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…

“3.  With
the foregoing factual conclusion it follows that defendants SAN MAURICIO
and MARSMAN had not acquired a valid and legal title to the property in
litigation under the aforesaid Deed of Sale with Assignment of Rights (Exh. C-2).

“4.  NASSCO had no authority to sell or assign its
rights much less execute the document of June 26, 1975.  The
Deed of Assignment of Rights executed by NASSCO in favor of defendants SAN
MAURICIO and MARSMAN dated June 26,
1975 (Exh. C-7) is inofficious to say the
least.  This is so because at the time
the property subject matter thereof belonged to the public domain by virtue of
Proc­lamation No. 500 which reserved the property for pier, warehouse and smelting plant site purposes for NASSCO
under the administration of NASSCO. 
NASSCO was not then the owner of
the property.  As administrator of
the property, NASSCO was without authority to sell, encumber, convey or
otherwise alienate any part of the public domain.  MARSMAN and SAN MAURICIO should have known
this matter, or they ought to
have known it.

“While among the documents presented with the notice of adverse claims is a true copy of the first
endorsement of July 1, 1975 purportedly signed by authority of the President by
Mr. Roberto B. Reyes, Deputy Executive Secretary, the document is not even
authenticated and no evidence was presented to establish the existence of said
document.  It is worth mentioning that
when Mr. Melquiades dela
Cruz, Presidential Staff Director of Malacañang,
testified no mention whatsoever with reference to the document was made.  On the contrary SMELTERS presented a
certification issued by the same officer. 
Mr. dela Cruz, stating that the supposed
endorsement of the Deputy Executive Secretary, Mr. Roberto B. Reyes of July 5,
1975 is not on file in the
Office of the President (Exh. R).  The above circumstance has created serious doubt in the mind of the Court as to the authenticity of said document.  It is
settled rule that the Party who makes an affirmative allegation in his
pleadings has the burden of
proof to prove it.  It is incumbent upon MARSMAN or SAN
MAURICIO to present credible evidence of its existence.  In this particular instance they failed to do
so.

“Moreover, on the hypothesis that the first endorsement on
July 1, 1975 exists and the Assignment of Rights of June 26, 1975 made by NASSCO in favor of MARSMAN was approved by the Office of the President, the approval thereof as it appears on the face of said endorsement is subject
to two (2) conditions:

”1.  That the government reserved the right to
withdraw anytime the use of the surface right from the assignee as public
interest may so require as may be determined by the President pursuant to the content of Proclamation No. 500,
Series of 1968.

“2.  That the assignee shall not obstruct in any
way the free movements of personnel and equipment of the Armed Forces of the
Philippines and their continuous use of NASSCO facilities thereat as previously
authorized by the President.

“The first condition imposed with the approval of the contract
of June 26, 1975 (Exh. C-8) is the right of the government to withdraw at
anytime the use of the surface rights from the assignee, that was MARSMAN, if
the public interest requires it in accordance with the context of Presidential
Proclamation No, 500, Series of 1968. 
Precisely, under said Proclamation the land therein reserved was
withdrawn from sale or settlement.  If
the right to use surface rights
under the Assignment of Rights in favor of MARSMAN (Exh.
C-8) is to be construed, it should be in harmony with the provisions of said Proclamation No. 500 and with
P.D. 837, a later law, issued on
December 6, 1975.  Under said Presidential Decree, title to and
ownership of the land now in litigation was vested in favor of NASSCO (when
originally was only under the administration of NASSCO under Proclamation 500) and the decree further granted NASSCO the
authority to sell or dispose of the land as the interest of the government
warrants either by bidding or negotiation.  Thus, with the issuance of P.D. 837, the
right of MARSMAN as assignee to use the surface rights should be deemed
terminated with the sale of the land to SMELTERS on December 29, 1975 when SMELTERS acquired full and complete
ownership of the property without any lien or encumbrance whatsoever.

“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 to 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.

“6.  There seems to be no question that under P.D.
837, NASSCO was the owner of the property, later covered by Original
Certificate of Title No. 0440.  This is
unmistakable, for it is clearly stated therein. 
The government had transferred ownership of the land therein described,
formerly as part of the public domain, in favor of NASSCO, even before a title
thereto was issued.  There should also be
no debate that under the same decree NASSCO was given authority to transfer
absolute ownership of said parcel of land or any portion thereof and convey the
same to persons or corporations qualified to acquire land under the Constitution.

