SAN MAURICIO MINING COMPANY, MARSMAN AND COMPANY, INC., AND PEDRO L. MOYA, PETITIONERS-APPELLANTS, VS. HONORABLE CONSTANTE A. ANCHETA, AS PRESIDING JUDGE OF BRANCH III, COURT OF…

Motion dated July 30,
1981 filed by petitioners-appellants in these cases for the
reconsideration of the decision of this Court rendered on July 10, 1981. 
Comment thereon was filed by private respondents under date of August 31, 1981 and a reply of
petitioners dated October 22, 1981
to said comment.

Acting on the foregoing pleadings, the Court studied carefully
and deliberated maturely on the following considerations:

1.  Originally, petitioners
filed the petition in G.R. No. L-17859 for review
under Republic Act 5440 only of the partial summary judgment of the trial court
of September 22, 1977 and the subsequent order of said court of November 8,
1977 for the immediate execution of its partial judgment.  As such, that appeal was purely on questions
of law.  Later, upon agreement of the
parties during the hearing on March
28, 1979, We issued an order on April 18, 1979, modifying an earlier
restraining order We had issued, by allowing the trial court to proceed with
the hearing of the whole case.  Still
later, on May 30, 1979, We resolved to permit the trial court to render judgment,
provided it should not order execution thereof.

2.  When the trial court
rendered final judgment on August 21, 1979,
petitioners herein perfected an appeal to the Court of Appeals which was
docketed therein as CA-G.R. No. 65677.

3.  Under date of December 13, 1979, respondents filed
a motion for joint consolidation and joint decision.  In other words, respondent prayed that the
Court order the elevation by the Court of Appeals to this Court of the records
of CA-G.R. No. 65677 in order that the same may be
treated by Us also as an appeal under Republic Act
5440.  In regard to this motion,
petitioners filed the following:

“COMMENT

“COME NOW the petitioners, through the undersigned counsel,
and to this Honorable Court respectfully state that they offer no objection to
the Joint Motion for Consolidation and Joint Decision, dated December 13, 1979,
filed by private respondents, as –

“1.  Undoubtedly, the main legal issues in the
instant case and in CA-G.R. No. 65677-R pending
before the Court of Appeals being the validity of:

(a)    The issuance of Original Certificate of
Title No. 0440 and, thereafter, Transfer Certificates of Title to the
respondent PHILIPPINE SMELTERS CORPORATION (SMELTERS) over lands of the public
domain, pursuant to P. D. No. 837, dated December 6, 1975, over the mineral
claims of the petitioners SAN MAURICIO MINING CO. and MARSMAN
& CO., INC. which had been duly located, staked, registered, occupied,
explored and exploited in accordance with the provisions of the Act of Congress
of the United States of America of July 1, 1902, and amendatory laws, and which
were later recognized and recorded by the Director of Mines on September 23,
1976, pursuant to Section 101 of Presidential Decree No. 463, and the
applicable judicial pronouncements in the leading cases of McDaniel v. Apacible, 42 Phil. 749; Gold Creek Mining Corp. vs.
Rodriguez, 66 Phil. 259; Salacot Mining Company v.
Rodriguez, 67 Phil. 97; Salacot Mining Company v. Abadilla, 67 Phil. 110; Bambao v.
Lednicky, L-15495, January 28, 1961, 1 SCRA 330; and Comilang v. Buendia, L-24757, October 25, 1967, 21 SCRA
468; and

“(b)   The validity and effectivity
of the Deed of Sale between the National Shipyards and Steel Corporation (NASSCO) and SMELTERS, dated December 29, 1975, marked as
Annex B to the complaint; and

“2.  That petitioners are not precluded from
raising other issues, both legal and factual, as may be pertinent for a just
consideration of the cases at bar.

“WHEREFORE, in the interest of a speedy and fair
administration of justice, petitioners hereby conform to the instant
motion.” (Pp. 754-755, Record.)

4.  While it is true that
petitioners qualified their conformity to the consolidation proposed by
respondents by stating that “petitioners are not precluded from raising
other issues, both legal and factual, etc.”, in resolving the
questions of fact We cannot but give due consideration to the findings of the
trial court sustained by substantial evidence. 
Anyway, whatever issues petitioners have claimed in their brief as well
as in their motion for reconsideration to be of fact are actually legal
questions, for all that they ask of Us is to interpret, construe or otherwise
evaluate the legal import of documents that are in the records and in this
connection.

