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Lee Hong Kok vs David G.R. No. L-30389, Dec. 27, 1972

Distinction between IMPERIUM and DOMINIUM Only the government can question a void certificate of title issued pursuant to a government grant.

FACTS:

This is regarding a piece of land which Aniano David acquired lawful title thereto, pursuant to his miscellaneous sales application. After approval of his application, the Director of Lands issued an order of award and issuance of sales patent, covering said lot by virtue of which the Undersecretary of Agriculture and Natural Resources issued a Miscellaneous Sales Patent. The Register of Deeds then issued an original certificate of title to David.

During all this time, Lee Hong Kok did not oppose nor file any adverse claim.

ISSUE:

Whether or not Lee Hong Kok may question the government grant

HELD:

Only the Government, represented by the Director of Lands or the Secretary of Agriculture and Natural Resources, can bring an action to cancel a void certificate of title issued pursuant to a void patent. This was not done by said officers but by private parties like the plaintiffs, who cannot claim that the patent and title issued for the land involved are void since they are not the registered owners thereof nor had they been declared as owners in the cadastral proceedings after claiming it as their private property. (Torrens Title)

The fact that the grant was made by the government is undisputed. Whether the grant was in conformity with the law or not is a question which the government may raise, but until it is raised by the government and set aside, the defendant cannot question it. The legality of the grant is a question between the grantee and the government.

IMPERIUM vs. DOMINIUM:

The government authority possessed by the State which is appropriately embraced in the concept of sovereignty comes under the heading of imperium; its capacity to own or acquire property under dominium. The use of this term is appropriate with reference to lands held by the State in its proprietary character. In such capacity, it may provide for the exploitation and use of lands and other natural resources, including their disposition, except as limited by the Constitution.

Oh Cho vs Director of Lands G.R. No. 48321, August 31, 1946

GR: All lands are acquired from the Government, either by purchase or by grant. EXCEPTION: Lands under private ownership since time immemorial. Application for decree of registration is a condition precedent to acquisition of title. Non-compliance gives rise to mere possessory right. An alien cannot acquire title to lands of the public domain by prescription.

FACTS:

Oh Cho, a Chinese citizen, purchased from the Lagdameos a parcel of land in Tayabas, which they openly, continuously and adversely possessed since 1880. On January 17, 1940, Oh Cho applied for registration of this land. The Solicitor General opposed on the ground that Oh Cho lacked title to said land and also because he was an alien.

ISSUEs:

Whether or not Oh Cho had title Whether or not Oh Cho is entitled to a decree of registration

HELD:

Oh Cho failed to show that he has title to the lot, which may be confirmed under the Land Registration Act.

All lands that were not acquired from the Government, either by purchase or by grant, belong to the public domain. An exception to the rule would be any land that should have been in the possession of an occupant and of his predecessors in interest since time immemorial, for such possession would justify the presumption that the land had never been part of the public domain or that it had been a private property even before the Spanish conquest.

The applicant does not come under the exception, for the earliest possession of the lot by his first predecessor in interest began in 1880.

Under the Public Land Act, Oh Cho is not entitled to a decree of registration of the lot, because he is an alien disqualified from acquiring lands of the public domain.

Oh Cho's predecessors in interest would have been entitled to a decree of registration had they applied for the same. The application for the registration of the land was a condition precedent, which was not complied with by the Lagdameos. Hence, the most they had was mere possessory right, not title. This possessory right was what was transferred to Oh Cho, but since the latter is an alien, the possessory right could never ripen to ownership by prescription. As an alien, Oh Cho is disqualified from acquiring title over public land by prescription.

Cruz vs secretary of department of environment and natural resources Land Titles and Deeds – IPRA Law vis a vis Regalian Doctrine Cruz, a noted constitutionalist, assailed the validity of the RA 8371 or the Indigenous People’s Rights Act on the ground that the law amount to an unlawful deprivation of the State’s ownership over lands of the public domain as well as minerals and other natural resources therein, in violation of the regalian doctrine embodied in Section 2, Article XII of the Constitution. The IPRA law basically enumerates the rights of the indigenous peoples over ancestral domains which may include natural resources. Cruz et al contend that, by providing for an all-encompassing definition of “ancestral domains” and “ancestral lands” which might even include private lands found within said areas, Sections 3(a) and 3(b) of said law violate the rights of private landowners.

ISSUE: Whether or not the IPRA law is unconstitutional.

HELD: The SC deliberated upon the matter. After deliberation they voted and reached a 7-7 vote. They deliberated again and the same result transpired. Since there was no majority vote, Cruz’s petition was dismissed and the IPRA law was sustained. Hence, ancestral domains may include public domain – somehow against the regalian doctrine

SANTA ROSA MINING COMPANY, INC., petitioner, vs. HON. MINISTER OF NATURAL RESOURCES JOSE J. LEIDO, JR. AND DIRECTOR OF MINES JUANITO C. FERNANDEZ, respondents. FACTS: Petitioner is a mining corporation duly organized and existing under the laws of the Philippines. It alleges that it is the holder of fifty (50) valid mining claims situated in Jose Panganiban, Camarines Norte, acquired under the provisions of the Act of the U.S. Congress dated 1 July 1902 (Philippine Bill of 1902). On 14 October 1977, Presidential Decree No. 1214 was issued, requiring holders of subsisting and valid patentable mining claims located under the provisions of the Philippine Bill of 1902 to file a mining lease application within one (1) year from the approval of the Decree. Petitioner accordingly filed a mining lease application, but "under protest," on 13 October 1978, with a reservation annotated on the back of its application that it is not waiving its rights over its mining claims until the validity of Presidential Decree No. 1214 shall have been passed upon by this Court.

ISSUE: Is Presidential Decree No. 1214 unconstitutional?

Ruling:

Presidential Decree No. 1214 is not unconstitutional. It is a valid exercise of the sovereign power of the State, as owner, over lands of the public domain, of which petitioner's mining claims still form a part, and over the patrimony of the nation, of which mineral deposits are a valuable asset. It may be underscored, in this connection, that the Decree does not cover all mining claims located under the Phil. Bill of 1902, but only those claims over which their locators had failed to obtain a patent. And even then, such locators may still avail of the renewable twenty-five year (25) lease prescribed by Pres. Decree No. 463, the Mineral Development Resources Decree of 1974. Constitutional mandate of PD 1214 is found in Sec. 2, Art. XII of the 1987 Constitution, which declares: "All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State....

smc vs ca digest Law on Natural Resources, Tax Declaration and Receipts

FACTS: This is a petition for review on certiorari where petitioner San Miguel Corporation who purchased Lot 684 from Silverio Perez, seeks the reversal of the decision of the Court of Appeals denying its application for registration of the said land in view of its failure to show entitlement thereto.

The Solicitor General opposed and appealed the application contending that the land in question is part of public domain and that petitioner being a private corporation is disqualified from holding alienable lands of the public domain. In this case, petitioner claims that its predecessor-in-interest had open, exclusive and undisputed possession of the land in question based on documentary evidence of tax declarations and receipts, and testimonial evidence of vendor Silverio Perez.

ISSUE: Whether or not the evidence presented by the petitioner is sufficient to warrant a ruling that petitioner and/or its predecessor-in-interest has a registrable right over Lot 684.

HELD: No, documentary evidence of tax declarations and receipts are not conclusive evidence of ownership or right of possession over a piece of land but mere indicia of a claim of ownership. They only become strong evidence of ownership of land acquired by prescription when accompanied by proof of actual possession. Also, the testimony of vendor Silverio Perez as proof of actual possession is weak and was not corroborated by other witnesses.

CHAVEZ vs PEA, (G.R. No. 133250, November 11, 2003) FACTS: This petition asked the Court to legitimize a government contract that conveyed to a private entity 157.84 hectares of reclaimed public lands along Roxas Boulevard in Metro Manila at the negotiated price of P1,200 per square meter. However, published reports place the market price of land near that area at that time at a high of P90,000 per square meter. The difference in price is a staggering P140.16 billion, equivalent to the budget of the entire Judiciary for seventeen years and more than three times the Marcos Swiss deposits that this Court forfeited in favor of the government. Public Estates Authority (PEA), under the JVA, obligated itself to convey title and possession over the Property, consisting of approximately One Million Five Hundred Seventy Eight Thousand Four Hundred Forty One (1,578,441) Square Meters for a total consideration of One Billion Eight Hundred Ninety Four Million One Hundred Twenty Nine Thousand Two Hundred (P1,894,129,200.00) Pesos, or a price of One Thousand Two Hundred (P1,200.00) Pesos per square meter.

ISSUE: Whether or not stipulations in the Amended Joint Venture Agreement for the transfer to AMARI of lands, reclaimed or to be reclaimed on portions of Manila Bay, violate the Constitution?

RULING: Submerged lands, like the waters (sea or bay) above them, are part of the State’s inalienable natural resources. Submerged lands are property of public dominion, absolutely inalienable and outside the commerce of man. This is also true with respect to foreshore lands. Any sale of submerged or foreshore lands is void being contrary to the Constitution as it violates Section 2, Article XII. In the instant case, the bulk of the lands subject of the Amended JVA are still submerged lands even to this very day, and therefore inalienable and outside the commerce of man. Of the 750 hectares subject of the Amended JVA, 592.15 hectares or 78% of the total area are still submerged, permanently under the waters of Manila Bay. Under the Amended JVA, the PEA conveyed to Amari the submerged lands even before their actual reclamation, although the documentation of the deed of transfer and issuance of the certificates of title would be made only after actual reclamation. This Resolution does not prejudice any innocent third party purchaser of the reclaimed lands covered by the Amended JVA. Neither the PEA nor Amari has sold any portion of the reclaimed lands to third parties. Title to the reclaimed lands remains with the PEA. As held in the 9 July 2002 Decision, the Amended JVA "violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution.

Laurel vs Garcia GR 92013 July 25, 1990.

Facts:

Petitioners seek to stop the Philippine Government to sell the Roppongi Property, which is located in Japan. It is one of the properties given by the Japanese Government as reparations for damage done by the latter to the former during the war.

Petitioner argues that under Philippine Law, the subject property is property of public dominion. As such, it is outside the commerce of men. Therefore, it cannot be alienated.

Respondents aver that Japanese Law, and not Philippine Law, shall apply to the case because the property is located in Japan. They posit that the principle of lex situs applies.

Issues and Held:

1. WON the subject property cannot be alienated.

The answer is in the affirmative.

Under Philippine Law, there can be no doubt that it is of public dominion unless it is convincingly shown that the property has become patrimonial. This, the respondents have failed to do. As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot be alienated.

2. WON Philippine Law applies to the case at bar.

The answer is in the affirmative.

We see no reason why a conflict of law rule should apply when no conflict of law situation exists. A conflict of law situation arises only when: (1) There is a dispute over the title or ownership of an immovable, such that the capacity to take and transfer immovables, the formalities of conveyance, the essential validity and effect of the transfer, or the interpretation and effect of a conveyance, are to be determined; and (2) A foreign law on land ownership and its conveyance is asserted to conflict with a domestic law on the same matters. Hence, the need to determine which law should apply.

