposed mineral agreement will be approved by the
Secretaryand copies thereof shall be submitted to the President. Thereafter, the President shall
provide a list to Congress of every approved mineral agreement within thirty (30) days from its
approval by the Secretary. (Emphasis supplied.)

Sec. 29 is a carry over of Sec. 40 of PD 463 which granted jurisdiction to the DENR Secretary to approve
mining lease contracts on behalf of the government, thus:

SEC. 40. Issuance of Mining Lease Contract.If no adverse claim is filed within fifteen (15)
days after the first date of publication, it shall be conclusively presumed that no such adverse
claim exists and thereafter no objection from third parties to the grant of the lease shall be heard,
except protest pending at the time of publication, and the Secretary shall approve and issue
the corresponding mining lease x x x.

To enforce PD 463, the CMAO containing the rules and regulations implementing PD 463 was issued. Sec. 44
of the CMAO provides:

SEC. 44. Procedure for Cancellation.Before any mining lease contract is cancelled for any cause
enumerated in Section 43 above, the mining lessee shall first be notified in writing of such cause
or causes, and shall be given an opportunity to be heard, and to show cause why the lease shall
not be cancelled.

If, upon investigation, the Secretary shall find the lessee to be in default, the former may
warn the lessee, suspend his operations or cancel the lease contract (emphasis supplied).
Sec. 4 of EO 279 provided that the provisions of PD 463 and its implementing rules and regulations, not
inconsistent with the executive order, continue in force and effect.

When RA 7942 took effect on March 3, 1995, there was no provision on who could cancel mineral
agreements. However, since the aforequoted Sec. 44 of the CMAO implementing PD 463 was not repealed by
RA 7942 and DENR AO 96-40, not being contrary to any of the provisions in them, then it follows that Sec. 44
serves as basis for the DENR Secretarys authority to cancel mineral agreements.

Since the DENR Secretary had the power to approve and cancel mineral agreements under PD 463, and
the power to cancel them under the CMAO implementing PD 463, EO 211, and EO 279, then there was no recall
of the power of the DENR Secretary under RA 7942. Historically, the DENR Secretary has the express power to
approve mineral agreements or contracts and the implied power to cancel said agreements.

It is a well-established principle that in the interpretation of an ambiguous provision of law, the history of
the enactment of the law may be used as an extrinsic aid to determine the import of the legal provision or the
law.[47] History of the enactment of the statute constitutes prior laws on the same subject matter. Legislative
history necessitates review of the origin, antecedents and derivation of the law in question to discover the
legislative purpose or intent.[48] It can be assumed that the new legislation has been enacted as continuation of
the existing legislative policy or as a new effort to perpetuate it or further advance it. [49]

We rule, therefore, that based on the grant of implied power to terminate mining or mineral contracts
under previous laws or executive issuances like PD 463, EO 211, and EO 279, RA 7942 should be construed
as a continuation of the legislative intent to authorize the DENR Secretary to cancel mineral agreements on
account of violations of the terms and conditions thereof.

3. Under RA 7942, the power of control and supervision of the DENR Secretary over the MGB to cancel
or recommend cancellation of mineral rights clearly demonstrates the authority of the DENR Secretary to cancel
or approve the cancellation of mineral agreements.

Under Sec. 9 of RA 7942, the MGB was given the power of direct supervision of mineral lands and
resources, thus:

Sec. 9. Authority of the Bureau.The Bureau shall have direct charge in the administration and
disposition of mineral lands and mineral resources and shall undertake geological, mining,
metallurgical, chemical, and other researches as well as geological and mineral
exploration surveys. The Director shall recommend to the Secretary the granting of mineral
agreements to duly qualified persons and shall monitor the compliance by the contractor
of the terms and conditions of the mineral agreements. The Bureau may confiscate surety,
performance and guaranty bonds posted through an order to be promulgated by the Director. The
Director may deputize, when necessary, any member or unit of the Philippine National Police,
barangay, duly registered nongovernmental organization (NGO) or any qualified person to police
all mining activities. (Emphasis supplied.)

Corollary to the power of the MGB Director to recommend approval of mineral agreements is his power
to cancel or recommend cancellation of mining rights covered by said agreements under Sec. 7 of DENR AO
96-40, containing the revised Implementing Rules and Regulations of RA 7942. Sec. 7 reads:
 Sec. 7. Organization and Authority of the Bureau.

xxxx

The Bureau shall have the following authority, among others:

a. To have direct charge in the administration and disposition of mineral land and mineral
resources;

xxxx

d. To recommend to the Secretary the granting of mineral agreements or to endorse to the

Secretary for action by the President the grant of FTAAs [Financial and Technical Assistance
Agreements], in favor of qualified persons and to monitor compliance by the Contractor with the
terms and conditions of the mineral agreements and FTAAs.

e. To cancel or to recommend cancellation after due process, mining rights, mining

applications and mining claims for non-compliance with pertinent laws, rules and regulations.

