SANTA ROSA MINING COMPANY, INC., PETITIONER, VS. HON. MINISTER OF NATURAL RESOURCES JOSE J. LEIDO, JR. AND DIRECTOR OF MINES JUANITO C. FERNANDEZ, RESPONDENTS.

This is a special civil action for certiorari and
prohibition with prayer for a writ of preliminary injunction, to declare
Presidential Decree No. 1214 unconstitutional and to enjoin respondent public
officials from enforcing it.  On 19 October 1978, the Court required
the respondents to comment on the petition and issued a temporary restraining
order continuing until otherwise ordered by the Court.

Petitioner Santa Rosa Mining Company, Inc. (petitioner, for
short) 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, for short).

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^[1].

On 10 October 1978, or three (3) days before filing the disputed
mining lease application, petitioner filed this special civil action for certiorari
and prohibition, alleging that it has no other plain, speedy and adequate
remedy in the ordinary course of law to protect its rights (except by said
petition).  Petitioner assails
Presidential Decree No. 1214 as unconstitutional in that it amounts to a
deprivation of property without due process of law.

Petitioner avers that its
fifty (50) mining claims had already been declared as its own private and
exclusive property in final judgments rendered by the Court of First
Instance of Camarines Norte (CFI, for short) in land
registration proceedings initiated by third persons, such as, a September 1951
land title application by a certain Gervacio Liwanag, where the Director of Mines opposed the grant of
said application because herein petitioner, according to him (Director of
Mines), had already located and perfected its mining claims over the area
applied for.  Petitioner also cites LRC
Case No. 240, filed 11 July 1960,
by one Antonio Astudillo, and decided in 1974 against
said applicant, in which, petitioner’s mining claims were described as vested
property outside the jurisdiction of the Director of Mines^[2].

In answer, the respondents allege that petitioner has no standing
to file the instant petition as it failed to fully exhaust administrative
remedies.  They cite the pendency of petitioner’s appeal, with the Office of the
President, of the ruling of the respondent Secretary of Natural Resources
issued on 2 April 1977 in DNR Case No. 4140, which upheld the decision of the
Director of Mines finding that forty four (44) out of petitioner’s fifty (50)
mining claims were void for lack of valid “tie points” as required
under the Philippine Bill of 1902, and that all the mining claims had already
been abandoned and cancelled, for petitioner’s non-compliance with the legal
requirements of the same Phil. Bill of 1902 and Executive Order no. 141^[3].

We agree with respondents’ contention that it is premature for
the Court to now make a finding on the matter of whether petitioner had
abandoned its mining claims.  Until
petitioner’s appeal shall have been decided by the Office of the President,
where it is pending, petitioner’s attempt to seek judicial recognition of the
continuing validity of its mining claims, cannot be entertained by the
Court.  As stated by the Court, through
Mr. Justice Sabino Padilla in Ham v. Bachrach Motor Co. Inc.^[4],
applying the principle of exhaustion of administrative remedies:  “By its own act of appealing from the
decision of the Director of Lands and the Secretary of Agriculture and Natural
Resources to the President of the Philippines, and without waiting for the
latter’s decision, the defendant cannot complain if the courts do not take
action before the President has decided its appeal”^[5].

The decisions of the Court of First Instance of Camarines Norte in applications for land registration filed
by third persons covering the area over which petitioner had located and
registered its mining claims, as cited by petitioner, are inapplicable.  Said decisions merely denied the applications
of such third persons for land registration over areas already covered by
petitioner’s mining claims, for failure to show titles that were registrable under the Torrens
system; that was all.  While the CFI made
a statement in one case declaring that the petitioner’s mining claims are its
vested property and even patentable at that time, there is nothing in
said CFI decision that squarely passed upon the question of whether petitioner
had valid, patentable (but still unpatented) mining claims which it had continued
to maintain, in compliance with the requirements of applicable
laws.  This question which involves a
finding of facts, is precisely the issue before the Office of the President in
the petitioner’s appeal from the decision of the Secretary of Natural Resources
in DNR Case No. 4140 holding that petitioner’s mining claims are considered
abandoned and cancelled for failure of petitioner to comply with the
requirements of the Philippine Bill of 1902 and Executive Order no. 141.  In short, the decisions of the Court of First
Instance of Camarines Norte, relied upon by
petitioner, do not foreclose a proceeding, such as DNR Case No. 4140, to
determine whether petitioner’s unpatented mining claims have remained
valid and subsisting.

Respondents further contend that, even assuming arguendo that petitioner’s mining claims were valid
at the outset, if they are deemed abandoned and cancelled due to non-compliance
with the legal requirements for maintaining a perfected mining claim, under the
provisions of the Philippine Bill of 1902^[6],
petitioner has no valid and subsisting claim which could be lost through the
implementation of Presidential Decree no. 1214, thus giving it no standing to
question the Decree.

Petitioner, on the other hand, would rebut respondents’ argument
by declaring that it already had a vested right over its mining claims even
before Presidential Decree No. 1214, following the rulings in McDaniel v. Apacible^[7]
and Gold Creek Mining Corp v. Rodriguez^[8].

The Court is not impressed that this is so.