In the instant case, none of the above elements exists.

The issues are not concerned with validity of ownership or title. There is no question that the property belongs to the Philippines. The issue is the authority of the respondent officials to validly dispose of property belonging to the State. And the validity of the procedures adopted to effect its sale. This is governed by Philippine Law. The rule of lex situs does not apply.

The assertion that the opinion of the Secretary of Justice sheds light on the relevance of the lex situs rule is misplaced. The opinion does not tackle the alienability of the real properties procured through reparations nor the existence in what body of the authority to sell them. In discussing who are capable of acquiring the lots, the Secretary merely explains that it is the foreign law which should determine who can acquire the properties so that the constitutional limitation on acquisition of lands of the public domain to Filipino citizens and entities wholly owned by Filipinos is inapplicable.

Miners Association of the Philippines v. Factoran G.R. No. 98332 January 16, 1995

Facts :

Former President Corazon Aquino issued Executive Order Nos 211 and 279 in the exercise of her legislative powers. EO No. 211 prescribes the interim procedures in the processing and approval of applications for the exploration, development and utilization of minerals pursuant to Section 2, Article XII of the 1987 Constitution. EO No. 279 authorizes the DENR Secretary to negotiate and conclude joint-venture, co-production, or production- sharing agreements for the exploration, development, and utilization of mineral resources.

The issuance and the impeding implementation by the DENR of Administrative Order Nos. 57 which declares that all existing mining leases or agreements which were granted after the effectivity of the 1987 Constitution…shall be converted into production-sharing agreements within one (1) year from the effectivity of these guidelines.” and Administrative Order No. 82 which provides that a failure to submit Letter of Intent and Mineral Production-Sharing Agreement within 2 years from the effectivity of the Department Administrative Order No. 57 shall cause the abandonment of the mining, quarry, and sand and gravel claims, after their respective effectivity dates compelled the Miners Association of the Philippines, Inc., an organization composed of mining prospectors and claim owners and claim holders, to file the instant petition assailing their validity and constitutionality before this Court.

Issue : Are the two Department Administrative Orders valid?

Ruling :

Yes. Petitioner's insistence on the application of Presidential Decree No. 463, as amended, as the governing law on the acceptance and approval of declarations of location and all other kinds of applications for the exploration, development, and utilization of mineral resources pursuant to Executive Order No. 211, is erroneous. Presidential Decree No. 463, as amended, pertains to the old system of exploration, development and utilization of natural resources through "license, concession or lease" which, however, has been disallowed by Article XII, Section 2 of the 1987 Constitution. By virtue of the said constitutional mandate and its implementing law, Executive Order No. 279 which superseded Executive Order No. 211, the provisions dealing on "license, concession or lease" of mineral resources under Presidential Decree No. 463, as amended, and other existing mining laws are deemed repealed and, therefore, ceased to operate as the governing law. In other words, in all other areas of administration and management of mineral lands, the provisions of Presidential Decree No. 463, as amended, and other existing mining laws, still govern. Section 7 of Executive Order No. 279 provides, thus: Sec. 7. All provisions of Presidential Decree No. 463, as amended, other existing mining laws, and their implementing rules and regulations, or parts thereof, which are not inconsistent with the provisions of this Executive Order, shall continue in force and effect.

Well -settled is the rule, however, that regardless of the reservation clause, mining leases or agreements granted by the State, such as those granted pursuant to Executive Order No. 211 referred to this petition, are subject to alterations through a reasonable exercise of the police power of the State. Accordingly, the State, in the exercise of its police power in this regard, may not be precluded by the constitutional restriction on non-impairment of contract from altering, modifying and amending the mining leases or agreements granted under Presidential Decree No. 463, as amended, pursuant to Executive Order No. 211. Police Power, being co-extensive with the necessities of the case and the demands of public interest; extends to all the vital public needs. The passage of Executive Order No. 279 which superseded Executive Order No. 211 provided legal basis for the DENR Secretary to carry into effect the mandate of Article XII, Section 2 of the 1987 Constitution.

WHEREFORE, the petition is DISMISSED for lack of merit.

Republic vs. Rosemoor Republic of the Philippines vs. Rosemoor Mining and Development Corporation, et al. G.R. No. 149927 March 30, 2004

Panganiban, J.:

Facts: Petitioner Rosemoor Mining and Development Corporation after having been granted permission to prospect for marble deposits in the mountains of Biak-na-Bato, San Miguel, Bulacan, succeeded in discovering marble deposits of high quality and in commercial quantities in Mount Mabio which forms part of the Biak-na-Bato mountain range.

The petitioner then applied with the Bureau of Mines, now Mines and Geosciences Bureau, for the issuance of the corresponding license to exploit said marble deposits.

License No. 33 was issued by the Bureau of Mines in favor of the herein petitioners. Shortly thereafter, Respondent Ernesto Maceda cancelled the petitioner’s license stating that their license had illegally been issued, because it violated Section 69 of PD 463; and that there was no more public interest served by the continued existence or renewal of the license. The latter reason was confirmed by the language of Proclamation No. 84. According to this law, public interest would be served by reverting the parcel of land that was excluded by Proclamation No. 2204 to the former status of that land as part of the Biak-na-Bato national park.

Issue: Whether or not Presidential Proclamation No. 84 is valid.

Held: Yes. We cannot sustain the argument that Proclamation No. 84 is a bill of attainder; that is, a legislative act which inflicts punishment without judicial trial.” Its declaration that QLP No. 33 is a patent nullity is certainly not a declaration of guilt. Neither is the cancellation of the license a punishment within the purview of the constitutional proscription against bills of attainder. Too, there is no merit in the argument that the proclamation is an ex post facto law. It is settled that an ex post facto law is limited in its scope only to matters criminal in nature. Proclamation 84, which merely restored the area excluded from the Biak-na-Bato national park by canceling respondents’ license, is clearly not penal in character.

Also at the time President Aquino issued Proclamation No. 84 on March 9, 1987, she was still validly exercising legislative powers under the Provisional Constitution of 1986. Section 1 of Article II of Proclamation No. 3, which promulgated the Provisional Constitution, granted her legislative power until a legislature is elected and convened under a new Constitution. The grant of such power is also explicitly recognized and provided for in Section 6 of Article XVII of the 1987 Constitution.