It is explicit from the foregoing provision that the DENR Secretary has the authority to cancel mineral
agreements based on the recommendation of the MGB Director. As a matter of fact, the power to cancel mining
rights can even be delegated by the DENR Secretary to the MGB Director. Clearly, it is the Secretary, not the
POA, that has authority and jurisdiction over cancellation of existing mining contracts or mineral agreements.

4. The DENR Secretarys power to cancel mining rights or agreements through the MGB can be inferred
from Sec. 230, Chapter XXIV of DENR AO 96-40 on cancellation, revocation, and termination of a permit/mineral
agreement/FTAA. Sec. 230 provides:

Section 230. Grounds

The following grounds for cancellation revocation and termination of a Mining Permit
Mineral Agreement/FTAA.

a. Violation of any of the terms and conditions of the Permits or Agreements;

b. Nonpayment of taxes and fees due the government for two (2) consecutive years; and

c. Falsehood or omission of facts in the application for exploration [or Mining] Permit Mineral
Agreement/FTAA or other permits which may later, change or affect substantially the facts set
forth in said statements.

Though Sec. 230 is silent as to who can order the cancellation, revocation, and termination of a permit/mineral
agreement/FTAA, it has to be correlated with the power of the MGB under Sec. 7 of AO 96-40 to cancel or to
recommend cancellation, after due process, mining rights, mining applications and mining claims for
noncompliance with pertinent laws, rules and regulations. As the MGB is under the supervision of the DENR
Secretary, then the logical conclusion is that it is the DENR Secretary who can cancel the mineral agreements
and not the POA nor the MAB.

5. Celestial and Blue Ridge are not unaware of the stipulations in the Mining Lease Contract Nos. V-1050 and
MRD-52,[50] the cancellation of which they sought from the POA.It is clear from said lease contracts that the
parties are the Republic of the Philippines represented by the Secretary of Agriculture and Natural Resources
(now DENR Secretary) as lessor, and Infanta (Macroasia) as lessee. Paragraph 18 of said lease contracts
provides:

Whenever the LESSEE fails to comply with any provision of [PD 463, and] Commonwealth Acts
Nos. 137, 466 and 470, [both as amended,] and/or the rules and regulations promulgated
thereunder, or any of the covenants therein, the LESSOR may declare this lease
cancelled and, after having given thirty (30) days notice in writing to the LESSEE, may enter and
take possession of the said premises, and said lessee shall be liable for all unpaid rentals,
royalties and taxes due the Government on the lease up to the time of the forfeiture or
cancellation, in which event, the LESSEE hereby covenants and agrees to give up the possession
of the property leased. (Emphasis supplied.)

Thus, the government represented by the then Secretary of Agriculture and Natural Resources (now the DENR
Secretary) has the power to cancel the lease contracts for violations of existing laws, rules and regulations and
the terms and conditions of the contracts. Celestial and Blue Ridge are now estopped from challenging the power
and authority of the DENR Secretary to cancel mineral agreements.

However, Celestial and Blue Ridge insist that the power to cancel mineral agreements is also lodged with the
POA under the explicit provisions of Sec. 77 of RA 7942.

This postulation is incorrect.

Sec. 77 of RA 7942 lays down the jurisdiction of POA, to wit:

Within thirty (30) days, after the submission of the case by the parties for the decision, the panel
shall have exclusive and original jurisdiction to hear and decide the following:

(a) Disputes involving rights to mining areas

(b) Disputes involving mineral agreements or permits

The phrase disputes involving rights to mining areas refers to any adverse claim, protest, or opposition
to an application for mineral agreement. The POA therefore has the jurisdiction to resolve any adverse claim,
protest, or opposition to a pending application for a mineral agreement filed with the concerned Regional Office
of the MGB. This is clear from Secs. 38 and 41 of DENR AO 96-40, which provide:
 Sec. 38.

xxxx

Within thirty (30) calendar days from the last date of publication/posting/radio
announcements, the authorized officer(s) of the concerned office(s) shall issue a certification(s)
that the publication/posting/radio announcement have been complied with. Any adverse claim,
protest or opposition shall be filed directly, within thirty (30) calendar days from the last
date of publication/posting/radio announcement, with the concerned Regional Office or
through any concerned PENRO or CENRO for filing in the concerned Regional Office for
purposes of its resolution by the Panel of Arbitrators pursuant to the provisions of this Act
and these implementing rules and regulations. Upon final resolution of any adverse claim,
protest or opposition, the Panel of Arbitrators shall likewise issue a certification to that
effect within five (5) working days from the date of finality of resolution thereof. Where
there is no adverse claim, protest or opposition, the Panel of Arbitrators shall likewise
issue a Certification to that effect within five working days therefrom.

xxxx

No Mineral Agreement shall be approved unless the requirements under this

Section are fully complied with and any adverse claim/protest/opposition is finally
resolved by the Panel of Arbitrators.