For instance, in one portion of the trial court’s decision, it
found and held:

“5.    MARSMAN and SAN
MAURICIO contend that Proclamation 500, and for that matter P.D.
837, should be construed to respect existing private rights claiming that MARSMAN by a series of transactions had acquired existing
mining rights under the Philippine Bill of 1902.  We consider the evidence presented in
support of the claim as not competent because it does not sufficiently show how
MARSMAN or SAN MAURICIO acquired said rights.  In fact, there is no proof as to who was in
possession of the property upon the passage of the Philippine Bill of 1902 and
the successional rights thereto from 1902 to the
present.  But
assuming, however, that SAN MAURICIO, as predecessor-in-interest of MARSMAN had some interest in the land prior to 1957, that
interest was conveyed or sold by SAN MAURICIO to NASSCO
by the Contract of Sale and Assignment of Rights of 1957.  While it may be true that in 1973, NASSCO resold the same property or right of SAN MAURICIO
and the latter was succeeded thereto by MARSMAN, it
is equally true that at the time of the sale on November 23, 1973, NASSCO was merely an administrator of the property under
Proclamation No. 500, Series of 1968 and it had no authority to sell or dispose
of the land or any interest therein. 
Defendants cannot disclaim knowledge of the effects of Proclamation No.
500 and/or its provisions.  They should
know or ought to have known that on November
23, 1973 said Proclamation was still in effect, not having been
repealed and/or recalled.  The effectivity of Proclamation on said date is an indisputable
proof that the Office of the President could not have approved the supposed Sale
(Exh. C-2) for the simple reason
that a Deed of Sale or Assignment of Rights cannot repeal and/or adversely
affect a Proclamation.

“With respect to the contract of June 26, 1975 (Exh. C-8), we have already
discussed on it earlier.  The Court
believes that its findings and conclusions with respect to said contract
applies with greater force in disposing of the argument of MARSMAN
as to its right under the Philippine Bill of 1902.

“Moreover, as the Court has pointed out, the approval of the
Contract of Sale with Assignment of Rights of November 23, 1973 (Exh. C-2) by
the then Assistant Executive Secretary, Mr. Ronaldo
B. Zamora, is a forgery and no right could spring therefrom,
no obligations were created as if no contract was executed by the parties.  The contract on the other
hand, the contract of June 26, 1975 (Exh. C-8) is subject to the right of the government
to withdraw at anytime from the assignee the use of surface rights in the land
subject matter of said agreement.  This
was withdrawn by P.D. 837 when it vested in NASSCO absolute ownership of the land covered by it and
authorized NASSCO to sell or dispose of the land
either by public bidding or by negotiation, as NASSCO
did with the sale thereof to SMELTERS on December 29, 1975.” (Pp. 742-743,
Record, underscoring Ours.)

We cannot take the above conclusions of the trial court
lightly.  True it is that the matter of
whether or not the signature of Secretary Zamora was a forgery or not and
whether or not there was in fact an approval by Secretary Reyes of the 1975
document may be deemed as involving weighing of the respective evidence of the
parties, but aside from Our view expressed in Our decision as well as elsewhere
in this resolution that, at any rate, if indeed there were such approvals by
Secretaries Zamora and Reyes, the transactions purportedly sanctioned by them
are in law ultra vires.  Our own appraisal of the evidence on these
factual matters is that the same preponderates in favor of respondents’
position in regard thereto.

In the light of these considerations, and after giving due
attention and studying the arguments of the parties in the pleadings
aforementioned, the Court resolved to DENY petitioners’ motion for
reconsideration on the following grounds inter alia:

a.   That this Court took into account Appendix A
of respondent SMELTERS’ brief reading verbatim as follows:

“DEED
OF ABSOLUTE SALE

“KNOW ALL MEN BY THESE PRESENTS:

“That the SAN MAURICIO MINING COMPANY, a corporation duly
organized and existing under and by virtue of the laws of the Philippines, with
main office at Anda and Sta. Lucia Streets, Intramuros, Manila, is the owner of Twenty (20) mining
claims located on those certain Twenty (20) parcels of land with an area of One
Hundred Forty-Four Hectares and Sixty-Two (144.62), more or less, situated at
the Municipality of Jose Panganiban, Camarines Norte, the respective descriptions and boundaries
of which appear in Annex ‘A’ hereto attached and made an integral part of this
instrument;