“The above is what happened in this case.  After the Bureau of Land had resurveyed the
property, determined each area
and boundaries, completed the plan and technical descriptions, the Register of
Deeds issued in favor of NASSCO Original Certificate of Title No. 0440 which
became the absolute owner of the land. 
Then NASSCO sold by negotiation the same land in favor of SMELTERS.  The acts of NASSCO are exactly what the
Presidential Decree authorized to be done.

“7.  It is now claimed by defendants that the price
of P85,144.50 is immoral, illegal and unconscionable.  Obviously, defendants overlooked the
environmental circumstances that prompted NASSCO to dispose of the
property.  As testified to by Assemblyman
Arturo F. Pacificador, then Chairman of NASSCO, there
is a basic
national policy involved
in the transaction.

“It is indubitable that the government as a matter of national
policy was committed in allowing the private sector to take over the
enterprises pioneered by the government when the private sector is capable
already and ready to improve a particular government endeavor.  It is also clear that the government wanted
to discontinue the operation of NASSCO, particularly with reference to the Jose
Panganiban Smelting Plant and to facilitate the
disposition of the assets of NASSCO, including the plant the government considered
it necessary to transfer ownership of said parcel of land to NASSCO so that
NASSCO may ultimately transfer absolute ownership of said parcel of land or any
portion thereof and convey the same to persons or corporations qualified to
acquire land under the Constitution, either through public bidding or
negotiation as the interest of the government warrants.  To the Court, it is unmistakable that in
pursuance of the policy of the national government established in P. D. 837, the property of NASSCO at Jose Panganiban had to be sold to the private sector who shall
take over the enterprises pioneered by the government.  It was precisely what had happened with the
sale of the smelting plant and the land at Jose Panganiban
by NASSCO to SMELTERS.

“In fact, the Deed of Sale itself of December 29, 1975 (Exh.
D) recites the fundamental considerations that motivated the transaction.  It states:

‘WHEREAS, the Government of the Republic of the Philippines
considers the establishment, development and operation of an integrated steel
industry in the Philippines
as of primary importance in the
economic development of the country;

‘WHEREAS, for the successful implementation of the aforementioned
objective, the Government of the Republic of the Philippines deemed it proper
and necessary to provide appropriate incentives to adequately motivate the
private sector to invest in the integrated steel industry, which investment
involves a long-term risk exposure;

‘WHEREAS, the Government of the Republic of the Philippines
considers the assurance or grant to the capable segments of the sector of a
permanent tenure over the land where the integrated steel industry facilitates
are or may be established as one of the appropriate and necessary incentives to
motivate the private sector in undertaking this investment with a long-term
exposures.

‘WHEREAS, NASSCO is the sole and absolute owner of a certain parcel
of land known as Jose Panganiban Smelting Plant area,
at Jose Panganiban, Camarines
Norte, its title hereto being vested under Presidential Decree No. 837 dated
December 6, 1975;

‘WHEREAS, on the 27th day of November 1975, at Makati, Rizal
and registered as Doc. No. 877; Page No. 77; Book No. II; and Series of 1975,
of the Notarial Register of the aforementioned Notary
Public, NASSCO and PHILIPPINE SMELTERS CORPORATION entered into a Contract of
Purchase and Sale covering all the equipment and facilities including
structures, buildings, shops, quarters, houses and plant located at Jose Panganiban Smelting Plant at Jose Panganiban,
Camarines Norte;

‘WHEREAS, PHILIPPINE SMELTERS CORPORATION has signified its
intention to cooperate in the fulfillment of the desired goals of the
government of the Republic of the
Philippines by making substantial investments in the integrated steel industry;

‘WHEREAS, PHILIPPINE SMELTERS CORPORATION has applied with NASSCO
to purchase the Jose Panganiban area where the
Smelting Plant is located at Jose Panganiban, Camarines Norte;

‘WHEREAS, Section 3 of Presidential Decree No. 837 promulgated on
December 6, 1975, authorized NASSCO to transfer ownership of the Jose Panganiban area or any portion thereof and convey the same
to persons or corporation qualified to acquire land under the Constitution,
either through public bidding or through negotiations as the interest of the
Government warrants, any provisions of law, proclamation, ordinance, rules and
regulations to the contrary notwithstanding;