UTILIZATION OF NATURAL RESOURCES LA BUGAL B’LAAN TRIBAL V. DENR (INITIAL DECISION) FACTS: • Jul. 25, 1987: Pres. Aquino issued EO 279 authorizing the DENR Secretary to accept, consider and evaluate proposals from foreign-owned corporations for contracts involving either technical or financial assistance for large-scale exploration, development and utilization of minerals. The President may execute with the foreign proponent, upon recommendation of the Secretary. • Mar. 3, 1995: Pres. Ramos approved RA 7942 (Philippine Mining Act 1995) to govern the exploration, development, utilization, and processing of all mining resources. It took effect on Apr. 9, 1995. • Mar. 30, 1995: Pres. Ramos entered into a Financial and Technical Assistance Agreement (FTAA) with WMCP covering 99,387 hectares of land in S. Cotabato, Sultan Kudarat, Davao del Sur and N. Cotabato. • WMCP sold all its shares to Sagittarius Mines, Inc. (Sagittarius), a corporation organized under Philippine Laws with at least 60% of its equity owned by Filipinos and/or Filipino owned corporations. • By virtue of such sale and transfer, the DENR Secretary approved the transfer and registration of the FTAA from WMCP to Sagittarius. • This was protested by Lepanto Consolidated Co. It alleges that the case has not been rendered moot either by the transfer and registration of the FTAA to a Filipino-owned corporation. It alleges that the transfer did not cure the FTAA’s unconstitutionality. • Petitioners allege that RA 7942 allows fully foreign owned corporations to explore, develop, utilize and exploit mineral resources contrary to Sec. 2, Par. 4, Art. 12. o It allows foreign-owned companies to extend more than mere financial or technical assistance. It permits foreign owned companies to OPERATE AND MANAGE mining activities. o It allows foreign-owned companies to extend BOTH financial AND technical assistance instead of financial OR technical assistance. • In the 1987 Constitution, Sec. 2, Art. 12 sanctions the participation of foreign-owned corporations in the exploration, development and utilization of natural resources but imposes certain limitations: o First, the PARTIES to the FTAA: Only the PRESIDENT may enter into agreements and only with CORPORATIONS. In the 1973 Constitution, a FILIPINO CITIZEN, CORPORATION OR ASSOCIATION may enter into a SERVICE CONTRACT with a FOREIGN PERSON/ENTITY. o Second, the SIZE of the activities: Only LARGE-SCALE (very capital-intensive activities) exploration, development and utilization are now allowed. o Third, NATURAL RESOURCES subject of the activities: restricted to MINERALS, PETROLEUM and OTHER MINERAL OILS. This is to limit service contracts to areas where Filipino capital is insufficient. o Fourth, the agreements must be IN ACCORDANCE WITH THE TERMS AND CONDITIONS PROVIDED BY LAW. o Fifth, the agreement must be based on REAL CONTRIBUTIONS TO ECONOMIC GROWTH AND GENERAL WELFARE of the country. o Sixth, the agreement must contain rudimentary stipulations for the PROMOTION OF THE DEVELOPMENT AND USE OF LOCAL SCIENTIFIC AND TECHNICAL RESOURCES. o Seventh, the NOTIFICATION REQUIREMENT: the President shall notify the Congress of every FTAA entered into within 30 days from its execution. o Eighth, the SCOPE of the AGREEMENTS: AGREEMENTS involving financial or technical assistance. In the 1973 Constitution, it referred to SERVICE CONTRACTS for financial, technical, management or other forms of assistance. It bears noting that “service contracts” and “management or other forms of assistance” have been omitted. • There are 4 modes that the State, being the owner of natural resources, can conduct exploration, development and utilization: o State may DIRECTLY UNDERTAKE such activities. o State may enter into CO-PRODUCTION, JOINT VENTURE or PRODUCTION-SHARING AGREEMENTS with Filipino citizens or qualified corporations. o Congress, may by law, allows SMALL-SCALE utilization of natural resources by Filipino citizens. o For LARGE-SCALE exploration, development and utilization of minerals, petroleum and mineral oils, the President may enter into agreements with foreign-owned corporations involving financial or technical assistance. • For the 4th mode like in the case at bar, a legally-organized foreign-owned corporation (less than 50% of the capital is owned by Filipino citizens) is deemed a qualified person. • Large scale in RA 7942 is determined by the size of the contract area as opposed to the amount invested ($50 M) under EO 279. • Also, the collection of government share in an FTAA shall commence AFTER the FTAA Contractor has fully recovered its pre-operating expenses, exploration and development expenditures. ISSUE 1: W/N EO 279, the law in force when the WMC FTAA was executed, came into effect. HELD: YES. EO 279 became effective immediately upon its publication in the OG on August 3, 1987. RATIO: • While the effectivity clause of EO 279 does not require publication, it is not a ground for its invalidation since the Constitution, being the fundamental law of the land is deemed written in the law. Thus, the due process clause, stressed in Tañada v. Tuvera, is read into Section 8 of EO 279. • Pres. Aquino was still validly exercising legislative powers at the time the law was enacted. The convening of Congress has no effect upon the validity of the laws she had already passed. ISSUE 2: W/N RA 7942, the Philippine Mining Act is constitutional. HELD: NO. It is unconstitutional insofar as it authorizes service contracts. Although the statute employs the phrase “financial and technical agreements” in accordance with the 1987 Constitution, it actually treats these agreements as service contracts. It follows that the WMCP FTAA entered into under such Act is also unconstitutional. All provisions of the DENR AO 96-40 not in conformity with the Decision are also invalidated. RATIO: • Following the literal text of the Constitution, assistance accorded by foreign-owned corporations in the large-scale exploration, development, and utilization of petroleum, minerals and mineral oils should be limited to “technical” or “financial” assistance only. Contrary to this, the WMCP FTAA allows WMCP, a fully-foreign-owned mining corporation, to extend more than mere financial or technical assistance to the State, for it permits WMCP to manage and operate every aspect of the mining activity. o In Section 33, Chapter VI the underlying assumption is that the foreign contractor manages the mineral resources, just like the foreign contractor in a service contract. o Chapter XII grants foreign contractors in FTAAs the same auxiliary mining rights that it grants contractors in mineral agreements. o An FTAA contractor “has or has access to all the financing, managing, and technical expertise…”, suggesting that some management assistance is prescribed. o Section 1.3 of the WMCP FTAA grants WMCP “the exclusive right to explore, exploit, utilize, process and dispose of all Minerals products and by-products thereof that may be produced from the Contract Area.” o Under Section 1.2, WMCP shall provide all “financing, technology, management and personnel necessary for the Mining Operations”. o All in all, WMCP is granted beneficial ownership over natural resources that properly belong to the State and are intended for the benefit of the citizens. • Casus omisus pro omisso habendus est. The phrase “management or other forms of assistance” in the 1973 Constitution was deleted in the 1987 Constitution, which allows only “technical or financial assistance”. The omission was intentional and purposeful. • The phrase “service contracts” has likewise been deleted in the 1987 Constitution. This omission is indicative of a difference in purpose. The concept of “technical or financial assistance” agreements is not identical to that of “service contracts”. The drafters, as evidenced from their deliberations, intended to do away with service contracts which were used to circumvent the capitalization (60%-40%) requirement. It was intended to be a safeguard to prevent abuses. Service contracts are not allowed. • The CONCOM took into consideration the “Draft of the 1986 UP Law Constitutional Project” when it adopted the concept of “agreements…involving either technical or financial assistance”. o The UP Law draft proponents viewed service contracts under the 1973 Constitution as grants of beneficial ownership of the country’s natural resources to foreign owned corporations. While in theory, the State owns these natural resources – and Filipino citizens, their beneficiaries – service contracts actually vested foreigners with the right to dispose, explore for, develop, exploit, and utilize the same. This is clearly incompatible with the constitutional ideal of nationalization of natural resources, with the Regalian doctrine, and with Philippine sovereignty. o But the proponents still recognized the need for capital and technical know-how in the large-scale exploitation, development and utilization of natural resources. Thus, they proposed a compromise: “agreements…involving either technical or financial assistance”. This compromise is deemed to be more consistent with the State’s ownership of and its “full control and supervision” over such resources. • The constitutional provision allowing the President to enter into FTAAs with foreign-owned corporations is an exception to the general rule that participation in the nation’s natural resources is reserved exclusively to Filipinos. Such provision must be construed strictly against non-Filipinos. ISSUE: W/N the invalidation of the FTAA constitutes a breach of the treaty invoked by WMCP (Agreement on the Promotion and Protection of Investments between the Philippine and Australian Governments) HELD: NO. RATIO: • This decision forms part of the legal system of the country. The equal protection clause guarantees that such decision shall apply to all contracts belonging to the same class, hence, upholding rather than violating the “fair equitable treatment” stipulation is said treaty. NOTE: The Constitution limits the foreign agreements involving: (1) technical assistance, (2) financial assistance or (3) both. SEPARATE OPINIONS VITUG, J. – dissents • Does not share with the majority position that the adoption of the terms “agreements…involving either technical or financial assistance” in lieu of “service contracts reflects the intention to disallow the execution of service contracts with foreign entities. • Views RA 7942, its rules and regulations and the FTAA are constitutional. • The 1987 Constitution has indeed provided for safeguards but does not prevent service contracts per se. • The FTAA must be read in conformity with Section 2, Article XII of the Constitution. The rights to be exercised by the WMCP are for and in behalf of the State. PANGANIBAN, J. - dissents • The controversy is moot. The FTAA is now to be implemented by a Filipino corporation (either Lepanto or Saggitarius). The petition has become a virtual petition for declaratory relief, over which the SC has no original jurisdiction. • The drafters choice of words - “agreements…involving either technical or financial assistance” - does not absolutely indicate the intent to exclude other modes of assistance. The phrase signifies the possibility of the inclusion of other activities, provided they bear some reasonable relationship to and compatibility with financial or technical assistance. Had they intended for an absolute prohibition, they would have adopted language unmistakably restrictive and stringent. • Is of the view that the 1987 Constitution still allows for service contracts subject to several restrictions and modifications. • Invalidating RA 7942 and the FTAA could unnecessarily burden the recovery of the industry and the employment of opportunities it would likely generate. Prudent lending practices necessitate a certain degree of involvement in the borrower’s management process. Also, technical arrangements often necessarily include interface with the management process itself. • Is of the view that he CONCOM intended the Constitution to be flexible and adaptable. • Tañada v. Angara: There is a need to interpret the Constitution to cover “refreshing winds of change necessitated by unfolding events”. LA BUGAL B’LAAN TRIBAL ASSOCIATION vs. DENR (Reconsideration) BACKGROUND: 1. Petitioner filed the petition for Prohibition and Mandamus before the Court, which challenges the constitutionality of: a. The Philippine Mining Act of 1995 (R.A. 7942) b. Its Implementing Rules and Regulations (DENR Administrative Order No. or DOA 96-40 c. FTAA executed by the government with Western Mining Corporation (Phil) or WMCP 2. SC en banc promulgated its decision granting the petition and declaring the unconstitutionality of certain provisions of: a. R.A. 7942 b. DAO 96-40 and entire FTAA executed between the government and WMCP, mainly on the finding that FTAA’s are service contracts prohibited by the 1987 Constitution FIRST ISSUE: MOOTNESS • Petitioners insist that the FTAA is void and hence can’t be transferred. • Petitioners claim case is not moot considering the invalidity of the alleged sale of the shares in WMCP from WMC to Sagittarius, and of the transfer of the FTAA from WMCP to Sagittarius, resulting in the change of contractor in the FTAA in question A. Petitioners assert that par. 4 of Sec. 2 of Article. 12 permits the government to enter into FTAAs ONLY with foreign-owned corporations • Constitutional provision limits the participation of Filipino corporations in the exploration, development, and utilization of natural resources to only 3 species of contracts- production sharing, co-production, and joint venture- to the exclusion of all other arrangements or variations thereof, and the WMCP. FTAA may therefore not be validly assumed and implemented by Sagittarius. Court Held: 1. Par. 1 of Sec. 2 of Art. 12 does not support petitioners’ argument: The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing arguments with Filipino citizens, or corporations/associations at least 60% of whose capital is owned by such citizens • Nowhere in the provision is there any express limitation or restriction insofar ​as arrangements other than 3 aforementioned contractual scheme are concerned. 2. No basis to believe that the framers of the Constitution, majority of whom were obviously concerned with furthering the development and utilization of the country’s natural resources, could have wanted to restrict Filipino participation in that area. There is an overarching constitutional principle of giving preferences and priority to Filipinos and Filipino corporations in the development of our natural resources. 3. Even assuming that a constitutional limitation barring Filipino corporations from holding an implementing on FTAA actually exists, nevertheless, such provision will apply only to the transfer of the FTAA to Sagittarius, but not to the sale of WMC’ s equity stake in WMCP to Sagittarius. Otherwise, an unreasonable curtailment of property rights without due process of law would ensue. 4. FTAA is to be implemented now by a Filipino corporation; therefore it is no longer possible for the Court to declare it unconstitutional. The case pending in the CA is a dispute between two Filipino companies (Sagittarius and Lepant), both claiming the right to purchase the foreign shares in WMCP. So regardless of which side eventually wins, the FTAA would still be in the hands of a qualified Filipino company. • Considering that there is no longer any justiciable controversy, the plea to nullify the Mining Law has become a virtual petition for declaratory relief, over which this Court has original jurisdiction. B. Petitioners claim that FTAA was intended t apply solely to a foreign corporation. Court Held: 1. Petitioners manage to cite only one WMCP FTAA provision that can be regarded as clearly intended to apply only to a foreign contractor. 2. This provision (Sec. 12, which provide for international commercial arbitration under the International Chamber of Commerce after local remedies are exhausted) does not necessarily imply that the WMCP FTAA cannot be transferred to and assumed by a Filipino corporation like Sagittarius, in which event the said provision should simply be disregarded as a superfluity. C. Petitioners claim as third ground for not being moot that the suspicious sale of shares from WMC to Sagittarius, hence the need to litigate in a separate case. Sec. 40 of R.A. 7942 allegedly requires the President’s prior approval of a transfer. Court Held: 1. Sec. 40 Assignment/Transfer: A financial or technical assistance agreement may be assigned or transferred, in whole or in part, to a qualified person subject to the prior approval of the President. ​Provided, that the President shall notify Congress of every financial or technical assistance agreement assigned or converted in accordance with this provision within 30 days from the date of the approval thereof. 