“That the SAN MAURICIO MINING COMPANY is likewise the owner of
all the improvements erected and existing on those parcels of land wherein the
mining claims above-mentioned are found, said improvements being more
particularly itemized and described in Annex ‘B’ hereto attached and made an
integral part of this instrument;

“That the mining claims of the SAN MAURICIO MINING COMPANY
located on those parcels of land described in Annex ‘A’ hereof, as well as the
improvements erected and existing thereon itemized and described in Annex ‘B’
of this instrument are, among others, mortgaged to the REHABILITATION FINANCE
CORPORATION to secure the payment of a principal obligation amounting to ONE
MILLION FIVE HUNDRED THOUSAND PESOS (P1,500,000.00), Philippine Currency, and
the performance of other obliga­tions under the terms and conditions specified
in said Deed of Mortgage executed by the SAN MAURICIO MINING COMPANY in favor
of the REHABILITATION FINANCE CORPORATION on August 10, 1951, under faith of
Notary Public Felipe Cuaderno, Jr. of Manila and
entered as Doc. No. 164; Page No. 47; Book No. XIII, Series of 1951, of said officer’s notarial
register;

“That for and in consideration of the amount of TWO HUNDRED
THOUSAND PESOS (P200,000.00), Philippine Currency, to be paid by the NATIONAL
SHIPYARDS AND STEEL CORPORATION, a corpo­ration organized and existing under
and by virtue of the laws of the Philippines, with office at Engineer Island,
Port Area, Manila, the SAN MAURICIO MINING COMPANY, convey unto the NATIONAL
SHIPYARDS AND STEEL CORPORATION, any and all of its rights, participations,
equities and interests in and to those twenty (20) mining claims located on the
parcels of land itemized and described in Annex ‘A’ of this instrument, as well
as to all those improvements erected and existing thereon more specifically
itemized and described in Annex ‘B’ hereof;

“It is a specific condition of this instrument that the
consideration of TWO HUNDRED THOUSAND PESOS (P200,000.00), Philippine Currency,
will be paid to the REHABILITATION FINANCE CORPORATION against a corresponding
deduction of an equivalent amount from the indebtedness of the SAN MAURICIO
MINING COMPANY to the REHABILITATION FINANCE CORPORATION which is secured by
the Deed of Mortgage above recited.

“It is further a condition of this instrument that upon the
payment to the REHABILITATION FINANCE CORPORATION of the amount of TWO HUNDRED
THOUSAND PESOS (P200,000.00), the REHABILITATION
FINANCE CORPORATION will release the mining claims located on those parcels of
land described in Annex ‘A’ as well as the improvements erected and existing
thereon itemized and described in Annex ‘B’ hereof, from the mortgage
liability.

“The SAN MAURICIO MINING COMPANY shall forthwith, after such
payment by the NATIONAL SHIPYARDS AND STEEL CORPORATION and release by the
REHABILITATION FINANCE CORPORATION, waive unto and in favor of the NATIONAL
SHIPYARDS AND STEEL CORPORATION any and all of its rights, title and interests
in and to those Twenty (20) mining claims located on the parcels of land
described in Annex ‘A’ as well as those buildings and improvements recited in
Annex ‘B’ hereof.

“IN TRUTH WHEREOF, A. L. Velilla and
F. H. Burgess, Director and Secretary and Treasurer, respectively, of the SAN
MAURICIO MINING COMPANY, duly authorized to represent said company for this
purpose, have hereunto signed this instrument on this 19th day of November,
1957, at Manila, Philippines.

SAN
MAURICIO MINING

COMPANY

(VENDOR)

By:

(SIGNED)

A.L.
VELILLA

Director and Secretary

F.
H. BURGESS

Treasurer

SIGNED IN THE PRESENCE OF:

(SGD.)
ILLEGIBLE

(SGD.)
ILLEGIBLE

“A
C K N O W L E D G M E N T

REPUBLIC OF THE PHILIPPINES) S.S.

CITY OF MANILA    )

“Before me, a notary public in and for the
City of Manila, personally appeared on this 19th day of November, 1957, A. L. Velilla with Residence Certificate No. A-0113642,
issued at Manila on January 18, 1957, and F. H. Burgess
with Residence Certificate No. A-0188950, issued at Manila on January 22, 1957,
in their capacities as Director and Secretary and Treasurer, respectively, of
San Mauricio Mining Company, the vendor herein, to me known and known to me to
be the same persons who executed the foregoing Deed of Absolute Sale and who
acknowledged to me that they did so as their free and voluntary act and deed as
well as the free and voluntary act and deed of the corporation they represent
they being duly authorized so to do for the uses and purposes therein
mentioned.