Sec. 41.
xxxx

Within fifteen (15) working days from the receipt of the Certification issued by the
Panel of Arbitrators as provided in Section 38 hereof, the concerned Regional Director
shall initially evaluate the Mineral Agreement applications in areas outside Mineral
reservations. He/She shall thereafter endorse his/her findings to the Bureau for further
evaluation by the Director within fifteen (15) working days from receipt of forwarded
documents. Thereafter, the Director shall endorse the same to the secretary for
consideration/approval within fifteen working days from receipt of such endorsement.

In case of Mineral Agreement applications in areas with Mineral Reservations, within

fifteen (15) working days from receipt of the Certification issued by the Panel of Arbitrators
as provided for in Section 38 hereof, the same shall be evaluated and endorsed by the
Director to the Secretary for consideration/approval within fifteen days from receipt of
such endorsement. (Emphasis supplied.)

It has been made clear from the aforecited provisions that the disputes involving rights to mining areas
under Sec. 77(a) specifically refer only to those disputes relative to the applications for a mineral agreement or
conferment of mining rights.
The jurisdiction of the POA over adverse claims, protest, or oppositions to a mining right application is
further elucidated by Secs. 219 and 43 of DENR AO 95-936, which read:

Sec. 219. Filing of Adverse Claims/Conflicts/Oppositions.Notwithstanding the provisions

of Sections 28, 43 and 57 above, any adverse claim, protest or opposition specified in said
sections may also be filed directly with the Panel of Arbitrators within the concerned periods
for filing such claim, protest or opposition as specified in said Sections.
 Sec. 43. Publication/Posting of Mineral Agreement Application.
xxxx

The Regional Director or concerned Regional Director shall also cause the posting of the
application on the bulletin boards of the Bureau, concerned Regional office(s) and in the
concerned province(s) and municipality(ies), copy furnished the barangays where the proposed
contract area is located once a week for two (2) consecutive weeks in a language generally
understood in the locality. After forty-five (45) days from the last date of publication/posting has
been made and no adverse claim, protest or opposition was filed within the said forty-five (45)
days, the concerned offices shall issue a certification that publication/posting has been made and
that no adverse claim, protest or opposition of whatever nature has been filed. On the other
hand, if there be any adverse claim, protest or opposition, the same shall be filed within
forty-five (45) days from the last date of publication/posting, with the Regional Offices
concerned, or through the Departments Community Environment and Natural Resources
Officers (CENRO) or Provincial Environment and Natural Resources Officers (PENRO), to
be filed at the Regional Office for resolution of the Panel of Arbitrators. However previously
published valid and subsisting mining claims are exempted from posted/posting required under
this Section.

No mineral agreement shall be approved unless the requirements under this section
are fully complied with and any opposition/adverse claim is dealt with in writing by the
Director and resolved by the Panel of Arbitrators. (Emphasis supplied.)

These provisions lead us to conclude that the power of the POA to resolve any adverse claim, opposition,
or protest relative to mining rights under Sec. 77(a) of RA 7942 is confined only to adverse claims, conflicts and
oppositions relating to applications for the grant of mineral rights. POAs jurisdiction is confined only to
resolutions of such adverse claims, conflicts and oppositions and it has no authority to approve or reject said
applications. Such power is vested in the DENR Secretary upon recommendation of the MGB Director. Clearly,
POAs jurisdiction over disputes involving rights to mining areas has nothing to do with the cancellation of existing
mineral agreements.

On the other hand, Celestial and Blue Ridge contend that POA has jurisdiction over their petitions for the
cancellation of Macroasias lease agreements banking on POAs jurisdiction over disputes involving mineral
agreements or permits under Sec. 77 (b) of RA 7942.

Such position is bereft of merit.

As earlier discussed, the DENR Secretary, by virtue of his powers as administrative head of his
department in charge of the management and supervision of the natural resources of the country under the 1987
Administrative Code, RA 7942, and other laws, rules, and regulations, can cancel a mineral agreement for
violation of its terms, even without a petition or request filed for its cancellation, provided there is compliance
with due process. Since the cancellation of the mineral agreement is approved by the DENR Secretary, then the
recourse of the contractor is to elevate the matter to the OP pursuant to AO 18, Series of 1987 but not with the
POA.
 Matched with the legal provisions empowering the DENR Secretary to cancel a mineral agreement is
Sec. 77 (b) of RA 7942 which grants POA jurisdiction over disputes involving mineral agreements.