2. Sec. 40 expressly applies to the assignment or transfer of the FTAA, not to the sale and transfer of shares of stock in WMCP. Also, when the transferee of an FTAA is another foreign corporation, there is a logical application of the requirement of prior approval by the President of the Republic and notification to Congress in the in the event of assignment or transfer of an FTAA. In this situation, such approval and notification are appropriate safeguards considering that the new contractor is the subject of a foreign government. On the other hand, when the transferee of the FTAA happens to be a Filipino corporation, the need for such safeguard is not critical, hence, the lack of prior approval and notification may not be deemed fatal as to render the transfer invalid. D. Petitioners, to bolster further their claim that the case is not moot, insist that the FTAA is void, and hence cannot be transferred; and that its transfer does not operate to cure the constitutional infirmity that is inherent in it; neither will a change in the circum of one of the parties serve to ratify the void contract. Petitioners, in their comment on the MR did not ratiocinate that this Court had declared the FTAA to be void because at the time it was executed with WMCP, the latter was a fully foreign-owned corporation, in which the former vested full control and management with respect to the exploration, development, and utilization of mineral resources, which is unconstitutional. Since the FTAA was per se void, no valid right could be transferred; neither could it be ratified. Court Held: 1. The decision of this Court declaring the FTAA void has not yet become final. That was precisely the reason the Court still heard Oral Argument in this case. 2. The FTAA does not rest in the foreign corporation’s full control and supervision over the exploration, development, and utilization of mineral resources, to the exclusion of the government. • The government has effective overall direction and control of the mining operation, including marketing and product pricing, and that the contractor’s work programs and budgets are subject to the review and approval or disapproval. • The government does not have to micro-manage the mining operation and dip its hands into the day-to-day management of the enterprise in order to be considered as having overall control and direction. For practical and pragmatic reasons, there is a need for government agencies to delegate certain aspects of management work to the contractor. 3. Court believes that this case is clearly analogous to the Halili case, in which the land acquired by a non-Filipino was reconveyed to a qualified vendee and the original transaction was thereby cured. • Assuming arguendo the invalidity of its prior grant to a foreign corporation, the disputed FTAA, being now held by a Filipino corporation, can no longer be assailed; the objective of the constitutional provision- to keep the exploration, development, and utilization of our natural resource in Filipino hands- has been served. 4. The issuance or grant of the FTAA to the then foreign-owned WMCP was not illegal, void, nor unconstitutional at the time. Since up to this point, the decision of this Court declaring the FTAA void has yet to become final, to all interests and purposes, the FTAA must be deemed valid and unconstitutional. 5. We find in the outlandish that the government could enter into an FTAA only with a foreign corporation, never with a Filipino enterprise. The Nationalistic provisions of the constitution are all anchored on the protection of Filipino interests. SECOND ISSUE: WHETHER OR NOT THE COURT CAN STILL DECIDE THE CASE, EVEN ASSUMING IT IS MOOT Court Held: ​Yes the Court must recognize the exceptional character of the situation and the paramount public interest involved, and the necessity for a ruling to put an end to the uncertainties plaguing the mining industry with the constitutionality and validity of the Mining Act, subject FTAA, and future FTAAs. THIRD ISSUE: THE PROPER INTERPRETATION OF THE CONSTITUTIONAL PHRASE “AGREEMENTS INVOLVING EITHER TECHNICAL OR FINANCIAL ASSISTANCE” Whether RA 7942 and its Implementing Rules enable the government to exercise that degree of control sufficient to direct and regulate the conduct of affairs of individual enterprises and restrain undesirable activities. Court Held: Yes. 1. The court must recognize the exceptional character of the situation and the paramount public interest involved, as well as the necessity for a ruling to put an end to the uncertainties plaguing the mining industry and the affected communities as a result of doubts cast upon the constitutionality of and validity of the Mining Act, the subject FTAA and future FTAAs, and the need to avert a multiplicity of suits. 2. a) Paragtaph 4, section 2, art 12 b) no restriction of verba legis interpretation 1) Wherever possible, the words used in the constitution must be given their ordinary meaning except where technical terms are employed 2) where there is ambiguity, ratio legis et anima.”The words of the constitution should be interpreted in accordance with the intent of its framers. 3) The constitution is to interpreted as a whole • The court cannot see how applying a strictly literal or verba legis interpretation of par 4 could inexorably lead to the conclusions arrived at in the ponencia: a) the drafters’ choice of words- their use of the phrase agreements involving either technical or financial assistance does not indicate the intent to exclude other modes of assistance b) the inevitable conclusion that there was a conscious and deliberate decision to avoid the use of restrictive wording that bespeaks an intent not to use the expression “agreements involving either technical or financial and limiting manner” 3. Such intent cannot be definitively and conclusively established from the mere failure to carry the same expression or term over the new constitution, absent a more specific, explicit and unequivocal statement to that effect. 4.​A literal and restrictive interpretation of par 4 such as that proposed by petitioners, suffers from certain internal logical inconsistencies that generate ambiguities in the understanding of the provision. There has never been any constitutional or statutory provision that reserved the Filipino citizens or corporations, atleast 60% of w//c is Filipino-owned, the rendition of financial or technical assistance to companies engaged in mining or the dev’t of any other natural resource. ​The conclusion of the provision is clear and inescapable. A verba legis construction shows par 4 is not to be understood as one limited only to foreign loans and technical assistance. 5.​The state, whom the financial service or technical assistance is rendered, implies that it is the one directly and solely undertaking the large scale exploration, development and utilization of a mineral resource, the state must itself bear the liability of and cost of repaying the financing sourced from the foreign lender and/or of paying compensation to the foreign entity rendering technical assistance. 6. The inclusion of the clause “technical or financial assistance” recognizes the fact that foreign business entities and multinational corporations are the ones with the resources and know-how to provide technical and/or financial assistance of the magnitude and type required for large scale exploration, dev’t and utilization of the said resources. 7. There is nothing by way of transitory provisions that would serve to confirm the theory that the omission of the term “service contract” from the 1987 Constitution signaled the demise of service contracts. SUMMATION OF THE CONCOM DELIBERATIONS • Based on a careful reading of the ConCom deliberations, it was obvious that they were not about to ban or eradicate service contracts. • They were plainly crafting provisions to put in place safeguards that would eliminate or minimize the abuses prevalent during the martial law regime. • They were going to permit service contracts with foreign corporations as contractors, but with safety measures to prevent abuses. • There is a recognition of the insufficiency of Filipino capital and the felt need for foreign investment in the EDU (exploration, development, and utilization) of minerals and petroleum resources. • In the final voting, the Article on the National Economy and Patrimony including par. 4 allowing service contracts with foreign corporations as an exception to the general norm in par. 1, Sec. 2 of same article was approved. • The phrase “agreements involving either technical or financial assistance” referred in par. 4 is service contracts. o There are between foreign corporations acting as contractors on one hand and on the other, the government or principal or “owner” of the works. o Foreign contractors provide capital, technical know-how, and managerial expertise in the creation and operation of large-scale mining or extractive enterprise. While the government, through its agencies, actively exercises control and supervision over the entire operation. o Such service contracts may be entered into ONLY WITH RESPECT TO MINERALS, PETROLEUM, AND OTHER MINERAL OILS, the grant being subject to several safeguards: 1. Service contract be crafted in accordance with a general law setting standard or uniform terms, conditions, and requirements; 2. President be the signatory fir the government and; 3. President report the executed agreement to congress within 30 days. • As written by the Framers and ratified and adopted by the people, the Constitution allows the continued use of service contracts with foreign corporations- as contractors who would invest in and operate and manage extractive enterprise, subject to the full control and supervision of the state- sans the abuses of the past regime. The purpose is clear: to develop and utilize our mineral, petroleum, and other resources on a large scale for the immediate and tangible benefit of the Filipino people • SC reversed the decision of January 27, 2004 and in fact now hold a view different from that of the Decision. ULTIMATE TEST: STATE’S “CONTROL” DETERMINATIVE OF CONSTITUTIONALITY • There is a legitimate ground to be concerned that either the State’s full control and supervision may rule out any exercise of management authority by the foreign contractor; or the other way around, allowing the foreign contractor full management prerogatives may ultimately negate the State’s full control and supervision. UT MAGIS VALAET QUAM PEREAT • Every part of the Constitution is to be given effect, and the Constitution is to be read and understood as a harmonious whole. • Therefore the “full control and suprvision” by the State must be understood as one that does not preclude the legitimate exercise of management prerogatives by the foreign contractor. • Their primacy and supremacy of the principle of sovereignty and State’s control and supervision over all aspects of EDU of the country’s natural resources as mandated in par. 1 of Sec. 2 of Art. 12. • Full control and supervision cannot be taken literally to mean that the State controls and supervises everything involved, down to the minutest details, and makes all decisions required in the mining corporations. • The concept of control adopted in Sec. 2 of Art. 12 must be taken to mean less than dictatorial, all –encompassing control; but nevertheless sufficient to give the State the power to direct, restrain, regulate, and govern the affairs of the extractive enterprises. Control by the State may be on a macro level, through the establishment of policies, guidelines, regulators, industry standards and similar measures that would enable the government to control the conduct of affairs in various enterprises and restrain activities deemed not desirable or beneficial. • The end in view is ensuring that these enterprises contribute to the economic development and general welfare of the country, conserve the environment and uplift the well being of the affected local communities. Such a concept of control would be compatible with permitting the foreign contractor sufficient and reasonable management authority over the enterprise it invested in, in order to ensure that it is operating efficiently and profitably, to protect its investments and enable it to succeed. The question to be answered, then, is whether R.A. 7042 and its Implementing Rules enable the government to exercise that degree of control sufficient to direct and regulate the conduct of affairs of individual enterprises and restrain undesirable activities. RA 7942 PROVIDES FOR THE STATE’S CONTROL AND SUPERVISION OVER MINING OPERATIONS 1. ​Sec 3(aq) of RA 7942- allows a foreign contractor to apply for and hold an exploration permit- is unconstitutional • While the constitution mandates the State to exercise full control and supervision over the exploration of mineral resources, nowhere does it require the government to hold all exploration permits and similar authorizations. 2. Sec 20 of RA 7942- an exploration permit merely grants to a qualified person the right to conduct exploration for all minerals in specified areas. Such permit does not amount to an authorization to extract and carry off the mineral resources that may be discovered. THE TERMS OF THE WMCP FTAAA DEFERENCE TO STATE CONTROL • A perusal of the WMCP FTAAA also reveals a slew of stipulations providing for State control and supervision. • The concerned government officials will be informed beforehand of the proposed exploration activities and expenditures of the contractor for each succeeding 2 year period, with the right to approve/disapprove them or require changes or adjustments therein if deemed necessary. NO SURRENDER OF CONTROL UNDER THE WMCP FTAAA • Petitioners generalize the provision by asserting that the government does not participate in making critical decisions regarding the operations of the mining firm. ​The court held that the foregoing provisions do not manifest a relinquishment of control. ALL BUSINESS ENTITILED TO COST RECOVERY • Recovery of investments is absolutely indispensable for business survival; and business survival ensures soundness of the economy, w/c is critical and contributory to the general welfare of the people • In conclusion, they can hardly talk about foreign contractors taking mineral resources for free. It takes a lot of hard cash to even begin to do what they do. And what they do in this country ultimately benefits the local economy, grows businesses, generates employment, and creates infrastructure. SUMMATION A. The Meaning of “Agreements Involving Either Technical or Financial Assistance” • The framers’ choice of words does not indicate the intent to exclude other modes of assistance, but rather implies that there are other things being included or possibly being made part of the agreement, apart from financial or technical assistance. • Sec. 2 of Art. 12 of the Constitution disclose not even a hint of desire to prohibit foreign involvement in the management and operation of mining activities, or to eradicate service contracts. • The ConCom members discussed agreements involving either technical or financial assistance in the same sense as service contracts and used the terms interchangeably. • The drafters, many of whom were economists, academicians, lawyers, businesspersons and politicians knew that foreign entities will not enter into agreements involving assistance without requiring measures of protection to ensure the success of their venture and repayment of investments. • The grant of such service contracts is subject to several safeguards, among them: 1. That the service contract be crafted in accordance with the general law setting standard or uniform terms, conditions, and requirements; 2. The President be the signatory for the government; 3. The President reports the executed agreement to Congress within 30 days. B. Ultimate Test: Full State Control • “Control and Supervision” cannot be taken literally to mean that the State controls and supervises everything up to the minutest details and makes all required actions. • Control, as utilized in Sec. 2 of Art. 12, must be taken to mean a degree of control sufficient to enable the State to direct, restrain, regulate, and govern the affairs of the extractive enterprises. • Such degree of control would be compatible with permitting the foreign contractor sufficient and reasonable management authority over the enterprise it has invested in. C. Government Granted Full Control by R.A. 7042 and DOA 96-40 • The State definitely has a pivotal say in the operation of the individual enterprises, and can set directions and objectives, detect deviations and non-compliances by the contractor, and enforce compliance and impose sanctions should the occasion arise. • R.A. 7942 and DOA 96-40 vest in the government more than a sufficient degree of control and supervision over the conduct of mining operations. • Sec. 3(aq) of R.A. 7942 is not unconstitutional for it serves to protect the interests and rights of the exploration permit grantee (and would be contractor), foreign or local. D. WMCP FTAA Likewise Gives the State Full Control and Supervision • The provisions of the WMCP FTAA vest the State with control and supervision over practically all aspects of the operations of the FTAA contractor, including the charging of pre-operating and operating expenses, and disposition of mineral products. • The FTAA provisions do not reduce or abdicate State control. • The challenged provisions of R.A. 7942 cannot be said to surrender financial benefits from an FTAA to the foreign contractors. • Invalid provisions of the WMCP FTAA: Section 7.9 because it has effectively given away the State’s share without anything in exchange and Section 7.8 because it results to benefiting the contractor twice over. EPILOGUE • It is clear that there is unanimous agreement in the Court upon the key principle that the State must exercise full control and supervision over the exploration, development and utilization of mineral resources. • The crux of the controversy is the amount of discretion accorded to the Executive Department. The Court believes that it is not unconstitutional to allow a wide degree of discretion to the Chief Executive, given the nature and complexity of such agreements. • Under the doctrine of separation of powers and due respect for co-equal and coordinate branches if government, this Court must restrain itself from intruding into policy matters. • The SC sympathizes with the plight of Petitioner La Bugal B’laan and other tribal groups, and commends their efforts to uplift their communities. However, the invalidation of an otherwise constitutional statute along with its implementing rules, or the nullification of an otherwise legal and binding FTAA contract. • The Court resolves to grant the repondents’ and intervenors’ motion for reconsideration, to reverse and set aside the January 27, 2004 decision and to declare R.A. 7942, its implementing rules and regulations contained in DAO 9640, and the FTAA executed by the government (except Sec. 7.8 and Sec. 7.9) constitutional. ​ ​ Section 3

