STANDARD MINERAL PRODUCTS, INC., PETITIONER, VS. THE HON. COURT OF APPEALS, RUFINO DEEUNHONG, PAZ SUMULONG-TANJUATCO AND EMIGDIO G. TANJUATCO, RESPONDENTS, REPUBLIC OF THE PHILI…

Standard Mineral Products versus Deeunhong

The Case

This is a petition for review on certiorari brought by Standard Mineral Products, Incorporated against Rufino Deeunhong, Paz Sumulong-Tanjuatco, and Emigdio Tanjuatco, with the Republic of the Philippines intervening. Standard Mineral Products claims to be the locator of two placer mining claims containing limestone, and it asks the Court to compel the landowners to give it surface rights and a right of way over a portion of their private property. The landowners resist, saying the company entered their land and located its claims without their prior written permission. The case matters because it fixes the rule that a mining locator who trespasses on private land acquires no right that the courts will protect, however rich the mineral deposit may be.

Procedural History

Standard Mineral Products filed its action for surface rights and a right of way in the Court of First Instance of Rizal. The trial court dismissed the complaint, holding that the mineral claims were not located in accordance with law, and on the counterclaim ordered the company to pay each landowner actual damages, attorney's fees, and costs. The Court of Appeals affirmed the dismissal but modified the award, substituting temperate or moderate damages for actual damages. The appellate court also denied, for lack of legal interest, the Republic's petition for intervention, which was grounded on a pending reversion case over the same property. Standard Mineral Products then elevated the matter to the Supreme Court by petition for review on certiorari, and the Supreme Court allowed the Republic to intervene. Because the reversion case was closely interrelated, the Court held this case in abeyance, later archived it, and revived it only after the reversion case was finally decided against the Republic, with the land declared essentially agricultural and not mineral land. Ownership having been settled, the controversy became ripe for determination.

Facts

Standard Mineral Products located placer mining claims known as Celia IV and Celia VI, containing limestone, in Kaysipot, Antipolo, Rizal, and registered them with the Office of the Mining Recorder of Rizal in April and July of 1959. The claims cover about fifteen hectares of a one hundred twenty hectare property registered in the name of Rufino Deeunhong. Although title stood in his name alone, he and the Tanjuatco spouses were co-owners in undivided equal shares, as shown by an acknowledgment of trust.

After locating the claims, the company applied for a mining lease from the Bureau of Mines in May 1959. The landowners opposed the application, complaining that the company had entered their land and filed its application without their permission. The Bureau held the application in abeyance pending submission of the surface owners' permission, and no agreement was ever reached.

In December 1965 the company sued in the Court of First Instance of Rizal, praying for surface rights over the fifteen hectares and a right of way over five hectares leading to the claims. The landowners answered that the prospecting was done without their prior written permission as required by the Mining Act. Both lower courts found that the company knew the land was privately owned, and that its claims were not located in accordance with law.

Issues

• Whether or not Standard Mineral Products is entitled to surface rights and a right of way over the portion of the landowners' property covered by its mining claims.
• Whether or not the trial court and the Court of Appeals had jurisdiction over the controversy, in light of the provision of the Mining Act vesting the Director of Mines with authority over conflicts and disputes arising out of mining locations.

Applicable Provisions

Section 27 of the Mining Act provides:

Section 27. Before entering private lands the prospector shall first apply in writing for written permission of the private owner, claimant, or holder thereof, and in case of refusal by such private owner, claimant, or holder to grant such permission, or in case of disagreement as to the amount of compensation to be paid for such privilege of prospecting therein, the amount of such compensation shall be fixed by agreement among the prospector, the Director of the Bureau of Mines and the surface owner, and in case of their failure to unanimously agree as to the amount of compensation, all questions at issue shall be determined by the Court of First Instance of the province in which said lands are situated in an action instituted for the purpose by the prospector, or his principal: Provided, however, that the prospector, or his principal upon depositing with the court the sum considered jointly by him and the Director of the Bureau of Mines and the court to be just compensation for the damages resulting from such prospecting, shall be permitted to enter upon, and locate the said land without such written permission pending final adjudication of the amount of such compensation; and in such case the prospector, or his principal, shall have a prior right as against the world, from the date of his application. The court in its final judgment, besides determining the corresponding compensation of the damages which may be caused by the prospecting, shall make a pronouncement as to the value and the reasonable rental for the occupation and utilization thereof for mining purposes in case the prospector decides to locate and exploit the minerals found therein.