“WITNESS my hand and the official seal on the date and at the
place first above-mentioned.

(SGD.) MELCHOR
R. FLORES

Notary Public

Until December 31, 1958″

cannot
constitute a denial neither of due process nor of an opportunity on the part of
petitioners to be heard as to the true import thereof.

(1)   The document in question was petitioners’
main actionable document to bolster their defense that therein or together
therewith there was a collateral agreement that NASSCO
would resell “surface” rights to them.  Accordingly, the bringing out of the said
document by any party at any later stage of the proceedings could not have
caught petitioners by surprise.  Indeed,
under the rules, petitioners should have attached the same to their
answer.  (Section 7, Rule 8) Instead, in
an allegation which, to put it mildly, could mislead any court, in paragraph
XXVIII of their answer they alleged, in relation to the deed of November 19,
1957 in question, the following:

“That on November 19, 1957, defendant SAN MAURICIO MINING
COMPANY executed in favor of NASSCO a Deed of
Absolute Sale of the surface rights over 144.62 hectares of land covering
its twenty mineral claims in Jose Panganiban, Camarines Norte, together with all the improvements
thereon, subject to a collateral understanding between them to the effect that
when NASSCO stops the operation of the smelting plant
thereon, or, abandons the site, SAN MAURICIO would have the first option to
reacquire from NASSCO the surface rights over its
said mineral claims and all the improvements thereon.” (Underscoring Ours)

thereby referring very distinctly and
definitely to the object of the
transaction as only “surface rights“, when the naked truth is
that the text of the agreement, as can be read above does not even mention
surface rights anywhere within its four corners.

If, as petitioners now contend, they could have shown at the
trial that the said document did not express the true intent and agree­ment of
the parties they should have made such allegation then, were they really candid
with the court.  Under the parol evidence rule, such allegation of failure of a
document to express the true intent of the parties must be alleged in the
pleadings as an indispensable predicate for the presentation of any evidence to
such effect.  And it is not sufficient
excuse for the omission of petitioners to make such allegation in their answer
that in its own complaint Smelters pre­mised its causes of action on the deeds
of November 23, 1973 (Exh. C-2) and June 26, 1975 (Exh. C-8) therein referred to,
for evidently, as We understand respondent’s theory in its complaint, the reference
to said later documents was made only as premise in order to attack their
intrinsic legal import in the light of Proclamation 500 and Presidential Decree
837, and, alternatively, albeit hypothetically, to invoke the right of the
government therein to withdraw what had been reconveyed
to petitioners by NASSCO thereunder.

Certainly, the essence of denial of due process cannot contemplate
a situation wherein the party who has knowledge of and holds a document that
would bring out the truth as to a given situation withholds such document,
whether as a matter of forensic strategy or bad faith.  Due process is no more than the indispensability
of fairness and opportunity to be heard. 
Understandably then, it cannot be pretended that there has been denial
thereof in a situation where precisely, as a matter of candidness and honesty
to the court, the party claiming
to be aggrieved is the one who for tactical reasons or otherwise is the one
guilty of not disclosing to the court the vital document that contains the most
conclusive evidence regarding the matter in dispute.

(2)   As held in Our decision, it is to Us, at most
of only secondary significance to dwell on the issue of whether or not the said
1973 and 1975 documents were approved by the Office of the President, albeit
Our appraisal of the evidence, with due respect to the arguments of
distinguished counsel of petitioners, that Secretary Ronaldo
Zamora’s signature is a forgery and the alleged approval supposedly signed by
Secretary Roberto Reyes has not been satisfactorily proven.  And truth to tell, We
are in the dark as to how those latter documents came to mention “surface
rights”.  The only explanation We
could gather from the record, and in the absence of direct evidence on the part
of peti­tioners that the 1957 document did not intend to mean what it says, is
that the government officials who took part in the preparation of the 1973 and
1975 documents invoked by petitioners acted on the basis of an erroneous
assumption, which error cannot in law bind the state on a matter adversely
affecting the proprietary rights of the government.