A dispute is defined as a conflict or controversy; a conflict of claims or rights; an assertion of a right, claim or
demand on one side; met by contrary claims or allegations on the other.[51] It is synonymous to a cause of action
which is an act or omission by which a party violates a right of another.[52]

A petition or complaint originating from a dispute can be filed or initiated only by a real party-in-interest. The rules
of court define a real party-in-interest as the party who stands to be benefited or injured by the judgment in the
suit or the party entitled to the avails of the suit.[53] Every action, therefore, can only be prosecuted in the name
of the real party-in-interest.[54] It has been explained that a real party-in-interest plaintiff is one who has a legal
right, while a real party-in-interest-defendant is one who has a correlative legal obligation whose act or omission
violates the legal right of the former.[55]

On the other hand, interest means material interest, an interest in issue and to be affected by the decree, as
distinguished from mere interest in the question involved, or a mere incidental interest. It is settled in this
jurisdiction that one having no right or interest to protect cannot invoke the jurisdiction of the court as a party-
plaintiff in an action.[56] Real interest is defined as a present substantial interest, as distinguished from a mere
expectancy, or a future, contingent, subordinate or consequential interest.[57]

From the foregoing, a petition for the cancellation of an existing mineral agreement covering an area applied for
by an applicant based on the alleged violation of any of the terms thereof, is not a dispute involving a mineral
agreement under Sec. 77 (b) of RA 7942. It does not pertain to a violation by a party of the right of another. The
applicant is not a real party-in-interest as he does not have a material or substantial interest in the mineral
agreement but only a prospective or expectant right or interest in the mining area. He has no legal right to such
mining claim and hence no dispute can arise between the applicant and the parties to the mineral agreement. The
court rules therefore that a petition for cancellation of a mineral agreement anchored on the breach thereof even
if filed by an applicant to a mining claim, like Celestial and Blue Ridge, falls within the jurisdiction of the DENR
Secretary and not POA. Such petition is excluded from the coverage of the POAs jurisdiction over disputes
involving mineral agreements under Sec. 77 (b) of RA 7942.

Macroasia not estopped from raising the issue of jurisdiction on appeal

On the related issue of estoppel, petitioner Celestial argues that Macroasia is estopped from raising and
questioning the issue of the jurisdiction of the POA and MAB over the petition for cancellation of its mining lease
contracts, when Macroasia raised it only in its Supplemental Motion for Reconsideration.

We rule that the principle of estoppel does not apply.

 Indeed, Macroasia was not the one that initiated the instant case before the POA, and thus was not the
one that invoked the jurisdiction of the POA. Hence, on appeal, Macroasia is not precluded from raising the issue
of jurisdiction as it may be invoked even on appeal.[58] As a matter of fact, a party can raise the issue of jurisdiction
at any stage of the proceedings.

Petitioner Celestials reliance on Villela v. Gozun[59] to support the contention that the POA has jurisdiction
to hear and decide a petition to cancel existing mining lease contracts, is misplaced. In said case, we dismissed
the petition on the ground of non-exhaustion of administrative remedies and disregarded judicial hierarchy as no
compelling reason was shown to warrant otherwise. While we pointed out the authority of the POA, there was
no categorical pronouncement on the jurisdictional issue.

No valid pronouncement of abandonment due to lack of jurisdiction over petition to cancel

As we are not a trier of facts, we need not make any finding on the various investigations done by the
MGB and MAB on the issue of Macroasias non-compliance with its work obligations and nonpayment of taxes
and fees. Verily, the law does not impose automatic cancellation of an existing mining lease contract, as it is a
question of fact which must be determined by the MGB which can recommend the cancellation of the mineral or
lease agreements to the DENR Secretary. Be that as it may, since the POA and MAB have no jurisdiction over
the petition for cancellation of existing mining lease contracts of Macroasia, they could not have made any
binding pronouncement that Macroasia had indeed abandoned the subject mining claims. Besides, it is the
DENR Secretary who has the authority to cancel Macroasias existing mining lease contracts whether on grounds
of abandonment or any valid grounds for cancellation.

Decision in CA-G.R. SP No. 90828 not in accord with the law

With our resolution of the issue on the lack of jurisdiction of the POA and the MAB over petitions to cancel
existing mining lease contracts or mineral agreements, it is thus clear that the May 18, 2006 Decision in CA-G.R.
SP No. 90828 must be nullified for being not in accord with the law and the April 15, 2005 Decision in CA-G.R.
SP No. 87931 must be upheld.

Notwithstanding the nullification of the May 18, 2006 Decision of the Special Tenth Division in CA-G.R.
SP No. 90828, the rendition of two conflicting decisions of the two CA Divisions over the same challenged
resolutions of the MAB should be avoided in the future as this is anathema to stability of judicial decisions and
orderly administration of justice.

The chronology of events reveals the following:

1. January 10, 2005 petitioner Celestial filed its petition docketed as CA-G.R. SP No. 87931 with the CA.
 2. April 15, 2005 the CA through its Twelfth Division rendered its Decision in CA-G.R. SP No. 87931
affirming the November 26, 2004 MAB Resolution.