‘WHEREAS, PHILIPPINE SMELTERS CORPORATION is qualified to acquire
land under the Constitution and in pursuance of the policy of the Government of
the Republic of the Philippines to encourage and promote the establishment,
development, operation of an integrated steel industry in the Philippines, the
sale of Jose Panganiban area to PHILIPPINE SMELTERS
CORPORATION will redound to the interest of the country and the government;’

“In truth, the reasons that compelled NASSCO to dispose of the
property was not so much the financial returns from the sale but more on the
basis of the national policy involved as stated in P.D. 837:

‘WHEREAS, in pursuance of the national policy of allowing the
private sector to take over enterprises pioneered by the government when the
private sector is ready and capable to continue and improve a particular government
endeavor and in the interest of the National Government, various government
performance evaluation and/or study groups have recommended the disposition of
all NASSCO properties and units, including the Jose Panganiban
Smelting Plant at Jose Panganiban, Camarines Norte.

‘WHEREAS, under Proclamation No. 500 dated December 23, 1968, a
parcel of land situated in the Municipality of Jose Panganiban,
Province of Camarines Norte, island of Luzon, bounded
on the W., along lines 1-2-3-4-5-6-7-8-9-10-11-12-13-14-15-16, by Mambulao Bay; on the N., along lines 16-17-18-19-20-21, by
Forest Reserve; and on the E and S, along lines 21-22-23-24-25-26-27-1 by
project No. 2, Block VI (Alien
& Disp.) LC-403, containing an area of
approximately 170.2890 hectares, more
or less, has been withdrawn from sale and settlement and reserved for pier,
warehouse and smelting plant site purposes under the administration of the
NASSCO;

‘WHEREAS, as mandated under Republic Act 1396, NASSCO constructed,
established and operated in said site a pig iron smelting plant with pier and
other plant facilities known as the Jose Panganiban
Smelting Plant;’

“If we are to delve deeper, the Court may well say that the
amount of consideration, in terms of money, is only secondary to the over-riding policy
of the national government to provide impetuous to the private sector that it
may take the lead in the total economic development of the country under
competent leadership.  It will be to the
national interest if the government could be relieved of the burden and shift
it to the private sector enabling the government to attend to the greater
problems that it confronts in nation building.

“Besides, the Deed of Sale between NASSCO and SMELTERS
contains restrictions on the right of SMELTERS on the use of the property.

‘Section 3.1 – Use of Property. –

‘It is a special consideration and
condition of this Contract that the PROPERTY shall, for as long as PHILIPPINE
SMELTERS CORPORATION remains the owner thereof, be used primarily for the
establishment, operation and maintenance of an integrated steel industry and
complementary facilities and other industries, consistent with its declared
intention to make substantial investment in the integrated steel industry in
pursuance of the policy of the National Government to encourage, promote and
accelerate the growth of said industry in this country.’

“NASSCO is also allowed participation in the affairs of
SMELTERS in case of default.

“The objection of defendants, therefore, as to the inadequacy
of the price is not well taken. 
Importantly, NASSCO does not plead that the price for which it had sold
the properties to SMELTERS is
unconscionable or disproportionate with its true value.  We hasten to conclude that the question of
the price is between NASSCO as seller and SMELTERS as buyer.  And in this particular transaction, it
belongs to the Executive Department of the government to determine what is the
reasonable price of the land NASSCO was selling, taking into
account primarily the announced national policy.  It is not for defendants to raise this
question.  The contract having been
approved by the President of the Philippines, it becomes a matter of conscience for the
Executive Department to evaluate as to the reasonableness of its price.  The Court may not just intrude into the
prerogatives of the Chief Executive.