This is the very provision the company failed to comply with, and it supplies the condition precedent whose omission defeats its claim.

Section 67 of the Mining Act provides:

Section 67. Any person authorized to locate a mining claim, having claimed and located a piece of land for mining purposes who has complied with the terms of this Act, may file with the Director of the Bureau of Mines an application under oath for a mining lease thereon, showing such compliance. In the case of an application to lease a mining claim located on private lands, the same shall be accompanied by a written authority of the owners of the land: Provided, however, that in case of refusal of the owner of the land to grant such written authority, the same shall be granted by the court as soon as the applicant deposits the amount fixed as the value of the land and as compensation for any resulting damage or file a bond to be approved by the court sufficient to insure the payment of the rental of the land as determined in accordance with section twenty seven of this Act. Should there have been no proceeding instituted by the applicant as provided for under section twenty-seven of this Act, the court shall determine the value of the land and the compensation for any resulting damage or its reasonable rental for the purposes above mentioned and grant the written authority required herein.

This provision shows that even the lease remedy presupposes compliance with the Act and a written authority from the landowners, which the company never obtained.

Section 61 of the Mining Act provides:

Section 61. Conflicts and disputes arising out of mining locations shall be submitted to the Director of Mines for decision; Provided, That the decision or order of the Director of Mines may be appealed to the Secretary of Agriculture and Natural Resources within thirty days from receipt of such decision or order. In case any one of the parties should disagree with the decision or order of the Secretary of Agriculture and Natural Resources, the matter may be taken to the Court of Appeals or the Supreme Court, as the case may be, within thirty days from the receipt of such decision or order, otherwise the said decision or order shall be final and binding upon the parties concerned. Findings of facts in the decision or order of the Director of Mines when affirmed by the Secretary of Agriculture and Natural Resources shall be final and conclusive, and the aggrieved party or parties desiring to appeal from such decision or order shall file in the Supreme Court a petition for review wherein only questions of law may be raised.

The company invoked this provision to attack the jurisdiction of the regular courts, but the Court held it inapplicable because the dispute is not a mining conflict.

Ruling

On the first issue, the Court ruled that the company is not entitled to surface rights or a right of way. Section 27 requires prior written permission from the private owner before entering private land, and its purpose is to prevent trespass on private property. The company's argument that it never needed to enter for prospecting because the limestone was visibly exposed on the surface was rejected. Entering must precede prospecting, prospecting must precede discovery, and a valid discovery is essential to a valid location of a mining claim. Since the prospecting was done in violation of law, the subsequent location was illegal and void. The Court also held that the company's constitutional and statutory rights to exploit mineral resources never matured, because under the Regalian doctrine minerals belong to the State, but the prospecting, exploration, discovery, and location must still be done in accordance with law, and that is a condition sine qua non, a condition without which the right does not arise. To grant surface rights would be to countenance an illegal trespass.

On the second issue, the Court ruled that the lower courts had jurisdiction. Section 61 speaks of conflicts and disputes arising out of mining locations, which is not the subject matter here. The basic issue is entitlement to surface rights and a right of way, and the validity of those rights was squarely put in issue. The dispute is essentially judicial. Moreover, the company filed the action, actively participated in the hearings, and raised jurisdiction only after an adverse judgment, so it is estopped from impugning that jurisdiction.

Doctrine

A prospector who enters private land without the prior written permission of the surface owner violates Section 27 of the Mining Act, and the location of a mining claim founded on that trespass is illegal and void. Entering precedes prospecting, prospecting precedes discovery, and a valid discovery is indispensable to a valid location. Under the Regalian doctrine minerals belong to the State, but the right to exploit them matures only upon compliance with the law, which is a condition sine qua non. Finally, a dispute over surface rights is essentially judicial and falls within the regular courts, not the Director of Mines under Section 61, and a party who invokes a court's jurisdiction and loses cannot later repudiate it.

Disposition

The Court affirmed the judgment of the Court of Appeals in all other respects, modifying only the award of temperate damages, which it reduced to ten thousand pesos for Deeunhong and another ten thousand pesos for the Tanjuatcos, with no costs.

Remember This

Memorize the chain: no written permission, no valid entry; no valid entry, no valid prospecting; no valid prospecting, no valid discovery; no valid discovery, no valid mining location. Examiners use this case to test the requisites for locating mining claims on private land under Section 27 of the Mining Act, the limits of the Regalian doctrine, and the rule on estoppel by laches against a party who belatedly questions jurisdiction.