3. July 12, 2005 respondent Blue Ridge filed its petition docketed as CA-G.R. SP No. 90828 with the
CA. It is clear that the Blue Ridge petition was filed with the CA three months after the decision in CA-G.R. SP
No. 87931 was promulgated.

4. May 18, 2006 the CA through its Special Tenth Division rendered its Decision setting aside
the November 26, 2004 and July 12, 2005 Resolutions of the MAB and reinstating the October 24, 2000 MAB
Decision.

From these facts, the CA Special Tenth Division should have ordered the consolidation of the petition in
CA-G.R. SP No. 90828 by CA-G.R. SP No. 87931 pursuant to the Internal Rules of the CA, the latter having the
earlier docket number. Had it done so, then the occurrence of the conflicting decisions could have been
prevented. The CA Special Tenth Division should have abided by our ruling in Nacuray v. NLRC, where we held,
Consequently, a division cannot and should not review a case already passed upon by another Division of this
Court. It is only proper, to allow the case to take its rest after having attained finality.[60]

The CA should take the appropriate steps, including the adoption or amendment of the rules, to see to it
that cases or petitions arising from the same questioned decision, order, or resolution are consolidated to steer
clear of contrary or opposing decisions of the different CA Divisions and ensure that incidents of similar nature
will not be replicated.

G.R. No. 172936

No showing that the DENR Secretary gravely abused his discretion

Now, going to the substance of the petition in G.R. No. 172936. A scrutiny of the records shows that the
DENR Secretary did not gravely abuse his discretion in approving and signing MPSA Nos. 220-2005-IVB and
221-2005-IVB in favor of Macroasia.

Petitioner Blue Ridge anchors its rights on the May 18, 2006 Decision in CA-G.R. SP No. 90828, which
we have unfortunately struck down. Blue Ridges argument in assailing the approval and issuance of the subject
MPSAs that it has been accorded preferential right by the CA has no leg to stand on.

The October 24, 2000 MAB Decision, nullified by the subsequent November 26, 2004 Resolution, is
unequivocal that Blue Ridge was granted only prior and preferential rights to FILE its mining application over the
same mining claims.[61] What was accorded Blue Ridge was only the right to file the mining application but with
no assurance that the application will be recommended for approval by the MGB and finally approved by the
DENR Secretary.

Moreover, a preferential right would at most be an inchoate right to be given priority in the grant of a
mining agreement. It has not yet been transformed into a legal and vested right unless approved by the MGB or
DENR Secretary. Even if Blue Ridge has a preferential right over the subject mining claims, it is still within the
competence and discretion of the DENR Secretary to grant mineral agreements to whomever he deems best to
pursue the mining claims over and above the preferential status given to Blue Ridge. Besides, being simply a
preferential right, it is ineffective to dissolve the pre-existing or subsisting mining lease contracts of Macroasia.

The DENR Secretary has full discretion in the grant of mineral agreements

Blue Ridge also argues that the Secretary gravely abused his discretion in approving the subject MPSAs
without Macroasia complying with the mandatory requirements for mineral agreement applications under Sec.
35 of DENR AO 96-40. Petitioner specifically cited Sec. 36 of DENR AO 96-40 to the effect that no Mineral
Agreement shall be approved unless the requirements under this section are fully complied with and any adverse
claim/protest/opposition thereto is finally resolved by the Panel of Arbitrators.Moreover, Blue Ridge contends
that the MPSAs were approved even prior to the issuance of the Compliance Certificate[62] by the National
Commission on Indigenous Peoples under the OP, which is a requisite pre-condition for the issuance of an
MPSA.

We are not persuaded.

Blue Ridge cites Sec. 38 (not Sec. 36) of DENR AO 96-40 as basis for claiming that then DENR Secretary
Defensor committed grave abuse of discretion in granting MPSA Nos. 220-2005-IVB and 221-2005-IVB to
Macroasia. Petitioners postulation cannot be entertained for the reason that the issuance of the mining
agreements was not raised before the MGB Director and DENR Secretary, nor was it amply presented before
the CA. There is even a counter-charge that Blue Ridge has not complied with the legal requirements for a mining
application. The rule is established that questions raised for the first time on appeal before this Court are not
proper and have to be rejected.Furthermore, the resolution of these factual issues would relegate the Court to a
trier of facts. The Blue Ridge plea is hindered by the factual issue bar rule where factual questions are proscribed
under Rule 65. Lastly, there was no exhaustion of administrative remedies before the MGB and
DENR. Thus, Blue Ridges petition must fail.