No. L-58867. June 22, 1984. DIRECTOR OF LANDS and DIRECTOR OF FOREST DEVELOPMENT, petitioners, vs. HON. COURT OF APPEALS and ANTONIO VALERIANO, GABRIELA VALERIANO VDA. DE LA CRUZ, LETICIA A. VALERIANO and MARISSA VALERIANO DE LA ROSA, respondents. FACTS: In their application for registration filed on May 10, 1976, private respondents (Applicants, for brevity) claimed that they are the co-owners in fee simple of the land applied for partly through inheritance in 1918 and partly by purchase on May 2, 1958; that it is not within any forest zone or military reservation; and that the same is assessed for taxation purposes in their names. The Republic of the Philippines, represented by the Director of the Bureau of Forest Development opposed the application on the principal ground that the land applied for is within the unclassified region of Obando, Bulacan, per BF Map LC No. 637 dated March 1, 1927; and that areas within the unclassified region are denominated as forest lands and do not form part of the disposable and alienable portion of the public domain. After hearing, the Trial Court ordered registration of the subject land in favor of the Applicants. This was affirmed on appeal by respondent Appellate Court.

ISSUE: Whether or not Courts can reclassify the subject public land.

RULING: NO. The classification of public lands is an exclusive prerogative of the Executive Department of the Government and not of the Courts. In the absence of such classification, the land remains as unclassified land until it is released therefrom and rendered open to disposition. This should be so under time-honored Constitutional precepts. This is also in consonance with the Regalian doctrine that all lands of the public domain belong to the State, and that the State is the source of any asserted right to ownership in land and charged with the conservation of such patrimony. Decision reversed and the application for registration is dismissed.

No. L-73002. December 29, 1986.* THE DIRECTOR OF LANDS, petitioner, vs. INTERMEDIATE APPELLATE COURT and ACME PLYWOOD & VENEER CO. INC., ETC., respondents. FACTS: The Director of Lands has brought this appeal by certiorari from a judgment of the Intermediate Appellate Court affirming a decision of the Court of First Instance of Isabela, which ordered registration in favor of Acme Plywood & Veneer Co., Inc. of five parcels of land measuring 481, 390 square meters, more or less, acquired by it from Mariano and Acer Infiel, members of the Dumagat tribe. The land subjects of the Land Registration proceedings was ancestrally acquired by AcmePlywood & Veneer Co., Inc., on October 29, 1962, from Mariano Infiel and Acer Infiel, both members of the Dumagat tribe and as such are cultural minorities.

ISSUE: Whether or not the title that the Infiels had transferred to Acme in 1962 could be confirmed in favor of the latter in proceedings instituted by it in 1981 when the 1973 Constitution was already in effect, having in mind the prohibition therein against private corporations holding lands of the public domain except in lease not exceeding 1,000 hectares.

Ruling; The correct rule, is that alienable public land held by a possessor, personally or through his predecessors-in-interest, openly, continuously and exclusively for the prescribed statutory period (30 years under The Public Land Act, as amended) is converted to private property by the mere lapse or completion of said period, ipso jure. Following that rule and on the basis of the undisputed facts, the land subject of this appeal was already private property at the time it was acquired from the Infiels by Acme. Acme thereby acquired a registrable title, there being at the time no prohibition against said corporation's holding or owning private land. WHEREFORE, there being no reversible error in the appealed judgment of the Intermediate Appellate Court, the same is hereby affirmed.

section 5 Cruz vs Denr G.R No. 135385. December 6, 2000.* ISAGANI CRUZ and CESAR EUROPA, petitioners, vs. SECRETARY OF ENVIRONMENT AND NATURAL RESOURCES, SECRETARY OF BUDGET AND MANAGEMENT and CHAIRMAN and COMMISSIONERS OF THE NATIONAL COMMISSION ON INDIGENOUS PEOPLES,respondents. FACTS: Petitioners, citizens and taxpayers, assail the constitutionality the provisions of the IPRA and its Implementing Rules on the ground that they amount to an unlawful deprivation of the State‟s ownership over lands of the public domain as well as minerals and other natural resources therein, in violation of the regalian doctrine embodied in Section 2, Article XII of the Constitution. ISSUE: Is Republic Act No. 8371 (R.A. 8371), otherwise known as the Indigenous Peoples Rights Act of 1997 (IPRA), and its Implementing Rules and Regulations (Implementing Rules) is constitutional? RULING: Seven (7) voted to dismiss the petition. Seven (7) other members of the Court voted to grant the petition. As the votes were equally divided (7 to 7) and the necessary majority was not obtained, the case was redeliberated upon. However, after redeliberation, the voting remained the same. Accordingly, pursuant to Rule 56, Section 7 of the Rules of Civil Procedure, the petition is DISMISSED.

section 8 RELLOSA VS. GAW CHEE HUN FACTS: On 1944, Dionisio Rellosa, a Filipino, sold to Gaw Chee Hun, a Chinese, a parcel of land with a house erected on it, located in Manila. Both parties entered into a lease contract, whereby Rellosa, the vendor, occupied the land under the condition that Gaw Chee obtain the approval of the sale by the Japanese Administration,  Seirei No. 6 issued on April 2, 1943 by the Japanese authorities which prohibits an alien from acquiring any private land not agricultural in nature during the occupation unless the necessary approval is obtained from the Director General of the Japanese Military Administration. Gaw Chee did not obtain such approval. Rellosa now seeks to annul the sale and the lease. Gaw Chee, meanwhile, contends that such sale was absolute and conditional, the same not being contrary to law, morals and public order. He further states that Rellosa is estopped from asserting his ownership over the land, after having leased the same from Gaw Chee, and thus, recognizing Gaw Chee’s title over the property.

ISSUES: WON Rellosa can have the sale declared null and void and recover the property considering the effect of the law governing rescission of contracts.

HELD: The sale in question is null and void under section 5 of article xiii but plaintiff is barred from taking the present action under the principle of pari delicto.

RATIO: A party to an illegal contract cannot come into court to have his illegal objects carried out. This is the doctrine of In Pari Delicto. Rellosa’s sale of the land to Gaw Chee, an alien is against the Constitution and is thus illegal. The Commonwealth Act provided that such sale is not only unlawful but also null and void ab initio, that such will effect the annulling and canceling of the title originally issued, and reverting the property and its improvements to the State

PBC vs Lui She

G.R. No. L-17587 September 12, 1967

PHILIPPINE BANKING CORPORATION, representing the estate of JUSTINA SANTOS Y CANON FAUSTINO, deceased, plaintiff-appellant, vs. LUI SHE in her own behalf and as administratrix of the intestate estate of Wong Heng, deceased, defendant-appellant FACTS: Justina Santos y Canon Faustino and her sister Lorenzo were the owners in common of a piece of land in Manila. This parcel of landis located on Rizal Avenue and opens into Florentino Torres street at the back and Katubusan street on one side. In it are two residential houses with entrance on Florentino Torres street and the Hen Wah Restaurant with entrance on Rizal Avenue. The sisters lived in one of the houses, while Wong Heng, a Chinese, lived with his family in the restaurant. Wong had been a long-time lessee of a portion of the property, paying a monthly rental of P2,620. On September 22, 1957 Justina Santos became the owner of the entire property as her sister died with no other heir. Then already well advanced in years, being at the time 90 years old, blind, crippled and an invalid, she was left with no other relative to live with. Her only companions in the house were her 17 dogs and 8 maids. Her otherwise dreary existence was brightened now and then by the visits of Wong's four children who had become the joy of her life. Wong himself was the trusted man to whom she delivered various amounts for safekeeping, including rentals from her property at the corner of Ongpin and Salazar streets and the rentals which Wong himself paid as lessee of a part of the Rizal Avenue property. Wong also took care of the payment; in her behalf, of taxes, lawyers' fees, funeral expenses, masses, salaries of maids and security guard, and her household expenses. "In grateful acknowledgment of the personal services of the lessee to her," Justina Santos executed on November 15, 1957 a contract of lease in favor of Wong, covering the portion then already leased to him and another portion fronting Florentino Torres street. The lease was for 50 years, although the lessee was given the right to withdraw at any time from the agreement; the monthly rental was P3,120. The contract covered an area of 1,124 square meters. Ten days later on November 25, the contract was amended so as to make it cover the entire property, including the portion on which the house of Justina Santos stood, at an additional monthly rental of P360. For his part Wong undertook to pay, out of the rental due from him, an amount not exceeding P1,000 a month for the food of her dogs and the salaries of her maids. On December 21 she executed another contract giving Wong the option to buy the leasedpremises for P120,000, payable within ten years at a monthly installment of P1,000. The option, written in Tagalog, imposed on him the obligation to pay for the food of the dogs and the salaries of the maids in her household, the charge not to exceed P1,800 a month. The option was conditioned on his obtainingPhilippine citizenship, a petition for which was then pending in the Court of First Instance of Rizal.It appears, however, that this application for naturalization was withdrawn when it was discovered that he was not a resident of Rizal. On October 28, 1958 she filed a petition to adopt him and his children on the erroneous belief that adoption would confer on them Philippine citizenship. The error was discovered and the proceedings were abandoned. On November 18, 1958 she executed two other contracts, one extending the term of the lease to 99 years, and another fixing the term of the option of 50 years. Both contracts are written in Tagalog.

