GREENHILLS MINING COMPANY, PETITIONER, VS. OFFICE OF THE PRESIDENT, MINISTER OF NATURAL RESOURCES, DIRECTOR OF THE BUREAU OF MINES AND GEO-SCIENCES, AND GREEN VALLEY COMPANY, RE…

The instant petition seeks the review of (a) the decision dated
July 8, 1986 issued by respondent Office of the President and signed by Deputy
Executive Secretary Fulgencio S. Factoran,
Jr., declaring all mining claims located and registered within the Southern Zambales Forest Reserve as null and void and granting
private respondent Green Valley Company preferential right to possess, exploit,
develop and operate the area covered by its exploration permit, and (b) the
order dated September 10, 1986 denying petitioner’s motion for reconsideration.

The facts are as follows:

The petition involves a conflict of Greenhills
mining claims and the exploration permit of Green
Valley over an area within the
Southern Zambales Forest Reserve and within the same
mineral land.

Mining claims of different claimowners
were previously located and registered with the office of the Mining Recorder
at Iba, Zambales, in 1933
and 1934 under the provisions of the Philippine Bill of 1902. However, for
failure to pursue their claims and to perform annual assessment works, the
claims were considered abandoned.

On January 18, 1956,
then President Ramon Magsaysay issued Proclamation
No. 245 establishing the Southern Zambales Forest
Reserve (hereinafter called “Reservation” for brevity) with an area
of 37,000 hectares embracing the municipalities of San Marcelino
and Castillejos for soil protection, timber
production, and other forest purposes subject to existing private rights.

In 1970 and 1971, Greenhills relocated
the previously abandoned mining claims of the claimowners
inside the reservation. It executed certificates or declaration of location
(DOL) covering 113 claims and registered them with the office of the Mining
Recorder. Lode Lease Applications (LLAs) on the 113
claims were later filed with the Bureau of Mines. Boundary survey plans or
returns for the 113 claims were submitted and approved by the Mines Director on
October 27, 1971, and
together with lease applications they were published in the Official Gazette
and in newspapers of general circulation.

On September 5, 1975, Greenhills filed
with the Bureau of Forest Development (BFD for brevity) an application for
prospecting permit (Prospecting Permit No. 354-03079) covering 1,296 hectares
within the reservation, which was granted by the BFD Director on January 5,
1978 to expire six months thereafter or on June 5, 1978.

On March 1, 1979
Green Valley
applied with BFD for a prospecting permit over 4,800 hectares also within the
reservation. BFD granted the permit (Prospecting Permit No. 349-03179) to
expire on August 31, 1979.
It was extended to January 31, 1980.

On July 19, 1979
Green Valley
filed with the Bureau of Mines and Geo-Sciences (BMGS for brevity) an
application for exploration permit over the same area covered by its prospecting
permit, as well as additional areas covered by prospecting permits issued to Concepcion Lomotan, Dolores Montilla and Asuncion Caguios.

The application was referred to the BMGS Mineral Lands and
Topographic Survey Division (MLTSD) which upon verification submitted reports
dated August 17, 1979 and October 4, 1979 with the finding that the areas
applied for by Green Valley were in conflict with the Greenhills
group of claims.

In another report dated September 10, 1979, the Mineral Resources
Administrative Division also of the Bureau of Mines commented that Green
Valley’s exploration permit may be given due course contending that all mining
claims in areas within the reserve are null and void pursuant to Section 28
(a), Commonwealth Act No. 137.^[1]

On October 16 and November
29, 1979, respectively, Green
Valley’s exploration permits
(Exploration Permit Nos. 79 and 80) covering 5,208.96 hectares were approved.

Aggrieved, Greenhills filed separate
letter—protests with the BFD and BMGS asking for the cancellation of Green
Valley’s prospecting and
exploration permits.