Primary jurisdiction of the DENR Secretary in determining whether to grant or not a mineral
agreement
 Verily, RA 7942, similar to PD 463, confers exclusive and primary jurisdiction on the DENR Secretary to
approve mineral agreements, which is purely an administrative function within the scope of his powers and
authority. In exercising such exclusive primary jurisdiction, the DENR Secretary, through the MGB, has the best
competence to determine to whom mineral agreements are granted. Settled is the rule that the courts will defer
to the decisions of the administrative offices and agencies by reason of their expertise and experience in the
matters assigned to them pursuant to the doctrine of primary jurisdiction. Administrative decisions on matter
within the jurisdiction of administrative bodies are to be respected and can only be set aside on proof of grave
abuse of discretion, fraud, or error of law.[63] Unless it is shown that the then DENR Secretary has acted in a
wanton, whimsical, or oppressive manner, giving undue advantage to a party or for an illegal consideration and
similar reasons, this Court cannot look into or review the wisdom of the exercise of such discretion. Blue
Ridge failed in this regard.

Delineation of powers and functions is accorded the three branches of government for the smooth
functioning of the different governmental services. We will not disturb nor interfere in the exercise of purely
administrative functions of the executive branch absent a clear showing of grave abuse of discretion.

Without a restraining order or injunction, litigation will not deter the DENR from exercising its
functions

While it is true that the subject mining claims are under litigation, this does not preclude the DENR and
its Secretary from carrying out their functions and duties without a restraining order or an injunctive
writ. Otherwise, public interest and public service would unduly suffer by mere litigation of particular issues where
government interests would be unduly affected. In the instant case, it must be borne in mind that the government
has a stake in the subject mining claims. Also, Macroasia had various valid existing mining lease contracts over
the subject mining lode claims issued by the DENR. Thus, Macroasia has an advantage over Blue Ridge and
Celestial insofar as the administrative aspect of pursuing the mineral agreements is concerned.

WHEREFORE, the petitions under G.R. Nos. 169080, 172936, and 176229 are DISMISSED for lack of
merit, while the petition under G.R. No. 176319 is hereby GRANTED. The assailed April 15, 2005 Decision
and August 3, 2005 Resolution of the CA in CA-G.R. SP No. 87931 are hereby AFFIRMED IN TOTO. And the
May 18, 2006 Decision and January 19, 2007 Resolution of the CA in CA-G.R. SP No. 90828 are
hereby REVERSED and SET ASIDE. In view of the foregoing considerations, we find no grave abuse of
discretion on the part of the then DENR Secretary in the approval and issuance of MPSA Nos. 220-2005-IVB
and 221-2005-IVB. Costs against Celestial Nickel Mining Exploration Corporation and Blue Ridge Mineral
Corporation.

SO ORDERED.
June 30, 1987

G.R. No. L-53373

MARIO FL. CRESPO, petitioner,

vs.
HON. LEODEGARIO L. MOGUL, Presiding Judge, CIRCUIT CRIMINAL COURT OF LUCENA CITY, 9th
Judicial Dist., THE PEOPLE OF THE PHILIPPINES, represented by the SOLICITOR GENERAL,
RICARDO BAUTISTA, ET AL., respondents.

GANCAYCO, J.:

The issue raised in this ease is whether the trial court acting on a motion to dismiss a criminal case filed by the
Provincial Fiscal upon instructions of the Secretary of Justice to whom the case was elevated for review, may
refuse to grant the motion and insist on the arraignment and trial on the merits.

On April 18, 1977 Assistant Fiscal Proceso K. de Gala with the approval of the Provincial Fiscal filed an
information for estafa against Mario Fl. Crespo in the Circuit Criminal Court of Lucena City which was docketed
as Criminal Case No. CCCIX-52 (Quezon) '77.1 When the case was set for arraigment the accused filed a motion
to defer arraignment on the ground that there was a pending petition for review filed with the Secretary of Justice
of the resolution of the Office of the Provincial Fiscal for the filing of the information. In an order of August 1,
1977, the presiding judge, His Honor, Leodegario L. Mogul, denied the motion. 2 A motion for reconsideration of
the order was denied in the order of August 5, 1977 but the arraignment was deferred to August 18, 1977 to
afford time for petitioner to elevate the matter to the appellate court. 3

A petition for certiorari and prohibition with prayer for a preliminary writ of injunction was filed by the accused in
the Court of Appeals that was docketed as CA-G.R. SP No. 06978. 4 In an order of August 17, 1977 the Court
of Appeals restrained Judge Mogul from proceeding with the arraignment of the accused until further orders of
the Court. 5 In a comment that was filed by the Solicitor General he recommended that the petition be given due
course. 6 On May 15, 1978 a decision was rendered by the Court of Appeals granting the writ and perpetually
restraining the judge from enforcing his threat to compel the arraignment of the accused in the case until the
Department of Justice shall have finally resolved the petition for review. 7

