Title
Greenhills Mining Co. vs. Office of the President
Case
G.R. No. 75962
Decision Date
Jun 30, 1988
Greenhills' mining claims in Southern Zambales were invalidated due to abandonment, reverting the area to public domain. Green Valley's exploration permit was upheld, granting it superior rights over the disputed land within the forest reserve.
mining claims
nullification
preferential rights
A

Case Summary (G.R. No. 75962)

Factual Background

The case arose from a conflict between Greenhills’ mining claims and Green Valley’s exploration permit over areas that lay within the Southern Zambales Forest Reserve and within the same mineral land. Mining claims held by different claimowners were originally located and registered in 1933 and 1934 under the Philippine Bill of 1902. The mining claims later lapsed because the claimowners failed to pursue the claims and to perform the required annual assessment works, and they were treated as abandoned.

After the establishment of the reservation, President Ramon Magsaysay issued Proclamation No. 245 on January 18, 1956, establishing the Southern Zambales Forest Reserve with an area of 37,000 hectares over the municipalities of San Marcelino and Castillejos, for soil protection, timber production, and other forest purposes, while expressly remaining subject to existing private rights. In 1970 and 1971, Greenhills relocated the previously abandoned mining claims inside the reservation. It executed certificates or declarations of location (DOL) covering 113 claims and registered them with the Mining Recorder in Iba, Zambales. It then filed Lode Lease Applications (LLAs) on these claims with the Bureau of Mines. Boundary survey plans were submitted and approved by the Mines Director on October 27, 1971; the lease applications and related materials were published in the Official Gazette and in newspapers of general circulation.

Green Valley, on the other hand, obtained permissions from the Bureau of Forest Development (BFD) and the Bureau of Mines and Geo-Sciences (BMGS). On September 5, 1975, it filed an application for a prospecting permit (Prospecting Permit No. 354-03079) over 1,296 hectares within the reservation. The BFD Director granted the permit on January 5, 1978 to expire on June 5, 1978. On March 1, 1979, Green Valley applied for a prospecting permit over 4,800 hectares within the reservation. The BFD granted Prospecting Permit No. 349-03179, initially expiring on August 31, 1979, and later extended it to January 31, 1980.

Subsequently, on July 19, 1979, Green Valley applied with BMGS for an exploration permit over the area covered by its prospecting permit and over additional areas covered by prospecting permits issued to other persons (Concepcion Lomotan, Dolores Montilla, and Asuncion Caguios). The application was referred to the BMGS Mineral Lands and Topographic Survey Division (MLTSD). Based on verification, the MLTSD submitted reports dated August 17, 1979 and October 4, 1979 finding that Green Valley’s applied areas conflicted with Greenhills’ claims. In a further report dated September 10, 1979, the BMGS Mineral Resources Administrative Division commented that Green Valley’s exploration permit may be given due course, reasoning that mining claims in areas within the reserve were null and void pursuant to Section 28(a), Commonwealth Act No. 137.

Despite Greenhills’ protested interest, Green Valley’s exploration permits were approved. On October 16, 1979 and November 29, 1979, respectively, Green Valley’s exploration permits (Exploration Permit Nos. 79 and 80) covering 5,208.96 hectares were approved. In response, Greenhills filed protests with both the BFD and BMGS seeking cancellation of Green Valley’s prospecting and exploration permits. Green Valley countered that the protests had become moot because Greenhills’ alleged prospecting permit basis had long expired when Green Valley applied and when the later prospecting permit was issued. It further argued that the BFD was no longer the proper forum and that validity of mining claims should be litigated in the proper forum.

Administrative and Jurisdictional Developments

As supporting materials to its protests, Greenhills relied on letters from Lepanto Consolidated Mining Co., which operated on Greenhills’ claims and asserted that Greenhills’ areas were excluded from Green Valley’s permits. Lepanto’s position rested on three main points: first, that Greenhills’ areas were previously covered by patentable mining claims validly located and registered in 1933 and 1934 by different claimowners under the Philippine Bill of 1902; second, that under the Supreme Court ruling in McDaniel v. Apacible, reservation of public lands could not include prior perfected mining locations; and third, that Greenhills’ mining claims had been surveyed, that survey plans were approved, and that lease applications were published in 1971 and 1973.