In answer to Greenhills‘ protest, Green
Valley countered that the protest had become moot and academic and it has no
factual and legal basis since the alleged prospecting Permit No. 354-03079 of Greenhills Mining Co., which was the basis of its protest
had long expired and at the time Green Valley Co. applied for and was issued
Prospecting Permit No. 439-83179, the area was open for registration; that said
prospecting permit had been replaced by Exploration Permit Nos. 79 and 80
issued by the Bureau of Mines and Geo-Sciences on October 16, 1979 and November
29, 1979, respectively; that the Bureau of Forestry was no longer the proper
forum; that the subject matter of the protest concerned the validity of mining
claims and should be filed with the proper forum

Supporting Greenhills‘ protest, Lepanto Consolidated Mining Co, which operates Greenhills Mining claims in its letters dated May 4 and May
20, 1981 manifested that the mining claims of Greenhills
were excluded from Green Valley’s prospecting permit for the reasons that: (1)
the areas covered by the mining claims of Greenhills
were previously covered by patentable mining claims duly located and registered
by different mining claimowners in 1933 and 1934
under the Philipine Bill of 1902; (2) that pursuant
to the ruling of the Supreme Court in McDaniel vs. Apacible,^[2]
reservation of public lands cannot be made to include prior perfected mining
locations and therefore the areas covered by Greenhills
mining claims should be deemed segregated from the mass of the public domain
which were open to relocation and registration; (3) that Greenhills
mining claims had been surveyed and survey plans approved and the lease
applications published in 1971 and 1973.

On June 5, 1981,
the Director of the BFD issued an order directing amendment of Green
Valley’s prospecting permit to
exclude areas previously located and registered patentable mining claims as
appearing in a sketch plan issued by the BMGS.

In a letter dated June 9,
1981 to the BMGS, Greenhills reiterated
its request to exclude from Green Valley’s
exploration permit area covered by its mining claims. On June 11, 1981, the Director of the Bureau of
Mines issued the following order, the dispositive
portion of which read:

“PREMISES CONSIDERED, Exploration Permit No. 79 issued in
favor of Green Valley Company on October
16, 1979 should be, as hereby it is, AMENDED to exclude therefrom the area covered by previously located and
registered patentable mining claims as appearing in the sketch plan, likewise
made integral part of this Order.”

Against the BFD and the BMGS orders, Green
Valley filed an appeal to the
Ministry of Natural Resources (MNR).

On July 23, 1981,
the MNR held that since the cases involved the determination of the mining
rights of the parties concerned over the disputed area, the investigation and
resolution of these issues were within the original jurisdiction of the Bureau
of Mines and Geo-Sciences. Accordingly, it set aside the order of BFD dated June 5, 1981 and the order of BMGS
dated June 11, 1981.

Unsatisfied, Green Valley
filed an appeal with the Office of the President assailing MNR’s
refusal to rule on the validity of the mining claims of Greenhills.
It faults MNR for remanding the case to the Bureau of Mines in deference to the
latter’s original jurisdiction to resolve and decide the mining rights of the
parties and to investigate and determine if there was any conflict or
overlapping over the parties’ mining claims/permit.

On July 6, 1986,
the Office of the President rendered the decision in question, the dispositive portion of which inter alia
read as follows:

“PREMISES CONSIDERED, the order of the Minister of Natural
Resources dated July 23, 1981,
is hereby affirmed.

“Further, all mining claims within the Southern Zambales Forest Reserve located and registered by the Greenhills Mining Company in violation of section 28(a) of
C.A. No. 137, as amended, are hereby declared null and void. The Green Valley
Company is given the preferential right to possess, exploit, explore, develop
and operate the areas within the Southern Zambales
Forest Reserve covered by Exploration Permit No. 79 issued in its name on October 16, 1979.”

A motion to reconsider the decision filed by Greenhills
was denied on September 10, 1986.
Hence, the present petition.