On March 22, 1978 then Undersecretary of Justice, Hon.Catalino Macaraig, Jr., resolving the petition for review
reversed the resolution of the Office of the Provincial Fiscal and directed the fiscal to move for immediate
dismissal of the information filed against the accused. 8 A motion to dismiss for insufficiency of evidence was
filed by the Provincial Fiscal dated April 10, 1978 with the trial court, 9 attaching thereto a copy of the letter of
Undersecretary Macaraig, Jr. In an order of August 2, 1978 the private prosecutor was given time to file an
opposition thereto.10 On November 24, 1978 the Judge denied the motion and set the arraigniment stating:

ORDER

For resolution is a motion to dismiss this rase filed by the procuting fiscal premised on insufficiency of
evidence, as suggested by the Undersecretary of Justice, evident from Annex "A" of the motion wherein,
among other things, the Fiscal is urged to move for dismissal for the reason that the check involved
having been issued for the payment of a pre-existing obligation the Hability of the drawer can only be civil
and not criminal.

The motion's thrust being to induce this Court to resolve the innocence of the accused on evidence not
before it but on that adduced before the Undersecretary of Justice, a matter that not only disregards the
 requirements of due process but also erodes the Court's independence and integrity, the motion is
considered as without merit and therefore hereby DENIED.

WHEREFORE, let the arraignment be, as it is hereby set for December 18, 1978 at 9:00 o'clock in the
moming.

SO ORDERED. 11

The accused then filed a petition for certiorari, prohibition and mandamus with petition for the issuance of
preliminary writ of prohibition and/or temporary restraining order in the Court of Appeals that was docketed as
CA-G.R. No. SP-08777. 12 On January 23, 1979 a restraining order was issued by the Court of Appeals against
the threatened act of arraignment of the accused until further orders from the Court. 13 In a decision of October
25, 1979 the Court of Appeals dismissed the petition and lifted the restraining order of January 23, 1979. 14 A
motion for reconsideration of said decision filed by the accused was denied in a resolution of February 19,
1980. 15

Hence this petition for review of said decision was filed by accused whereby petitioner prays that said decision
be reversed and set aside, respondent judge be perpetually enjoined from enforcing his threat to proceed with
the arraignment and trial of petitioner in said criminal case, declaring the information filed not valid and of no
legal force and effect, ordering respondent Judge to dismiss the said case, and declaring the obligation of
petitioner as purely civil. 16

In a resolution of May 19, 1980, the Second Division of this Court without giving due course to the petition
required the respondents to comment to the petition, not to file a motiod to dismiss, within ten (10) days from
notice. In the comment filed by the Solicitor General he recommends that the petition be given due course, it
being meritorious. Private respondent through counsel filed his reply to the comment and a separate conunent
to the petition asking that the petition be dismissed. In the resolution of February 5, 1981, the Second Division
of this Court resolved to transfer this case to the Court En Banc. In the resolution of February 26, 1981, the
Court En Banc resolved to give due course to the petition.

Petitioner and private respondent filed their respective briefs while the Solicitor General filed a Manifestation in
lieu of brief reiterating that the decision of the respondent Court of Appeals be reversed and that respondent
Judge be ordered to dismiss the information.

It is a cardinal principle that an criminal actions either commenced by complaint or by information shall be
prosecuted under the direction and control of the fiscal. 17 The institution of a criminal action depends upon the
sound discretion of the fiscal. He may or may not file the complaint or information, follow or not fonow that
presented by the offended party, according to whether the evidence in his opinion, is sufficient or not to establish
the guilt of the accused beyond reasonable doubt. 18 The reason for placing the criminal prosecution under the
direction and control of the fiscal is to prevent malicious or unfounded prosecution by private persons. 19 It cannot
be controlled by the complainant. 20 Prosecuting officers under the power vested in them by law, not only have
the authority but also the duty of prosecuting persons who, according to the evidence received from the
complainant, are shown to be guilty of a crime committed within the jurisdiction of their office. 21 They have
equally the legal duty not to prosecute when after an investigation they become convinced that the evidence
adduced is not sufficient to establish a prima facie case. 22

It is through the conduct of a preliminary investigation 23 that the fiscal determines the existence of a puma facie
case that would warrant the prosecution of a case. The Courts cannot interfere with the fiscal's discretion and
control of the criminal prosecution. It is not prudent or even permissible for a Court to compel the fiscal to
prosecute a proceeding originally initiated by him on an information, if he finds that the evidence relied upon by
him is insufficient for conviction. 24 Neither has the Court any power to order the fiscal to prosecute or file an
information within a certain period of time, since this would interfere with the fiscal's discretion and control of
criminal prosecutions. 25 Thus, a fiscal who asks for the dismissal of the case for insufficiency of evidence has
authority to do so, and Courts that grant the same commit no error. 26 The fiscal may re-investigate a case and
subsequently move for the dismissal should the re-investigation show either that the defendant is innocent or
that his guilt may not be established beyond reasonable doubt. 27 In a clash of views between the judge who did
not investigate and the fiscal who did, or between the fiscal and the offended party or the defendant, those of
the Fiscal's should normally prevail. 28 On the other hand, neither an injunction, preliminary or final nor a writ of
prohibition may be issued by the courts to restrain a criminal prosecution 29 except in the extreme case where it
is necessary for the Courts to do so for the orderly administration of justice or to prevent the use of the strong
arm of the law in an op pressive and vindictive manner. 30

