Case Summary (G.R. No. 109902)
Procedural Posture
This is a Petition for Review under Rule 45 of the Rules of Court seeking nullification of the Court of Appeals’ affirmance of the trial court. The trial court declared the cancellation of QLP No. 33 void and maintained the respondents’ right to exploit the marble deposits; the Court of Appeals affirmed that decision. The Supreme Court granted the petition, set aside the Court of Appeals decision, and disposed the matter as stated below.
Factual Background
The four individual respondents, after prospecting, discovered marble deposits in Mount Mabio and applied with the Bureau of Mines (now Mines and Geosciences Bureau) for exploitation rights. Following compliance with requirements, License No. 33 (QLP No. 33) was issued on August 3, 1982 in the name of Rosemoor Mining and Development Corporation for 330.3062 hectares. In 1986, then-Minister Ernesto R. Maceda informed respondents by letter that the license had been cancelled because it allegedly violated Section 69 of Presidential Decree No. 463 (PD 463). The dispute led to litigation; preliminary injunctive relief was granted in 1992, and the trial court rendered judgment in 1996. The DENR and associated officials sought review.
Trial Court Disposition
The trial court ruled that the cancellation of License No. 33 was without jurisdiction and violated petitioners’ constitutional right against deprivation of property without due process. The court ordered reinstatement of respondents’ right to exploit the marble for the remaining term of the license, made preliminary injunctive writs permanent, cancelled the petitioners’ bond, allowed an accounting of damages, and denied contempt motions.
Court of Appeals Ruling
The Court of Appeals affirmed the trial court in toto. It concluded that the grant of a quarry license covering 330.3062 hectares was authorized because the area was embraced by four separate applications of 81 hectares each; it read PD 463’s 100-hectare-per-province limit as supplanted by later law (RA 7942) and held that cancellation without notice and hearing deprived respondents of property without due process. It also invoked the constitutional non-impairment clause to protect the license.
Issues Presented
The principal issues presented to the Supreme Court were: (1) whether QLP No. 33 was issued in blatant contravention of Section 69 of PD 463 (the 100-hectare-per-province maximum) and therefore void; and (2) whether Proclamation No. 84, issued by President Corazon Aquino restoring the lands to the national park and declaring QLP No. 33 a patent nullity, was valid and whether the ex post facto prohibition applied.
Applicable Constitutional and Statutory Law (1987 Constitution basis)
Because the decision is from 2004, the Court applied the 1987 Constitution. Relevant provisions and statutes invoked include: Section 2, Article XII, 1987 Constitution (State ownership and full control and supervision of natural resources); PD 463 (Mineral Resources Development Decree of 1974) and its Section 69 (maximum quarry license area per province); the Mining Act of 1995 (RA 7942) and its provisions preserving valid and existing rights (Sections 5, 7, 18, 19, 112, 113 and definitions); the doctrine of jura regalia recognizing State ownership of natural resources; and prior jurisprudence on the nature of permits and licenses (Timber and mining jurisprudence such as Tan, Ysmael, Southeast Mindanao Gold Mining Corporation and Miners Association of the Philippines v. Factoran Jr.).
Supreme Court’s Conclusion on License Validity
The Supreme Court held that a license that contravenes a mandatory statutory provision under which it was granted is void ab initio. Section 69 of PD 463 unambiguously provides that a quarry license shall cover an area of not more than 100 hectares in any one province; the provision is categorical and mandatory, using the word “shall” and containing no exceptions based on the number of applications. QLP No. 33, being a single license in the name of Rosemoor covering 330.3062 hectares, plainly exceeded the statutory maximum. The lower courts’ reasoning — that the aggregate area was permissible because covered by four separate 81-hectare applications — ignored the corporate form (the license issued to the corporation, not to four individuals) and would subvert the statute’s clear purpose to limit quarry areas. Therefore, the license was issued in violation of PD 463 and was void.
Relationship of PD 463, RA 7942 and Effect on Mootness
Although parts of PD 463 were declared inconsistent with the 1987 Constitution in prior cases and RA 7942 later embodied the new constitutional policy, the Court explained that the question whether QLP No. 33 constituted a “valid and existing” right under RA 7942 remained material. RA 7942 preserves “valid and existing” mining/quarrying rights, but whether a purported license that contravened a mandatory provision of PD 463 was a valid existing right required resolution. Consequently, the petition was not moot and the Court proceeded to adjudicate the merits.
Nature of Licenses, Police Power and Revocation
The Court reaffirmed established jurisprudence that exploration and exploitation permits and similar licenses are privileges granted by the State and do not vest permanent property rights protected under the due process or non-impairment clauses in the same manner as private contracts. Such privileges may be amended, modified or rescinded when the national interest so requires, under the State’s police power and regalian ownership of natural resources. QLP No. 33 itself contained an express clause permitting revocation when public interest so required or upon noncompliance. The exercise of executive discretion in determining public interest — including departmental control by the Minister and Presidential action — is afforded deference by courts unless there is a clear showing of grave abuse of discretion.
Validity of Proclamation No. 84; Ex Post Facto and Bill of Attainder Arguments
The Court sustained Proclamation No. 84, which restored the area to the Biak-na-Bato national park and declared the award under Proclamation No. 2204 (QLP No. 33) a patent violation of PD 463. The Court found Proclamation No. 84 was not a bill of attainder because it did not inflict punishment without trial; declaring the license void was not a punitive act. It rejected the contention
Case Syllabus (G.R. No. 109902)
Case Citation and Procedural Posture
- G.R. No. 149927; Decision dated March 30, 2004; reported at 470 Phil. 363; First Division.