“Defendants argue also that under the Contract of 1957 between SAN MAURICIO and NASSCO, SAN MAURICIO
was granted preferential right to reacquire the property in case NASSCO had no
more need for it.  Going over the
voluminous records of this case, the Court does not find that defendants had
introduced in evidence the aforesaid contract of 1957 to substantiate its claim.  However, Assemblyman Arturo F. Pacificador, testifying on this point, claimed that he had
advised, Mr. Emilio Vito of MARSMAN of the projected sale of the property
before the Contract of December 29, 1975 between NASSCO and SMELTERS was
finalized, MARSMAN did not show any interest to reacquire said property so that
NASSCO proceeded with the sale to SMELTERS. 
It is noteworthy that Mr. Vito, who gave his deposition twice, first in
Civil Case No. 3025, which he re-affirmed in the case at bar, did not on any
occasion, even attempt to contradict Assemblyman Pacificador.  Besides, the Deed of Sale
of 1957 does not appear to have been recorded in the Registry of Property of Camarines Norte, at least it was not shown to have been so
recorded.  It may not, therefore,
bind any third party who had subsequently acquired the property in good faith and for value.  It is not enough that in the
subsequent contracts of 1973 and 1975 between NASSCO and SAN MAURICIO and
NASSCO and MARSMAN, respectively, the preferential right of defendants is
mentioned, because the Court, not to say a third-party is left guessing as to
what is the nature of that right allegedly granted by NASSCO to the
defendants.  Since the contract is
between NASSCO and the defendants and defendants should have a copy of that
contract, the Court feels that it must be the defendants who should present
that contract to prove its affirmative allegation that it has in fact a
preferential right to the property under the contract of 1957.  Defendants failed to do so.  Under the above circumstances the Court
cannot very well consider the right claimed by the defendants.

“Having disposed of the arguments of defendants against the
validity of the sale in favor of SMELTERS the next issue would be the claim of
SMELTERS for damages.  SMELTERS claim
that it had contracted the services of at least five (5) foreign technicians,
namely:  Lloyd Thomas, Leonard Kitchener,
Donald Tully, Alec McKensey, and Stanley, who came to
the Philippines to assist and give technical advice in the operation,
development and enhancement of the smelting plant for which it had spent the
amount of P500,000.00 for their travelling expenses
and per diems aside from their salaries as testified to by Jose Marcelo, Jr.,
President of SMELTERS.  SMELTERS
attributes the non-full development of its smelting plant and its inability to
produce the pig iron because of the impediments created by the notice of
adverse claim.  The Court is not ready to
award in full the amount as claimed by Mr. Marcelo because SMELTERS could still
avail of their counsel and services even if belatedly.  It was shown, however, that SMELTERS had suffered
damages for it was not able to proceed immediately with the installation,
establishment and operation the smelting plant and production of pig iron.  The Court would, therefore, grant in the exercise
of its discretion P150,000.00 for said claim.

“SMELTERS claimed further that it suffered damages represented
by the difference of the costs of materials and other machineries in 1976 when
it should have acquired said items and started operation in comparison with the
costs of materials in 1978 and 1979 when it had paid for said machineries.  The delay in the commencement of the
operation of the smelting plant was the inability of SMELTERS to obtain the
necessary fundings, a circumstance it attributes to
the defendants.  The Court shares the
view of plaintiff for it’s supported by the evidence.  The loan application of SMELTERS could not be
granted by the Development Bank of the Philippines
(DBP for short) and other financial institutions because of the annotations of adverse claim on its titles on the
properties bought from NASSCO. 
Obviously, the DBP would not grant the loan which SMELTERS tried to
obtain on the security of parcels of land burdened with a notice of adverse claim.  The same could be said of the other private
banking institutions.  To be able to
finally obtain loan from Development Bank of the Philippines after a protracted delay, SMELTERS was
required to post a bond of P7.5 million for which it paid premium in the
amount of P46,000.00 which defendants
should be made answerable as an item of actual damages.

“Plaintiff has shown by testimony (Marcelo and Cantiller) and by documentary evidence that because of the
delay in the operation of the plant occasioned by the acts of the defendants, procurement
of necessary equipment and machineries had gone up as can be gleaned from the
following:

“A. QUOTATIONS OF PRICES OF EQUIPMENT IN 1976.

“ACTUAL PURCHASE PRICE OF EQUIPMENT AND MACHINERIES IN
1978.