Petitioner alleges that: (a) mining claims located under the
Philippine Bill of 1902 which were later on abandoned or forfeited by the
original locators could be the subject of relocation by another person; (b) the
reservation of public lands such as the Southern Zambales
Forest Reserve established under Proclamation No. 245 dated January 18, 1956,
cannot be deemed to include areas previously covered by a valid mining
location; (c) the Bureau of Mines and Geo-Sciences, basing its plottings on certified declaration of locations filed in
1933 and 1934, correctly ordered the exclusion from the Exploration Permit No.
79 of respondent Green Valley the areas covered by previously located and
registered patentable mining claims; (d) Greenhills
has valid claims being the relocator of the 1933 and
1934 patentable mining claims; (e) questions concerning the validity of
petitioner Greenhills‘ mining claims are already
barred by statute; and (f) the “Exploration Agreement with assignable
Option to Purchase” executed by and between respondent Green Valley
Company and Gold Fields Asia Limited violates Section 9, Article XIV of the
1973 Constitution, since the agreement is not a “service contract”
within the contemplation of said constitutional provision. Petitioner prays,
among other things, that a preliminary injunction issue enjoining respondent
Director of the Bureau of Mines and Geo-Sciences from acting on the application
for renewal of the exploration permit of respondent Green
Valley.

The Court, in its resolution dated November 12, 1986, issued a temporary restraining order
enjoining respondent Director of Bureau of Mines and Geo-Sciences from acting
on the application for the renewal of the exploration permit of respondent
Green Valley Company covering the areas involved.

The established doctrine that where there is no showing of fraud,
collusion, arbitrariness, illegality, imposition or mistake on the part of the
Office of the President or a department head (such as the Secretary of
Agriculture and Natural Resources in the present case), in rendering their
questioned decisions or of a total lack of substantial evidence to support the
same, such administrative decisions are entitled to great weight and respect
and will not be interfered with by the courts.^[3]

In upholding Green Valley’s
prior right over the mining areas subject of conflicting claims, the Office of
the President rightly relied on the provisions of Section 28(a) of Commonwealth
Act No. 137 (now Section 13(a), Presidential Decree No. 463). Under this
provision, and under the regulations implementing it, it is required that the lessor shall, first, secure a prospecting permit from the
BFD and second, obtain an exploration permit in case of discovery of minerals
in the area or when there is strong proof of mineralization. The records show
that the petitioner’s mining claims were backed up by no prospecting permit.

On the other hand, Breen
Valley had fully complied with such
requirements, for which its claims should be declared superior.

As a general rule, the findings of government agencies with
respect to the construction of statutes the implementation of which has been
reposed in them, are controlling on the Court.

The cases of McDaniel v. Apacible,^[4] Gold
Creek Mining Corporation v. Rodriguez,^[5]
and Salacot Mining Company v. Abadilla,^[6]
relied upon by the petitioner, and where we held that the appropriation of a
mineral land pursuant to a valid claim segregates it from the public domain,
are not in point. The petitioner assumes that the claims of other claimants
recorded in 1933 and 1934 were still valid when the Southern Zambales Forest Reservation was established in 1956.
According to the Office of the President, however, the original claimowners had failed to perform annual development work
on the claims in violation of the provisions of Section 36 of the Philippine
Bill of 1902. As a consequence, the area became “open to relocation… as
if no location of the same had ever been made.”^[7]
Conversely, assuming that the government lost the property when the petitioner,
or the original claimowners staked their claims in
1933 and 1934, it reverted to the public dominion upon abandonment thereof.
Accordingly, when President Magsaysay established the
Southern Zambales Forest Reserve in 1956, the areas
covered by the said abandoned claims already formed part of the public domain.
The petitioner cannot, moreover, claim privity of
title with the owners of the prior locations. Such prior locations had been
abandoned, or at most, forfeited, and the petitioner’s own location cannot be
considered a continuation thereof.

WHEREFORE, the
petition is DISMISSED. The temporary restraining order issued on November 12, 1986 is hereby lifted.
No pronouncement as to costs.

Melencio-Herrera, Paras,
Padilla, and Sarmiento, JJ., concur.

^[1]
Now Section 13 of PD 463, dated May
17, 1974, which provides inter alia
that no prospecting permit shall be allowed in mineral and other reservations
proclaimed closed to mining locations except by the government.

^[2]
42 Phil. 749.

^[3] Lacuesta v. Herrera, G.R. No. 33646, January 28, 1975, 62 SCRA 115.

^[4]
42 Phil. 749 (1922).

^[5]
66 Phil. 259 (1938).

^[6]
67 Phil. 110 (1939).

^[7]
Philippine Bill of 1902, Sec. 36.