- This is a Petition for Review under Rule 45 seeking to nullify:
- The May 29, 2001 Decision of the Court of Appeals in CA-G.R. SP No. 46878 (which affirmed the trial court in toto), and
- The September 6, 2001 Resolution of the Court of Appeals (which denied petitioners’ Motion for Reconsideration).
- The trial court (Regional Trial Court) rendered its decision on September 27, 1996; the CA affirmed that decision; the Supreme Court granted the petition and set aside the CA decision.
- The Supreme Court opinion was penned by Justice Panganiban (with Davide, Jr., C.J., Ynares‑Santiago, Carpio, and Azcuna, JJ. concurring).
Central Holding (Headnote)
- A mining license that contravenes a mandatory provision of the law under which it is granted is void.
- A license is a mere privilege that does not vest absolute rights in the holder; it may be revoked by the State in the public interest without violating due process or the non‑impairment clause of the Constitution.
Facts as Found by the Courts
- Four petitioners (Dr. Lourdes S. Pascual, Dr. Pedro De la Concha, Alejandro De La Concha, and Rufo De Guzman) obtained permission to prospect for marble deposits in the Biak‑na‑Bato mountain range and discovered high‑quality marble deposits in Mount Mabio.
- The petitioners applied to the Bureau of Mines (now the Mines and Geosciences Bureau) for the corresponding license to exploit the marble deposits; after compliance with requirements, License No. 33 (Quarry License/Permit No. 33, QLP No. 33) was issued.
- QLP No. 33, dated August 3, 1982, was issued in the name of Rosemoor Mining and Development Corporation, permitting extraction and disposal of marbleized limestone from a 330.3062‑hectare area in San Miguel, Bulacan, subject to PD 463 and its implementing rules and regulations; Proclamation No. 2204 awarded the right to Rosemoor but explicitly made the award subject to existing policies, laws, rules and regulations.
- After Ernesto R. Maceda was appointed DENR Minister, he wrote (letter dated September 15, 1986) informing respondents that QLP No. 33 had been illegally issued because it violated Section 69 of PD 463 and stating there was no longer public interest in its continuance; Proclamation No. 84 later declared the award to Rosemoor a patent violation of Section 69 and reverted the parcel excluded by Proclamation No. 2204 to the Biak‑na‑Bato national park.
- Petitioners filed an original and later amended petition to assail the cancellation; this Court granted injunctive relief on February 28, 1992, and the petitioners filed an injunction bond for P1,000,000.00. The RTC ruled in favor of respondents; the CA affirmed. The present Supreme Court review followed.
Issues Presented
- Whether QLP No. 33 was issued in blatant contravention of Section 69, Presidential Decree No. 463 (PD 463).
- Whether Proclamation No. 84 issued by then President Corazon Aquino is valid.
- The corollary issue: whether the constitutional prohibition against ex post facto laws applies to Proclamation No. 84.
Trial Court’s Ruling (as summarized)
- The trial court declared the cancellation of License No. 33 was done without jurisdiction and in gross violation of petitioners’ constitutional right against deprivation of property without due process; it set aside the cancellation.
- The trial court held that the privilege granted had ripened into a property right protected by due process.
- The court declared petitioners’ right to continue exploitation for the life of the license (25 years less 3 years of continuous operation before cancellation), made injunctive writs permanent, cancelled the bond, allowed evidence on damages, and denied motions for contempt.
- The RTC characterized Proclamation No. 84 as an ex post facto law (finding a constitutional violation under Section 3 of Article XVIII of the 1987 Constitution).
Court of Appeals’ Ruling (as summarized)
- The CA affirmed the RTC in toto.
- The CA held the grant of the quarry license covering 330.3062 hectares was authorized because the license was embraced by four separate applications (each for an area of 81 hectares).
- The CA held that the PD 463 limitation of 100 hectares per province was supplanted by Republic Act No. 7942 (the Mining Act of 1995), which increased the mining areas allowed under PD 463.
- The CA further held that cancellation of the license without notice and hearing was a deprivation of property without due process and that the license must be respected under the constitutional non‑impairment clause.
Petitioners’ Contentions on Review
- QLP No. 33 contravened Section 69 of PD 463 because it exceeded the maximum area that may be granted (100 hectares per province), rendering the license void ab initio.
- Proclamation No. 84 (and the executive action reverting excluded land to the national park) is valid and proper; the prohibition against ex post facto laws applies only to criminal matters, and in any event Proclamation No. 84 is not penal.
Respondents’ (License Holders’) Contentions on Review
- PD 463 had been repealed and/or superseded by RA 7942; therefore the petition is moot.
- The license was validly granted because it was covered by four separate applications for 81 hectares each.
- Cancellation without notice and hearing violated due process per Section 74 of PD 463.
- Proclamation No. 84 violated the non‑impairment clause, is an ex post facto law and/or bill of attainder, and was issued after the effectivity of the 1987 Constitution and thus invalid.
Governing Statutory and Constitutional Provisions Relied On
- PD 463 (Mineral Resources Development Decree of 1974),