”Conversion:

DM x .5383 – US $ x 7.5=P

SKR x –2297 – US $x 7.5=P

“The table of prices above-quoted shows the differences in the
prices of said equipment and machineries in 1976 as against the year 1978.  Defendants should be liable for the
difference because by their direct act, SMELTERS was unable to obtain the loan
in 1976 and was forced to buy the machineries in question at a much higher
price in 1978.  If SMELTERS was able to
buy the equipment and machineries in 1976, it would have not paid higher prices
when the purchase of said equipment and machineries was finally made in 1978,
then SMELTERS would have been able to start operation in 1976.  The gain that SMELTERS would have realized in 1976, 1977 and 1978 was estimated
to be P7,168,000.00, which amount is reflected in the Project Study (Exh. L) and testified to by Ernesto Cantiller,
General Manager of plain­tiff. 
Defendants were not able to show that the projected gain for the year
1976 to 1977 are not correct or could not have been realized.  Although Atty. Alafriz
reserved his right to cross-examine Cantiller on the
Project Study, at the scheduled hearing for that purpose, Atty. Laviña, corrobora­ting counsel to Atty. Alafriz,
waived the cross-examination.  It cannot
be disputed that expected gains or profits can be the subject of damages and in
this particular case, we find defendants liable for the same.  It has been provided that damages shall
comprehend not only the value of the loss suffered, but also that of the
profits which could have been obtained (Art. 2200, New Civil Code). Profits or
gains (Lucro cesante) could
have been earned by plaintiff had there been no delay in the operation of the
plant which delay, as we had already stated and found, is attributable to
defendants’ acts in annotating ‘adverse Claims’ on plaintiff’s titles.

“With respect to SMELTERS’ claim for attorney’s fees, the
Court finds that there were several lawyers who represented SMELTERS in this proceedings.  There was Atty. Jules A. Mejia who signed and
filed the complaint and who handled the case until after the partial judgment
was rendered herein.  Then there is Atty.
Augusto Schneider who was the resident counsel of Daet and Jose Panganiban, Camarines Norte for
SMELTERS.  And then, there is Atty.
Benjamin H. Aquino who substituted for Atty.
Mejia.  The Court may not also overlook
the circumstances that out of this case, several incidents were brought either
directly to the Supreme Court or to the Court of Appeals.

“There is some justification in the claim of SMELTERS for attorney’s
fees.  There is no question that the
action of SMELTERS was precipitated by the annotation of adverse claim at the instance
of the defendants.  There is also no
serious controversy that said adverse claim was uncalled for; it lacks both
legal and factual basis and it forces SMELTERS to litigate.  Although in the complaint SMELTERS asked only
P50,000.00 for attorney’s fees, but
the services rendered by the lawyers for the plaintiff who had to come several
times to his Court travelling hundreds of kilometers back and forth, and the
importance of the questions involved, the Court believes that an award of
P150,000.00 for counsel fees in favor of SMELTERS is reasonable.  It should
be stated in this connection that when the complaint was filed in February 1977
the plaintiff did not have in
mind that certain incidents of the case
will reach the appellate Courts (SC & CA). 
When Jose Marcelo, Jr., President of plaintiff, testified on March 30, 1979 he informed the Court
that he has to pay his lawyers P150,000.00 each. Plaintiff has therefore proven
that it had to disburse more than what was originally stated in the complaint which
under existing jurisprudence the Court may award in excess of what is prayed for provided the award is
reasonable.

“Defendants’ counterclaim against SMELTERS should be, as they
are hereby denied, in view of our findings and conclusions heretofore stated.

“Coming to the third-party complaint filed by defendants
against NASSCO, the Court believes that said third-party complaint should be
dismissed, after the Court has arrived on the conclusion above indicated.  Moreover the two contracts between NASSCO and
SAN MAURICIO, and NASSCO and MARSMAN does not contain any warranty, so that
defendants corporation bought the lands or any right therein at their
risk.  The absence of a warranty clause
in the aforesaid contract is significant. 
Unlike ordinary contracts of sale and assignment or rights, the omission
of the warranty clause in the aforesaid contracts
would only mean that NASSCO could not be held liable for damages if, later on,
there would arise some controversy about the transaction on the title of the land
sold by NASSCO.  The act of NASSCO in
selling the property in litigation to SMELTERS is duly authorized by law, that
is by P.D. 837 and unquestionably approved by the President of the Philippines.  This
matter was fully established with the testimony of Assemblyman Pacificador, former Acting Chairman of NASSCO, who in no
uncertain words said that the approval of the sale to SMELTERS by the President
was done in his presence.  Documentary
evidence proving the same has also been submitted by the plaintiff (Exhs. E, E-1 & E-2). 
NASSCO, therefore, could not be held accountable for the sale of said
property to SMELTERS.