In the course of the administrative proceedings, on June 5, 1981, the Director of the BFD issued an order directing amendment of Green Valley’s prospecting permit to exclude areas covered by previously located and registered patentable mining claims as shown in a sketch plan issued by the BMGS. Greenhills reiterated its request to exclude the disputed areas by letter dated June 9, 1981 addressed to the BMGS.

On June 11, 1981, the Director of the Bureau of Mines issued an order amending Exploration Permit No. 79, expressly stating that the permit should exclude the area covered by previously located and registered patentable mining claims appearing in the sketch plan that was made integral to the order. Green Valley appealed to the Ministry of Natural Resources (MNR). On July 23, 1981, the MNR held that because the case required determination of the mining rights of the parties over the disputed area, the matter fell within the original jurisdiction of the Bureau of Mines and Geo-Sciences. The MNR set aside both the BFD’s June 5, 1981 order and the BMGS Director’s June 11, 1981 order.

Green Valley then elevated the matter to the Office of the President, attacking MNR’s refusal to rule on the validity of Greenhills’ mining claims. The Office of the President rendered the decision in question on July 6, 1986. It affirmed MNR’s July 23, 1981 ruling, and it further declared that all mining claims within the Southern Zambales Forest Reserve located and registered by Greenhills in violation of Section 28(a) of C.A. No. 137 were null and void. It likewise granted Green Valley a preferential right to possess, exploit, explore, develop, and operate the areas within the reservation covered by Green Valley’s exploration permit issued on October 16, 1979 (Exploration Permit No. 79). Greenhills’ motion for reconsideration was denied on September 10, 1986.

After that denial, Greenhills filed the petition for review. During the pendency of the petition, the Court issued a temporary restraining order on November 12, 1986, enjoining the Director of BMGS from acting on the renewal of Green Valley’s exploration permit covering the areas involved.

Issues and Contentions of the Parties

Greenhills maintained that its mining claims were valid and that the administrative and presidential rulings declaring its claims null and void were erroneous. It argued, among other things, that mining claims located under the Philippine Bill of 1902 that had later been abandoned or forfeited could be the subject of relocation by another person. It also contended that the reservation of public lands under Proclamation No. 245 could not be deemed to include areas previously covered by a valid mining location. In support of its position that the areas should have been excluded from Green Valley’s exploration permit, Greenhills asserted that BMGS correctly based its plot on certified declarations of location filed in 1933 and 1934. It further claimed that it had valid claims because it was the relocator of the earlier patentable mining claims.

Greenhills also raised procedural and constitutional arguments. It alleged that questions concerning the validity of Greenhills’ mining claims were barred by statute. It further argued that an “Exploration Agreement with assignable Option to Purchase” between Green Valley Company and Gold Fields Asia Limited violated Section 9, Article XIV of the 1973 Constitution, because the agreement allegedly was not a “service contract” within the contemplated scope of that constitutional provision. Greenhills prayed for preliminary injunctive relief to restrain BMGS from acting on renewal of Green Valley’s exploration permit.

The respondents relied on the presidential ruling’s legal foundation: Section 28(a) of Commonwealth Act No. 137 (as later reflected in Section 13(a), Presidential Decree No. 463), together with the regulations implementing it, which required that the lessor first secure a prospecting permit from the BFD and then obtain an exploration permit if minerals were discovered or there was strong proof of mineralization. They emphasized that Greenhills’ claims were not supported by a prospecting permit, while Green Valley’s permits complied with the required sequence. They also relied on administrative factual determinations and on the principle that the Office of the President’s decisions are entitled to respect absent showing of fraud, collusion, arbitrariness, illegality, imposition, mistake, or total absence of substantial evidence.

The Parties’ Administrative Findings and the Court’s Review Framework

The decision recognized the established doctrine that, where there was no showing of fraud, collusion, arbitrariness, illegality, imposition, mistake on the part of the Office of the President or the department head in rendering the questioned decision, or a total lack of substantial evidence to support it, the administrative action deserved great weight and respect and would not be interfered with by the courts.

Applying this framework, the Court addressed the substantive reliance of the Office of the President on Section 28(a), Commonwealth Act No. 137. The Court noted that under the statutory scheme and implementing regulations, a proper concession or permit process required securing a prospecting permit and then an exploration permit under specified conditions. The Court then stated that the records showed Greenhills’ mining claims were supported by no prospecting permit, wherea

...continue reading

Analyze Cases Smarter, Faster
Jur helps you analyze cases smarter to comprehend faster, building context before diving into full texts. AI-powered analysis, always verify critical details.

About Privacy Terms