In two wills executed on August 24 and 29, 1959, she bade her legatees to respect the contracts she had entered into with Wong, but in a codicil of a later date (November 4, 1959) she appears to have a change of heart. Claiming that the various contracts were made by her because of machinations and inducements practiced by him, she now directed her executor to secure the annulment of the contracts. On November 18 the present action was filed in the Court of First Instance of Manila. The complaint alleged that the contracts were obtained by Wong "through fraud, misrepresentation, inequitable conduct, undue influence and abuse of confidence and trust of and (by) taking advantage of the helplessness of the plaintiff and were made to circumvent the constitutional provision prohibiting aliens from acquiring lands in the Philippines and also of the Philippine Naturalization Laws." The court was asked to direct the Register of Deeds of Manila to cancel the registration of the contracts and to order Wong to pay Justina Santos the additional rent of P3,120 a month from November 15, 1957 on the allegation that the reasonable rental of the leased premises was P6,240 a month. In his answer, Wong admitted that he enjoyed her trust and confidence as proof of which he volunteered the information that, in addition to the sum of P3,000 which he said she had delivered to him for safekeeping, another sum of P22,000 had been deposited in a joint account which he had with one of her maids. But he denied having taken advantage of her trust in order to secure the execution of the contracts in question. As counterclaim he sought the recovery of P9,210.49 which he said she owed him for advances. Wong's admission of the receipt of P22,000 and P3,000 was the cue for the filing of an amended complaint. Thus on June 9, 1960, aside from the nullity of the contracts, the collection of various amounts allegedly delivered on different occasions was sought. These amounts and the dates of their delivery are P33,724.27 (Nov. 4, 1957); P7,344.42 (Dec. 1, 1957); P10,000 (Dec. 6, 1957); P22,000 and P3,000 (as admitted in his answer). An accounting of the rentals from the Ongpin and Rizal Avenue properties was also demanded. In the meantime as a result of a petition for guardianship filed in the Juvenile and Domestic Relations Court, the Security Bank & Trust Co. was appointed guardian of the properties of Justina Santos, while Ephraim G. Gochangco was appointed guardian of her person

ISSUES/ HELD: (Note: all of these refer to void contracts but the commentary expounds on the alien issue since it was this that made the contract truly VOID.)

1. WON the contracts are void for trying to circumvent Philippine Constitution against alienation of property to foreigners?

YES. The contract of lease cannot be sustained. Yes, a lease to an alien for a reasonable period is valid, so was an option giving an alien the right to buy real property on condition that he is granted Philippine citizenship.

But if an alien was given not only a lease of, but also an option to buy, a piece of land, by virtue of which the Filipino owner cannot sell or otherwise dispose of his property, this to last for 50 years, then it became clear that the arrangement was a virtual transfer of ownership whereby the owner divested himself in stages not only of the right to enjoy the land (jus possidendi, jus utendi, jus fruendi and jus abutendi) but also of the right to dispose of it (jus disponendi) — rights the sum total of which make up ownership. It was just as if today the possession is transferred, tomorrow, the use, the next day, the disposition, and so on, until ultimately all the rights of which ownership is made up are consolidated in an alien. And yet this was just exactly what the parties in this case did within this pace of one year, with the result that Lola J's ownership of her property was reduced to a hollow concept.

2. WON the insertion in the contract of a resolutory condition (“lessee may at any time withdraw from the agreement), valid?

YES. In the early case of Taylor vs. Uy Tiong Piao, the SC said:

Art.1256 [now art. 1308] of the Civil Code in our opinion creates no impediment to the insertion in a contract for personal service of a resolutory condition permitting the cancellation of the contract by one of the parties. Such a stipulation, as can be readily seen, does not make either the validity or the fulfillment of the contract dependent upon the will of the party to whom is conceded the privilege of cancellation; for where the contracting parties have agreed that such option shall exist, the exercise of the option is as much in the fulfillment of the contract as any other act which may have been the subject of agreement. Indeed, the cancellation of a contract in accordance with conditions agreed upon beforehand is fulfillment

Also, here, the right of Wong to terminate the contract depends on the terms stipulated so it’s not really based on his sole will. At any rate, even if no term had been fixed in the agreement, this case would at most justify the fixing of a period but not the annulment of the contract

3. WON the contract is void because the property cannot be leased for being in custodio legis? NO. Lola J was already the owner of the property and not Lorenza so she can lease the property to whoever she wants.

4. WON the contracts are void for violating the fiduciary relationship? NO. Wong was never an agent of Lola J even if they were super close. Atty. Yumol, (counsel for Lola J), admitted that Lola J’s close fellow Lola friend and maid were always by her side and they could have testified to whatever undue influence but they were not presented as witnesses. And besides, Lola J was firm in her decision in signing the contract because she believes Wong saved her life.

5. WON Lola J’s consent was valid? YES. She was well-informed by her lawyer about the possible dangers of the contract and she still gave her consent voluntarily.

DISPOSITION: The contracts in question are annulled and set aside; the land subject-matter of the contracts was ordered returned to the estate of Justina Santos as represented by the Philippine Banking Corporation

Barsobia vs Cuenco

Nature: Complaint for Recovery of Possession Ponente: Melencio-Herrera, J. Date: April 16, 1982

DOCTRINE: Laches may prevent a person from asserting his rights despite the initial invalidity of the contract.

FACTS:

The lot in controversy is a one-half portion (on the northern side) of two adjoining parcels of coconut land in Camiguin. The entire land was owned previously by a certain Leocadia Balisado, who had sold it to the spouses Patricio Barsobia (now deceased) and Epifania Sarsosa, one of the petitioners herein. They are Filipino citizens.

Sarsosa then a widow, sold the land in controversy to a Chinese, Ong King Po, for the sum of P1,050.00. Ong King Po took actual possession and enjoyed the fruits thereof. Ong King Po sold the litigated property to Victoriano Cuenco (respondent), a naturalized Filipino, for the sum of P5,000.00. Respondent immediately took actual possession and harvested the fruits therefrom. Epifania "usurped" the controverted property, and and later on (through her only daughter and child, Emeteria Barsobia), sold a one-half (1/2) portion of the land in question to Pacita Vallar, the other petitioner herein. Epifania claimed that it was not her intention to sell the land to Ong King Po and that she signed the document of sale merely to evidence her indebtedness to the latter in the amount of P1,050.00. Epifania has been in possession ever since except for the portion sold to the other petitioner Pacita.

Respondent instituted before CFI a Complaint for recovery of possession and ownership of the litigated land, against Epifania and Pacita Vallar.

Petitioners insisted that they were the owners and possessors of the litigated land; that its sale to Ong King Po, a Chinese, was inexistent and/or void ab initio; and that the deed of sale betweenthem was only an evidence of Epifania's indebtedness to Ong King Po.

The trial Court ruled that the two Deeds of Sale are inexistent and void from the beginning; and declared that Pacita Vallar as the lawful owner and possessor of the portion of land she bought from Emeteria Barsobia CA reversed the Decision and decreed instead that respondent was the owner of the litigated property.

ISSUE: Who is the rightful owner of the property?

Hello there,

"RULING: CUENCO. The litigated property is now in the hands of a naturalized Filipino. It is no longer owned by a disqualified vendee. Respondent, as a naturalized citizen, was constitutionally qualified to own the subject property. There would be no more public policy to be served in allowing petitioner Epifania to recover the land as it is already in the hands of a qualified person The sale of the land in question in 1936 by Epifania to Ong King Po was inexistent and void from the beginning (Art. 1409 [7], Civil Code) because it was a contract executed against the mandatory provision of the 1935 Constitution, which is an expression of public policy to conserve lands for the Filipinos. Had this been a suit between Epifania and Ong King Po, she could have been declared entitled to the litigated land.

While, strictly speaking, Ong King Po had no rights of ownership to transmit, it is likewise inescapable that petitioner Epifania had slept on her rights for 26 years from 1936 to 1962. By her long inaction or inexcusable neglect, she should be held barred from asserting her claim to the litigated property (Sotto vs. Teves, 86 SCRA 157 [1978]).

Laches has been defined as the failure or neglect, for an unreasonable and unexplained length of time, to do that which by exercising due diligence could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it. (Tijam, et al. vs. Sibonghanoy). Respondent, therefore, must be declared to be the rightful owner of the property.

Wilson P. Gamboa v. Finance Secretary Margarito Teves, et al. G.R. No. 176579 June 28, 2011

FACTS: This is a petition to nullify the sale of shares of stock of Philippine Telecommunications Investment Corporation (PTIC) by the government of the Republic of the Philippines, acting through the Inter-Agency Privatization Council (IPC), to Metro Pacific Assets Holdings, Inc. (MPAH), an affiliate of First Pacific Company Limited (First Pacific), a Hong Kong-based investment management and holding company and a shareholder of the Philippine Long Distance Telephone Company (PLDT).

The petitioner questioned the sale on the ground that it also involved an indirect sale of 12 million shares (or about 6.3 percent of the outstanding common shares) of PLDT owned by PTIC to First Pacific. With the this sale, First Pacific’s common shareholdings in PLDT increased from 30.7 percent to 37 percent, thereby increasing the total common shareholdings of foreigners in PLDT to about 81.47%. This, according to the petitioner, violates Section 11, Article XII of the 1987 Philippine Constitution which limits foreign ownership of the capital of a public utility to not more than 40%, thus:

Section 11. No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least sixty per centum of whose capital is owned by such citizens; nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines. (Emphasis supplied)

ISSUE: Does the term “capital” in Section 11, Article XII of the Constitution refer to the total common shares only, or to the total outstanding capital stock (combined total of common and non-voting preferred shares) of PLDT, a public utility?

HELD: The Court partly granted the petition and held that the term “capital” in Section 11, Article XII of the Constitution refers only to shares of stock entitled to vote in the election of directors of a public utility, i.e., to the total common shares in PLDT.

Considering that common shares have voting rights which translate to control, as opposed to preferred shares which usually have no voting rights, the term “capital” in Section 11, Article XII of the Constitution refers only to common shares. However, if the preferred shares also have the right to vote in the election of directors, then the term “capital” shall include such preferred shares because the right to participate in the control or management of the corporation is exercised through the right to vote in the election of directors. In short, the term “capital” in Section 11, Article XII of the Constitution refers only to shares of stock that can vote in the election of directors.

To construe broadly the term “capital” as the total outstanding capital stock, including both common and non-voting preferred shares, grossly contravenes the intent and letter of the Constitution that the “State shall develop a self-reliant and independent national economy effectively controlled by Filipinos.” A broad definition unjustifiably disregards who owns the all-important voting stock, which necessarily equates to control of the public utility.