“Moreover, the corporate life of NASSCO expired on January 6,
1976, and although under Section 77 of the Corporation Law, it has three (3)
years to continue as a corporate body for the purpose of prosecuting and
defending suits by or against it and of enabling it to gradually settle and
close its affairs, to dispose of and convey its property and divide its equital stock.  Said
three-year period has already expired on January
6, 1979.  The Court seriously
doubts whether an action against NASSCO could still be maintained after the
period provided for in Section 77 of the Corporation Law has lapsed.  The Court believes that after the expiration
of the three-year period after the charter of NASSCO has expired, the present
third-party complaint by defendants against NASSCO should be dismissed.

“WHEREFORE, Judgment is rendered:

“1.    Ordering the Register of Deeds of Camarines Norte to cancel the annotation of adverse claim
appearing on Transfer Certificates of Titles Nos. 13503, 13504, 13505, 13506,
13507, 13508, 13509, 13510, 13511, 13512, 13513, 13514, 13515, 13516, 13517,
13518, 13519, 13520, and 13521 in the name of Philippine Smelters Corporation
inscribed on August 16, 1976 at the initiative of the defendants.

“2.    Declaring plaintiff Philippine Smelters
Corporation the true and absolute owner of the lands and improvements existing
thereon covered by said Transfer Certificates of Titles and entitled to possession
thereof and to all surface rights therein.

“3.    Directing the defendants, except the
Register of Deeds, to pay jointly and severally the
plaintiff Philippine Smelters Corporation the amount of P7,587,843.98 itemized
as follows:

“A)   Expenses per diems and

fees of five (5)
foreign

technicians.                                 –                      150,000.00

“B)   Premium paid by SMEL-­

TERS on the bond to

secure the loan of
P7.5

million
from DBP.                        –                        46,000.00

“C)   Difference
in acquisition

of equipment and
machine-

ries
in 1976 as compared

with actual
acquisition price

in 1978 and 1979.                        –                        
73,843.98

“D)   Unearned profits for 1977

and 1978.                                     –                    7,168,000.00

“E)   Attorney’s fees & expenses

of litigation.                                   –                      150,000.00

TOTAL                  –                 P7,587,843.98

“4.    Declaring the Sheriff’s Certificate of Final
Sale null and void, the property sold at that time being part of the public
domain.

“5.    Dismissing defendants’ counterclaim and the
Third-Party Complaint of Marsman and San Mauricio
Mining Company against the third-party defendant both for lack of merits.

“6.    Plaintiff shall recover cost of suit against
defendants except defendant Register of Deeds.

“SO ORDERED.” (Pp. 735-751, Record.)

SAN MAURICIO and MARSMAN,
joined by Moya, vigorously assail the foregoing
judgment in their eleven assignments of error, to wit:

“I

“THE TRIAL COURT ERRED IN NOT HOLDING AND DECLARING THE DEED
OF SALE EXECUTED BY NASSCO, IN FAVOR OF SMELTERS, DATED DECEMBER 29, 1975,
COVERING APPROXIMATELY 220 HECTARES OF LAND IN J. PANGANIBAN, CAMARINES NORTE,
(EXHIBIT 11), AS NULL AND VOID, AB INITIO, BECAUSE:

‘(a)   SAN MAURICIO and MARSMAN have vested legal
right over the entire area by virtue of their ownership of all the patentable
mining claims covered thereby which have been located, explored and exploited
under and by virtue of the Act of Congress of July 1, 1902, their rights
thereto having been duly recognized by the Philippine Government, through the
Bureau of Mines, pursuant to the provisions of Section 101 of Presidential
Decree No. 463;

‘(b)   NASSCO had no right or title whatsoever to
the fifty (50) hectares included in the area sold by it to SMELTERS, the same
being foreshore land which belongs to the national patrimony and which, by law,
is outside the commerce of man and not even subject to sale by the State
(Public Land Act, CA-No. 141, Secs. 59 and 61); and,
as a matter of fact, as borne out by the context of the Deed of Sale itself and
the type used (Exhibit 11, page 4, photocopy of pertinent portion reproduced,
see back sheet), the same appears to have been illegally intercalated as in
addition to, the 170.2890 hectares
vested upon and authorized to be sold by, NASSCO to competent persons, under
P.D. No. 837;

