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INTERNATIONAL HARDWOOD Bureau of Forestry over it were likewise terminated. BIR also lost
authority to measure the timber cut from the subject area and to
AND VENEER COMPANY OF THE collect forestry charges and other fees thereon because of this full
transfer.
4. Impose any other duty or burden upon the latter in that 4.UP is duty bound to operate and maintain a central
portion of its concession covered by a License Agreement, experiment station
ceded in full ownership to UP by RA 3990 5. Supervision of the License Agreement in favor of
Hardwood by UP was intended by RA 3990
Hardwood also prayed for an injunction and P100,000 in 6. BIR and the Bureau Of Forestry issued specific rulings
damages. recognizing the authority of UP to collect royalties and
charges
UP filed its Answer: B. Hardwood contends:
1. Interposed affirmative defenses of improper venue and that the 1. UP has not been granted by RA 3990 the authority to
petition states no cause of action collect forest charges or the authority to supervise the
2. Set up counterclaim for payment of forest charges on the forest operation of the timber concession
products cut and felled within the area ceded to UP under RA 2. Cession of the land was expressly made subject to any
3990 concession, if any
3. Rulings of BIR and Bureau of Forestry are incorrect
CFI DECISION: CFI rendered judgment in favor of Hardwood: 4. It has acquired vested right to operate the timber
1. RA 3990 does not empower UP to scale, measure, and seal the concession under the supervision and control of the
timber cut by International Hardwood within the tract of land Bureau of Forestry
and collect the corresponding charges prescribed by NIRC
2. Dismissed UPs counterclaim II. Discussion on the effect of the laws
A. The laws:
CA DECISION: Elevated the case to the SC as the case involves purely 1. Under Proc. 791 a parcel of land of the public domain
legal questions. was withdrawn from sale or settlement and was
reserved for the UP College of Agriculture as
ISSUE: WON UP as owner had the right to scale, measure, and seal the experiment station, subject to private rights, if any
timber cut by Hardwood and collect forestry charges thereon. 2. Under RA 3990 the very same lot referred to in Proc.
791 was ceded fully to UP, subject to any existing
HELD: YES, by virtue of the full cession of ownership to UP. concessions, if any
B. Effect of the laws on the concession of Hardwood:
I. Arguments of the Parties 1. When RA 3990 ceded the property to UP, the
A. UP asserts that: Philippines completely removed it from the public
1. Under RA 3990, the Philippines may effect collection of domain and segregated the areas covered by the
forest charges through UP because the License timber license from the public forest
Agreement does not expressly provide that they be 2. The Philippines relinquished and conveyed its rights
paid to the BIR over the area to UP
2. UP is vested with administrative jurisdiction over and a. Thus, UP became the owner of the land, subject
has ownership over the land in question. Thus, it only to existing concession
acquired full control and benefit of the timber and 3. Since there is an express proviso on existing
other resources in the area concessions, this means that the right of Hardwood as
3. UP is entitled to the income derived from the tract of a timber licensee must not be affected, impaired, or
land ceded to it by RA 3990 diminished; it must be respected
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CASE DIGESTS
III. As owner, UP has the right to enjoy and dispose of the thing
without other limitations than those established by law. In this
case, that exception is made for Hardwood as licensee or
grantee of the concession, which has been given the license to
cut, collect, and remove timber from the area ceded and
transferred to UP until February 1985.
A. However, Hardwood has the correlative duty and
obligation to pay the forest charges or royalties to the new
owner, UP
B. Thus, the charges should not be paid to the Government
but to UP.
C. It follows then that respondent UP is entitled to supervise,
through its duly appointed personnel, the logging, felling
and removal of timber within the area covered by R.A. No.
3990