However, the action of the fiscal or prosecutor is not without any limitation or control. The same is subject to the
approval of the provincial or city fiscal or the chief state prosecutor as the case maybe and it maybe elevated for
review to the Secretary of Justice who has the power to affirm, modify or reverse the action or opinion of the
fiscal. Consequently the Secretary of Justice may direct that a motion to dismiss the rase be filed in Court or
otherwise, that an information be filed in Court. 31

The filing of a complaint or information in Court initiates a criminal action. The Court thereby acquires jurisdiction
over the case, which is the authority to hear and determine the case. 32 When after the filing of the complaint or
information a warrant for the arrest of the accused is issued by the trial court and the accused either voluntarily
submited himself to the Court or was duly arrested, the Court thereby acquired jurisdiction over the person of
the accused. 33

The preliminary investigation conducted by the fiscal for the purpose of determining whether a prima facie case
exists warranting the prosecution of the accused is terminated upon the filing of the information in the proper
court. In turn, as above stated, the filing of said information sets in motion the criminal action against the accused
in Court. Should the fiscal find it proper to conduct a reinvestigation of the case, at such stage, the permission
of the Court must be secured. After such reinvestigation the finding and recommendations of the fiscal should
be submitted to the Court for appropriate action. 34 While it is true that the fiscal has the quasi judicial discretion
to determine whether or not a criminal case should be filed in court or not, once the case had already been
brought to Court whatever disposition the fiscal may feel should be proper in the rase thereafter should be
addressed for the consideration of the Court, 35 The only qualification is that the action of the Court must not
impair the substantial rights of the accused. 36 or the right of the People to due process of law. 36a

Whether the accused had been arraigned or not and whether it was due to a reinvestigation by the fiscal or a
review by the Secretary of Justice whereby a motion to dismiss was submitted to the Court, the Court in the
exercise of its discretion may grant the motion or deny it and require that the trial on the merits proceed for the
proper determination of the case.

However, one may ask, if the trial court refuses to grant the motion to dismiss filed by the fiscal upon the directive
of the Secretary of Justice will there not be a vacuum in the prosecution? A state prosecutor to handle the case
cannot possibly be designated by the Secretary of Justice who does not believe that there is a basis for
prosecution nor can the fiscal be expected to handle the prosecution of the case thereby defying the superior
order of the Secretary of Justice.

The answer is simple.1wphi1 The role of the fiscal or prosecutor as We all know is to see that justice is done
and not necessarily to secure the conviction of the person accused before the Courts. Thus, in spite of his opinion
to the contrary, it is the duty of the fiscal to proceed with the presentation of evidence of the prosecution to the
Court to enable the Court to arrive at its own independent judgment as to whether the accused should be
convicted or acquitted. The fiscal should not shirk from the responsibility of appearing for the People of the
Philippines even under such circumstances much less should he abandon the prosecution of the case leaving it
to the hands of a private prosecutor for then the entire proceedings will be null and void. 37 The least that the
fiscal should do is to continue to appear for the prosecution although he may turn over the presentation of the
evidence to the private prosecutor but still under his direction and control. 38

The rule therefore in this jurisdiction is that once a complaint or information is filed in Court any disposition of the
case as its dismissal or the conviction or acquittal of the accused rests in the sound discretion of the Court.
Although the fiscal retains the direction and control of the prosecution of criminal cases even while the case is
already in Court he cannot impose his opinion on the trial court. The Court is the best and sole judge on what to
do with the case before it. The determination of the case is within its exclusive jurisdiction and competence. A
motion to dismiss the case filed by the fiscal should be addressed to the Court who has the option to grant or
deny the same. It does not matter if this is done before or after the arraignment of the accused or that the motion
was filed after a reinvestigation or upon instructions of the Secretary of Justice who reviewed the records of the
investigation.

In order therefor to avoid such a situation whereby the opinion of the Secretary of Justice who reviewed the
action of the fiscal may be disregarded by the trial court, the Secretary of Justice should, as far as practicable,
refrain from entertaining a petition for review or appeal from the action of the fiscal, when the complaint or
information has already been filed in Court. The matter should be left entirely for the determination of the Court.

WHEREFORE, the petition is DISMISSED for lack of merit without pronouncement as to costs.

SO ORDERED.

Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Padilla, Bidin, Sarmiento and
Cortes, JJ., concur.
Teehankee C.J., took no part.