(3)   To Our mind, the contention of petitioners’
counsel that the subsequent acts of NASSCO prove the
failure of the 1957 document to express the true intent of the parties cannot
be better supported in a new trial, since under the provisions of Proclamation
500, NASSCO was a mere administrator of the
properties in question and any actuation thereof bartering away the rights of the
state under the clear terms of the 1957 document cannot be but ultra vires, if not erroneous, hence not binding on the
government and people of the Philippines.

(4)   Indeed, it may be noted that seemingly,
Smelters’ position in the latter stages of the proceedings appear rather
variant from the allegations in its complaint, but We are not told and We have
not found in the record any indication that such change or alteration, if there
was in essence any, of Smelters’ fundamental causes of action, was ever
objected to by petitioners, so much so that when, quite unnecessarily (from the
point of view of Section 5 of Rule 10 providing that “failure to so amend
does not affect the result of the trial of these issues”), respondent
filed a motion to amend its complaint in order to make a portion thereof conform with the evidence it had unopposedly
offered, no wonder said motion for such amendment was allowed.

(5)   As to the prayer that these cases be referred
to the Court en banc on the ground that a question of unconstitutionality
is involved, it is quite clear, as We have already explained, that the factual
premises for the attack on constitutional grounds has not been established by
petitioners.  In other words, Our conclusions
of fact that the properties in question, including the mines, were acquired by NASSCO on November 19, 1957 and was never reacquired
validly by petitioners leads necessarily to the conclusion that P.D. 837 does not deprive the petitioners of any property
at all.  In other words, the premise for
the issue of whether or not P.D. 837 is
unconstitutional to arise has not been established.

The long and short of the merits of these cases is that
petitioners would want Us to hold, without complying with the prerequisites of
the rule on pleadings on the point, and without convincing evidence before Us
or any that they could possibly present in a new trial,^[1]
that Presidential Decree No. 837 deprives them of property without due process
of law.  Indeed, there would have been
such deprivation, if from the evidence on record it appeared convincingly that
the properties in dispute were still owned by petitioners when P.D. 837 was issued. 
But as We have found and explained above, such
is not the fact.  By the Deed of Absolute
Sale of November 19, 1957,
petitioners sold their mining rights to NASSCO.  Petitioners omitted to allege and prove at
the trial that said document did not mean what it says.  And now, on the basis of subsequent
actuations of officials which We hold to be ultra vires, petitioners claim the said
properties were reconveyed to them.  Verily, petitioners have the right to contend
and argue that their evidence proves their position, but We
reject any attempt to impose upon this Court a theory that is plainly wanting
in basis under the rules of pleading and evidence.  The resort to the basic principle of right to
be heard and denial of due process, as We have already
ex­plained, lacks basis.  As We see it, petitioners are now trying desperately to make it
appear that legally the production of the Deed of Absolute Sale of November 19, 1957 which reveals what
really was acquired by NASSCO thereunder
was only surface rights was incum­bent upon Smelters.  We cannot agree.  Without necessarily accusing petitioners of
bad faith, it is to Our mind indisputable that even dis­regarding the rule on
actionable documents, if only as a matter of fair play and placing all cards on the table without any hidden
ace, petitioners should have revealed to the trial court said document by
properly attaching or copying the same in their answer, with the appropriate
allegation, if such is indeed what happened, that the same failed to express
the real intent of the parties, and thereafter supporting such allegation by
competent evidence.  It is too late in
the day now to correct that omission by beclouding the issue with an invocation
of denial of an opportunity to be heard, which, to be sure, they were the ones
who refrained to avail of such opportunity to themselves for reasons of their
own.

Premises considered, the subject motion for reconsideration of
petitioners is hereby DENIED for lack of merit, and if the Court has taken
pains in this resolution to once more discuss the same issues already raised
before Our decision was rendered, it is only to place said decision in clearer
light and to set aright, if possible, petitioners’ perspectives in regard
thereto.

This denial is FINAL.

Concepcion, Jr., Abad
Santos, and De Castro, JJ., concur.

Aquino, J., did not take part.

Fernandez, J., was designated
to sit in the Second Division.

^[1]
A careful reading of petitioners’ brief and motion for reconsideration and
rejoinder indicates that they rely mostly on documents already in evidence and
which We say are ultra vires, hence
no amount of supposed admissions of Smelters or Nassco
in regard thereto can in law improve their invalidity and inefficacy, the
object or subject matter in issue herein being portions of the public domain.