The cases cited by petitioner, true enough, recognize the right
of a locator of a mining claim as a property right.  This right, however is not absolute.  It is merely a possesory
right, more so, in this case, where petitioner’s claims are still
unpatented.  They can be lost through abandonment
or forfeiture or they may be revoked for valid legal grounds.  The statement in McDaniel v. Apacible that “There is no pretense in the present
case that the petitioner has not complied with all the requirements of the law
in making the location of the mineral claims in question, or that the claims in
question were ever abandoned or forfeited by him“^[9],
confirms that a valid mining claim may still be lost through abandonment or
forfeiture.

The petitioner can not successfully plead the ruling in Gold
Creek Mining Corp. v. Rodriguez, supra. 
In that case, what was in issue was Gold Creek’s right to a
patent over its mining claim, after compliance with all legal requirements
for a patent.  In the present case,
no application for patent is in issue, although as a holder of patentable
mining claims petitioner could have applied for one during all these years but
inexplicably did not do so.  In Gold
Creek, no finding of abandonment was ever made against the mining claimant
as to deprive it of the initial privilege given by virtue of its location; on
the other hand, such a finding has been made in petitioner’s case (although the
finding among others is on appeal with the President).

We now come to the question of whether or not Presidential Decree
No. 1214 is constitutional.  Even
assuming arguendo that petitioner was not
bound to exhaust administrative remedies on the question of whether or not its
mining claims are still subsisting (not abandoned or cancelled), before
challenging the constitutionality of said Decree, we hold that Presidential
Decree No. 1214 is not unconstitutional^[10].  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. Dec.
No. 463, the Mineral Development Resources Decree of 1974.

Mere location does not mean absolute ownership over the affected
land or the mining claim.  It merely
segregates the located land or area from the public domain by barring other would-be locators from locating
the same and appropriating for themselves the minerals found therein.  To rule otherwise would imply that location
is all that is needed to acquire and maintain rights over a
located mining claim.  This, we cannot
approve or sanction because it is contrary to the intention of the lawmaker
that the locator should faithfully and consistently comply with the requirements
for annual work and improvements in the located mining claim.

Presidential Decree No.
1214 is in accord with Sec. 8, Art. XIV of the 1973 Constitution which states:

“All lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy, fisheries,
wildlife, and other natural resources of the Philippines belong to the
State.  With the exception of
agricultural, industrial or commercial, residential and resettlement lands of
the public domain, natural resources shall not be alienated, and no license,
concession, or lease for the exploration, development, exploitation, or
utilization of any of the natural resources shall be granted for a period
exceeding twenty-five years, renewable for not more than twenty-five years,
except as to water rights for
irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases, beneficial use may be the measure
and the limit of the grant”.

The same constitutional
mandate 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.  x x x

WHEREFORE, premises considered, the petition is hereby
DISMISSED.  The temporary restraining
order issued by the Court on 19 October 1978 is LIFTED and SET ASIDE.  Costs against the petitioner.

SO ORDERED.

Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,
Feliciano, Gancayco, Bidin,
Sarmiento, and
Cortes, JJ., concur.

^[1]
Rollo, at 313.

^[2]
Rollo, at 106. 
A portion of the CFI decision in LRC No. 240 reads:

“Since it is abundantly clear that
the 59 mining claims of the Sta. Rosa Mining Co. have all been located and
registered under the law obtaining prior to the effectivity
of the Constitution of 1935.  Sta Rosa’s claim under these mining claims are, in the
language of the Supreme Court, vested property and is outside the jurisdiction
of Director of Mines.  As such vested
property, they can be sold, transfered, and even
passed by descent.  A patent may now even
be issued covering these 59 claims”.

^[3]
Executive Order No. 141, “Declaring Unpatented Mining Claims Which Were
Located More Than Thirty Years Ago and Which Have Not Met the Annual Assessment
Requirement As Abandoned and their Declarations of Location
Cancelled”.  Published in 64 O.G.
No. 35, at 8811, 26 August 1968.

^[4]
109 Phil. 949 (1960)

^[5]
Id at 957

^[6]
Philippine Bill of 1902.  Sec. 36:  “xxx On each claim located after the
passage of this Act and until a patent has been named therefore, not less than
one hundred dollars’ worth of labor shall be performed, or improvements made
during each year:  PROVIDED, That upon
such failure to comply with these conditions the claim or mine upon which
failure occurred shall be opened to relocation in the same manner as if no
location of the same has ever been made, provided, that the assigned locators
their heirs, assigns, or legal representatives have not resumed work upon the
claim after failure and before such location.”

^[7]
42 Phil. 749 (1922)

^[8]
66 Phil. 259 (1938)

^[9]
Id. at 754 (Emphasis supplied)

^[10]
The relevant provisions of this Decree are as follows:

SEC. 1.  Holders of subsisting and valid patentable
mining claims, lode or placer, located under the provisions of the Act of
Congress of July 1, 1902, as amended, shall file a mining lease application therefor with the Mines Regional Director upon approval of
this Decree, and upon the filing thereof, holders of the said claims shall be
considered to have waived their rights to the issuance of mining patents therefor:  Provided,
however, That the non-filing of the application for mining lease by the holders
thereof within the period herein prescribed shall cause the forfeiture of all
his rights to the claim.

SEC. 2.  No mines temporary permit shall be required
of a holder of a patentable mining claim, lode or placer, in the extraction and
disposal of minerals taken therefrom prior to the
filing of the mining lease application therefor:  Provided, That upon the filing of the
said application, the provisions of Presidential Decree No. 463 shall apply: 
Provided, further, That patent applications already
published shall be exempted from the publication requirements of Presidential
Decree No. 463.