In this case, (1) foreigners own 64.27% of the common shares of PLDT, which class of shares exercises the sole right to vote in the election of directors, and thus exercise control over PLDT; (2) Filipinos own only 35.73% of PLDT’s common shares, constituting a minority of the voting stock, and thus do not exercise control over PLDT; (3) preferred shares, 99.44% owned by Filipinos, have no voting rights; (4) preferred shares earn only 1/70 of the dividends that common shares earn; (5) preferred shares have twice the par value of common shares; and (6) preferred shares constitute 77.85% of the authorized capital stock of PLDT and common shares only 22.15%. This kind of ownership and control of a public utility is a mockery of the Constitution.

Thus, the Respondent Chairperson of the Securities and Exchange Commission was DIRECTED by the Court to apply the foregoing definition of the term “capital” in determining the extent of allowable foreign ownership in respondent Philippine Long Distance Telephone Company, and if there is a violation of Section 11, Article XII of the Constitution, to impose the appropriate sanctions under the law. Telecommunications and Broadcast Attorneys of the Philippines v. COMELEC, GR No. 132922, April 21, 1998 Facts: Petitioner Telecommunications and Broadcast Attorneys of the Philippines, Inc. (TELEBAP) is an organization of lawyers of radio and television broadcasting companies. It was declared to be without legal standing to sue in this case as, among other reasons, it was not able to show that it was to suffer from actual or threatened injury as a result of the subject law. Petitioner GMA Network, on the other hand, had the requisite standing to bring the constitutional challenge. Petitioner operates radio and television broadcast stations in the Philippines affected by the enforcement of Section 92, B.P. No. 881.

Petitioners challenge the validity of Section 92, B.P. No. 881 which provides:“Comelec Time- The Commission shall procure radio and television time to be known as the “Comelec Time” which shall be allocated equally and impartially among the candidates within the area of coverage of all radio and television stations. For this purpose, the franchise of all radio broadcasting and television stations are hereby amended so as to provide radio or television time, free of charge, during the period of campaign.”Petitioner contends that while Section 90 of the same law requires COMELEC to procure print space in newspapers and magazines with payment, Section 92 provides that air time shall be procured by COMELEC free of charge. Thus it contends that Section 92 singles out radio and television stations to provide free air time.vPetitioner claims that it suffered losses running to several million pesos in providing COMELEC Time in connection with the 1992 presidential election and 1995 senatorial election and that it stands to suffer even more should it be required to do so again this year. Petitioners claim that the primary source of revenue of the radio and television stations is the sale of air time to advertisers and to require these stations to provide free air time is to authorize unjust taking of private property. According to petitioners, in 1992 it lost P22,498,560.00 in providing free air time for one hour each day and, in this year’s elections, it stands to lost P58,980,850.00 in view of COMELEC’s requirement that it provide at least 30 minutes of prime time daily for such.

Issues: 1. Whether or not Section 92 of B.P. No. 881 denies radio and television broadcast companies the equal protection of the laws. 2. Whether or not Section 92 of B.P. No. 881 constitutes taking of property without due process of law and without just compensation.

Held: Petitioner’s argument is without merit. All broadcasting, whether radio or by television stations, is licensed by the government. Airwave frequencies have to be allocated as there are more individuals who want to broadcast that there are frequencies to assign. Radio and television broadcasting companies, which are given franchises, do not own the airwaves and frequencies through which they transmit broadcast signals and images. They are merely given the temporary privilege to use them. Thus, such exercise of the privilege may reasonably be burdened with the performance by the grantee of some form of public service. In granting the privilege to operate broadcast stations and supervising radio and television stations, the state spends considerable public funds in licensing and supervising them. The argument that the subject law singles out radio and television stations to provide free air time as against newspapers and magazines which require payment of just compensation for the print space they may provide is likewise without merit. Regulation of the broadcast industry requires spending of public funds which it does not do in the case of print media. To require the broadcast industry to provide free air time for COMELEC is a fair exchange for what the industry gets.As radio and television broadcast stations do not own the airwaves, no private property is taken by the requirement that they provide air time to the COMELEC.

WIGBERTO TANADA, ET. AL. vs EDGARDO ANGARA, ET. AL. Facts: On April 15, 1994 Rizalino Navarro, the Secretary of Department of Trade and Industry representing the Government of the Republic of the Philippines, signed the Final Act Embodying the results of the Uruguay Round of Multilateral Negotiations. By signing the Final Act he bound the Philippines to submit to its respective competent authorities the WTO (World Trade Organization) Agreements to seek approval. On December 14, 1994, the Phillipine Senate adopted Resolution No. 97 to ratify the WTO agreement. This is a petition seeking to nullify the ratification of the World Trade Organization (WTO) Agreement. Petitioners question the concurrence of the respondents acting in their capacities as Senators by signing the said agreement and the constitutionality of the WTO agreement as it derogates from the power to tax, which is lodged in the Congress and violates Sec 19, Article II, providing for the development of a self reliant and independent national economy, and Sections 10 and 12, Article XII, providing for the “Filipino first” policy.

Issues: 1. Whether the provisions of the WTO Agreement and its three annexes contravene with Section 19, Article II, and Sections 10 and 12, Article XII, of the Constitution. 2. Whether sovereignty can be limited by international laws and treaties.

Ruling: Sovereignty is limited by International Laws and Treaties. While sovereignty has traditionally been deemed absolute and all-encompassing on the domestic level, it is however subject to restrictions and limitations voluntarily agreed to by the Philippines, expressly or impliedly, as a member of the family of nations. Unquestionably, the Constitution did not envision a hermit-type isolation of the country from the rest of the world. One of the oldest and most fundamental rules in international law is pacta sunt servanda -- international agreements must be performed in good Hello there, faith. “A treaty engagement is not a mere moral obligation but creates a legally binding obligation on the parties x x x. A state which has contracted valid international obligations is bound to make in its legislations such modifications as may be necessary to ensure the fulfillment of the obligations undertaken.”By their inherent nature, treaties really limit or restrict the absoluteness of sovereignty. By their voluntary act, nations may surrender some aspects of their state power in exchange for greater benefits granted by or derived from a convention or pact. After all, states, like individuals, live with coequals, and in pursuit of mutually covenanted objectives and benefits, they also commonly agree to limit the exercise of their otherwise absolute rights. Thus, treaties have been used to record agreements between States concerning such widely diverse matters as, for example, the lease of naval bases, the sale or cession of territory, the termination of war, the regulation of conduct of hostilities, the formation of alliances, the regulation of commercial relations, the settling of claims, the laying down of rules governing conduct in peace and the establishment of international organizations. The sovereignty of a state therefore cannot in fact and in reality be considered absolute. Certain restrictions enter into the picture: (1) limitations imposed by the very nature of membership in the family of nations and (2) limitations imposed by treaty stipulations.A portion of sovereignty may be waived without violating the Constitution, based on the rationale that the Philippines “adopts the generally accepted principles of international law as part of the law of the land and adheres to the policy of peace, equality, justice, freedom, cooperation, and amity with all nations.

Hello there,

"Liban vs. Gordon (2009) Ponente: Carpio, J.

Facts: Petitioners are officers of the Board of Directors of the QC Red Cross Chapter while Respondent is the Chairman of the Philippine National Red Cross (PNRC) Board of Governors. Petitioners allege that by accepting the chairmanship of the PNRC Board of Governors, respondent has ceased to be a member of the Senate - Sec. 13, Art. VI, 1987 Consti: No Senator or Member of the HoR may hold any other office/employment in the Gov’t, or any subdivision, agency, or instrumentality thereof, including gov’t-owned or controlled corporations or their subsidiaries, during his term w/o forfeitinghis seat. Neither shall he be appointed to any office which may have been created or the emoluments thereof increased during the term for which he was elected).Petitioners cite Camporedondo v. NLRC which held that PNRC is a gov’t-owned or controlled corporation. Flores v. Drilon held that incumbent national legislators lose their elective posts upon their appointment to another government office.

Respondent:  Petitioners have no standing to file petition w/cappears to be an action for quo warranto – they do not claim to be entitled to the Senate office of respondent.  Sec. 11, Rule 66, Rules of Civil Procedure: action should be commenced w/in 1 year after the cause of public officer’s forfeiture of office – respondent has been working as a Red Cross volunteer for 40 yrs  Petitioners cannot raise a constitutional question as taxpayers – no claim that they suffered some actual damage/threatened injury or illegal disbursement of public funds  If petition is for declaratory relief, SC has no jurisdiction  original jurisdiction in RTC  PNRC is not a gov’t owned/controlled corporation  Sec. 13, Art. VI of Consti does not apply because volunteer service to PNRC is not an office/employment

Petitioners: present petition is a taxpayer’s suitquestioning unlawful disbursement of funds considering that respondent has been drawing hissalaries and other compensation as a Senator even if he is no longer entitled to his office. Court has jurisdiction because it involves a legal/constitutional issue of transcendental importance.

Issues, Holding & Ratio: WON petitioners have standing.

SC: NO. The petition is an action for quo warranto (Sec. 1, Rule 66, Rules of Court – an action for theusurpation of a public office against a public officer who does or suffers an act which constitutes a ground for forfeiture of his office). See facts for petitioner’s allegations. Petitioners do not claim to be entitled to the Senate office of respondent.

WON PNRC is a Private or Government-Owned or Controlled Corporation. SC: PNRC is a Private Corporation.

May 22, 1947 – Pres. Manuel Roxas signed RA 95 (PNRC Charter) adhering to the Geneva Convention of July 27, 1929. PNRC is:-

A non-profit, donor-funded, voluntary, humanitarian organization whose mission is to bring timely, effective, and compassionate humanitarian assistance for the most vulnerable w/o consideration of nationality, race, religion, gender, social status, or political affiliation. - A member of National Society of the International Red Cross and Red Crescent

Movement. 7 Fundamental Principles: Humanity, Impartiality, Neutrality, Independence, Voluntary Service, Unity, Universality.

- Must be autonomous, neutral and independent; not appear to be instrument/agency that implements gov’t policy to merit the trust of all and effectively carry out its mission – therefore, it cannot be owned/controlled by the gov’tThe Philippine gov’t does not own the PNRC – does not have gov’t assets and does not receive any appropriation from the Congress. It is financed primarily by contributions from private individuals/entities obtained through solicitation campaigns organized by its Board of Governors (Sec. 11, PNRC Charter). The gov’t does not control the PNRC. Only 6 of the 30 members of the PNRC Board of Governors are appointed by the President of the Philippines (Sec. 6, PNRC Charter). A majority of 4/5 of the PNRC Board are elected/chosen by the private sector members of the PNRC. The PNRC Chairman is not appointed by the President or any subordinate gov’t official, therefore, he is not an official/employee of the Philippine Government. Sec. 16, Art. VII of Consti – President appoints all officials & employees in the Executive branch whose appointments are vested in the President by the Consti or by law. President also appoints those whose appointments are not otherwise provided by law. The law may also authorize the “heads of deparments, agencies, commissions, or boards" to appoint officers in rank The vast majority of the thousands of PNRC members are private individuals, including students and foreigners; those contribute to the annual fund campaign of the PNRC (Sec. 5, PNRC Charter amended by PD 1264). Sec. 2(13) of he Introductory Provisions of the Administrative Code of 1987: A gov’t-owned or controlled corporation must be owned by the gov’t, and in case of a stock corporation, at least a majority of its capital stock must be owned by the gov’t. In case of a non-stock corporation, at least a majority of the members must be gov’t officials holding such membership by appointment/designation by the gov’t. WON the office of the PNRC Chairman is a gov’t office or an office in a government- owned or controlled corporation for purposes of the prohibition in Sec. 13, Art. VI of Consti. SC: The office of the PNRC Chairman is a private office. The President cannot review, reverse or modify the decisions/actions of the PNRC Board and the PNRC Chairman. Only the PNRC Board can review, reverse or modify the decisions/actions of the PNRC Chairman. Constitutional Proscription against the Creation of Private Corporations by Special Law 1935 (Sec. 7 was in force when PNRC was created by special character on March 22, 1947), 1973 & 1987 (Sec. 16) Constitutions provide that: The Congress shall not, except by general law, provide for the formation, organization, or regulation of private corporations. Gov’t-owned or controlled corporations may be created/established by special charters in the interest of the common good and subject to the test of economic viability. Feliciano v. CoA – Sec. 16 of 1987 Consti bans private corporations to be created by special charters, which historically gave individuals, families or groups special privileges denied to other citizens. PNRC was created through a special charter, however, the elements of gov’t ownership and control (e.g. capital assets and operating funds from gov’t) are clearly lacking in the PNRC. It therefore cannot be considered a gov’t-owned or controlled corporation. In creating PNRC as a corporate entity, Congress was in fact creating a private corporation, which is not exempt from constitutional prohibition (Sec. 16 above) even as a non-profit/charitable corporation. PNRC Charter insofar as it creates the PNRC as a private corporation and grants it corporate powers is void for being unconstitutional  Sec. 1-13 are void. Other provisions remain valid as they can be considered as a recognition by the State that PNRC is the local National Society of the International Red Cross and Red Crescent Movement and thus entitled to the benefits, exemptions and privileges set forth in the PNRC Charter. They also implement the Phil. Gov’t’s treaty obligations based on the Geneva Conventions. Judgment: Office of the PNRC Chairman declared not a government office. Dissent: Nachura, J. The petition is one for prohibition and petitioners have legal standing as citizens and taxpayers. The remedy sought is preventive and restrictive, an injunction against an alleged continuing violation of the fundamental law. They raise a constitutional issue, w/o claiming any entitlement to either the Senate seat or chairmanship of PNRC. The Court has full authority and bounden duty to assume jurisdiction to determine WON other branches of gov’t have kept themselves w/in the limits of the Consti & laws and have not abused discretion given them. PNRC is a gov’t-owned or controlled corporation (GOCC). Its charter does not violate the constitutional proscription against creation of private corporations by special law. PNRC was incorporated under RA 95, a special law. It cannot be anything but a GOCC. PNRC was not impliedly converted into a private corporation simply because its charter was amended to vest in it authority to secure loans, be exempted from payment of all duties, tax fees, etc. The use of Sec. 2(13) of Introductory Provisions of Administrative Code of 1987 by the ponencia to define a GOCC does not pronounce a definition of a GOCC that strays from Sec. 16, Art. XII of Consti. It merely declares that a GOCC may either be a stock or non-stock corporation. Sec. 1 of PNRC Charter – PNRC is officially designated to assist the RP in discharging the obligations set forth in the Geneva Conventions – therefore, it is engaged in the performance of the gov’ts public functions. PNRC is endowed w/ corporate powers. It administers special funds – contributions of members, aid given by gov’t, supported by PCSO and LGUs. It submits annual reports receipts and disbursement to the President. ANRC (precursor of PNRC) is considered a federal instrumentality – immunity from state taxation, subjected to governmental supervision & regular financial audit, principal officer appointed by the President – but remains an independent, volunteer-led org. No basis to assume that it cannot merit the trust of all and effectively carry out mission as a National Red Cross Society. Separatists & insurgents do not consider them as the enemy but as the entity to turn to in the event of injury. Considering that PNRC is a GOCC, its charter does not violate the constitutional provision (Sec. 16, Art. XII). To declare Sec. 1 of PNRC Charter (creation and incorporation of the org) invalid and the rest valid is to reach an absurd situation in w/c obligations are imposed on and a framework for its operation is laid down for a legally non- existing entity. Sec. 2-17 of RA 95 are not separable from Sec. 1 – cannot stand independently – no separability clause. Presumption of constitutionality of law is presumed. There is no clear showing that the PNRC Charter runs counter to the consti. All reasonable doubts should be resolved in favor of the constitutionality of the statute. Deleterious effects will result if PNRC is declared a private corporation – employees will no longer be covered by the GSIS; it can no longer be extended tax exemptions and official immunity; and cannot anymore be given support, financial or otherwise, by the National Gov’t, LGUs, and PCSO. The Court must not arbitrarily declare a law unconstitutional just to save a single individual from unavoidable consequences of his transgression of the Consti even if done in good faith. Sen. Gordon’s continuous occupancy of 2 incompatible positions is a clear violation of the Consti (Sec. 13, Art. VI). The language in the provision is unambiguous; requires no in-depth construction. A position held in an ex officio capacity (a second post held by virtue of the functions of the first office) does not violate such constitutional proscription. The chairmanship of the PNRC Board is not held in an ex officio capacity by a member of Congress.Vote to grant Petitioion
 * The PNRC Charter is Violative of the

Tatad vs. Secretary of the Department of Energy G.R. No. 124360, November 5, 1997 Facts: The petitions assail the constitutionality of various provisions of RA 8180 entitiled the “Downstream Oil Industry Deregulation Act of 1996.” Under the deregulated environment, any person or entity may import or purchase any quantity of crude oil and petroleum products from a foreign or domestic source, lease or own and operate refineries and other downstream oil facilities and market such crude oil or use the same for his own requirement, subject only to monitoring by the Department of Energy.

Issues: (1) Whether or not the petitions raise a justiciable controversy (2) Whether or not the petitioners have the standing to assail the validity of the law (3) Whether or not Sec. 5(b) of RA 8180 violates the one title one subject requirement of the Constitution (4) Whether or not Sec. 15 of RA 8180 violates the constitutional prohibition on undue delegation of power (5) Whether or not RA 8180 violates the constitutional prohibition against monopolies, combinations in restraint of trade and unfair competition

Held: As to the first issue, judicial power includes not only the duty of the courts to settle actual controversies involving rights which are legally demandable and enforceable, but also the duty to determine whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government. The courts, as guardians of the Constitution, have the inherent authority to determine whether a statute enacted by the legislature transcends the limit imposed by the fundamental law. Where a statute violates the Constitution, it is not only the right but the duty of the judiciary to declare such act as unconstitutional and void.

The effort of respondents to question the legal standing of petitioners also failed. The Court has brightlined its liberal stance on a petitioner’s locus standi where the petitioner is able to craft an issue of transcendental significance to the people. In the case, petitioners pose issues which are significant to the people and which deserve the Court’s forthright resolution.

It is also contended that Sec. 5(b) of RA 8180 on tariff differential violates the provision of the Constitution requiring every law to have only one subject which should be expressed in its title. The Court did not concur with this contention. The title need not mirror, fully index or catalogue all contents and minute details of a law. A law having a single general subject indicated in the title may contain any number of provisions, no matter how diverse they may be, so long as they are not inconsistent with or foreign to the general subject, and may be considered in furtherance of such subject by providing for the method and means of carrying out the general subject. The Court held that Sec. 5 providing for tariff differential is germane to the subject of RA 8180 which is the deregulation of the downstream oil industry. Petitioners also assail Sec. 15 of RA 8180 which fixes the time frame for the full deregulation of the downstream oil industry for being violative of the constitutional prohibition on undue delegation of power. There are two accepted tests to determine whether or not there is a valid delegation of legislative power: the completeness test and the sufficient standard test. Under the first test, the law must be complete in all its terms and conditions when it leaves the legislative such that when it reaches the delegate the only thing he will have to do is to enforce it. Under the sufficient standard test, there must be adequate guidelines or limitations in the law to map out the boundaries of the delegate’s authority and prevent the delegation from running riot. Section 15 can hurdle both the completeness test and the sufficient standard test. Congress expressly provided in RA 8180 that full deregulation will start at the end of March 1997, regardless of the occurrence of any event. Full deregulation at the end of March 1997 is mandatory and the Executive has no discretion to postpone it for any purported reason. Thus, the law is complete on the question of the final date of full deregulation. The discretion given to the President is to advance the date of full deregulation before the end of March 1997. Section 15 lays down the standard to guide the judgment of the President. He is to time it as far as practicable when the prices of crude oil and petroleum products in the world market are declining and when the exchange rate of the peso in relation to the US dollar is stable.

Petitioners also argued that some provisions of RA 8180 violate Sec. 19, Art. XII of the Constitution. Section 19, Art. XII of the Constitution espouses competition. The desirability of competition is the reason for the prohibition against restraint of trade, the reason for the interdiction of unfair competition, and the reason for regulation of unmitigated monopolies. Competition is thus the underlying principle of Sec. 19, Art. XII of the Constitution which cannot be violated by RA 8180. Petron, Shell and Caltex stand as the only major league players in the oil market. As the dominant players, they boast of existing refineries of various capacities. The tariff differential of 4% on imported crude oil and refined petroleum products therefore works to their immense benefit. It erects a high barrier to the entry of new players. New players that intend to equalize the market power of Petron, Shell and Caltex by building refineries of their own will have to spend billions of pesos. Those who will not build refineries but compete with them will suffer the huge disadvantage of increasing their product cost by 4%. They will be competing on an uneven field. The provision on inventory widens the balance of advantage of Petron, Shell and Caltex against prospective new players. Petron, Shell and Caltex can easily comply with the inventory requirement of RA 8180 in view of their existing storage facilities. Prospective competitors again will find compliance with this requirement difficult as it will entail a prohibitive cost.

The most important question is whether the offending provisions can be individually struck down without invalidating the entire RA 8180. The general rule is that where part of a statute is void as repugnant to the Constitution, while another part is valid, the valid portion, if separable from the invalid, may stand and be enforced. The exception to the general rule is that when the parts of a statute are so mutually dependent and connected, as conditions, considerations, inducements or compensations for each other, as to warrant a belief that the legislature intended them as a whole, the nullity of one part will vitiate the rest. RA 8180 contains a separability clause. The separability clause notwithstanding, the Court held that the offending provisions of RA 8180 so permeate its essence that the entire law has to be struck down. The provisions on tariff differential, inventory and predatory pricing are among the principal props of RA 8180. Congress could not have regulated the downstream oil industry without these provisions. Unfortunately, contrary to their intent, these provisions on tariff differential, inventory and predatory pricing inhibit fair competition, encourage monopolistic power and interfere with the free interaction of market forces.