‘(c)   NASSCO having, by a Contract of Sale and
Assignment of Rights dated November 23, 1973, Exhibit 2, PREVIOUSLY sold and
assigned to SAN MAURICIO, for the sum
of P200,000.00, 93.518 hectares, including all improvements thereon, out of the
area in question, it may not sell, as it did sell, for the second time,
the same property, to SMELTERS, in flagrant violation of law and the constitutional
provision on inviolability of contracts;

‘(d)   NASSCO having, by a Deed of Assignment and
Quitclaim dated June 26, 1975 (Exhibit 4), likewise PREVIOUSLY sold and
assigned to Marsman, for the sum of P32,595.50,
32.575 hectares, including all improvements thereon, out of the area in
question, it may not sell, as it did sell, for the second time, the same
property, to SMELTERS, in clear violation of law and the constitutional provision
on inviolability of contracts;

‘(e)   Approximately 13,7497 hectares of the area
sold by NASSCO to SMELTERS was, at the time of the sale, and up to this date,
of the private ownership of Marsman, previously
acquired by it from Amparo P. de los
Santos, for the sum of P45,000.00, under a Deed of Sale, dated June 23, 1975
(Exhibit 5), incident to a compromise agreement in Civil Case No. 1613 of the
Court of First Instance of Camarines Norte, wherein
NASSCO was one of the parties defendants;

‘(f)    Approximately
22 hectares of the area sold by NASSCO to SMELTERS was, at the time of
the sale, and up to this date, of the private ownership of SAN MAURICIO
and MARSMAN, previously acquired by them from the heirs of Gregorio Bamba, Sr., for the sum of P40,000.00, under a Deed of Sale
dated July 4, 1975 (Exhibit 6), incident to a compromise settlement in Civil
Case No. 1452 of the Court of First Instance of Camarines
Norte, wherein NASSCO was likewise one of the parties defendants;

‘(g)   Even assuming that NASSCO, a government owned
corporation, had been vested with legal title to the property in dispute, the
sale made by it in favor of SMELTERS, a privately owned corporation, is in any
case null and void, as clearly violative of public interest and wanting in valid
consideration therefor, considering that the
Government had invested approximately Fifty Million Pesos (P50,000,000.00) as
appropriated by it under Republic Act No. 1306, for the pig iron smelting plant
therein established, with NASSCO subsequently selling the same to SMELTERS for the immoral and measly sum of
P8,514.45 down, and the stipulated
balance of P76,630.00 in easy installments payable up to July 1986 (See Deed of
Sale, Exhibit 11);’

“II

“THE TRIAL COURT ERRED IN NOT DECLARING AND HOLDING THAT PRESIDENTIAL
DECREE NO. 837 UNDER WHICH NASSCO CLAIMED TITLE TO THE 170.2890 HECTARES OF
LAND SOLD BY IT TO SMELTERS, IS NULL AND VOID, AS VIOLATIVE OF THE RIGHTS,
TITLE AND INTERESTS OF SAN MAURICIO AND MARSMAN IN AND TO THE PROPERTY IN
DISPUTE, CONSTITUTING, AS IT DOES, UNDUE DIVESTMENT OF EXISTING VESTED LEGAL
RIGHTS, WITHOUT DUE PROCESS OF LAW.

“III

“THE TRIAL COURT ERRED IN HOLDING AND DECLARING THAT BOTH
PROCLAMATION NO. 500, DATED DECEMBER
23, 1968, AND PRESIDENTIAL DECREE NO. 837, DATED DECEMBER 6, 1975,
HAVE ABROGATED BOTH SAN MAURICIO’S AND MARSMAN’S EXISTING PRIVATE RIGHTS WHICH
THEY HAVE ACQUIRED UNDER AND BY VIRTUE OF THE PROVISIONS OF THE ACT OF CONGRESS
OF JULY 1, 1902.

“IV

“THE TRIAL COURT ERRED IN NOT VOIDING AND NULLIFYING TRANSFER CERTIFICATES OF TITLE NOS.
13060, 13502
UP TO 13521 REGISTERED IN THE NAME OF SMELTERS AND IN HOLDING THAT SMELTERS IS
THE ABSOLUTE OWNER OF THE LANDS AND IMPROVEMENTS THEREON AND TO ALL SURFACE
RIGHTS THEREIN.

“V

“THE TRIAL COURT ERRED IN HOLDING AND DECLARING THAT THE CONTRACT OF SALE AND ASSIGNMENT OF
RIGHTS, DATED NOVEMBER 23, 1973, EXECUTED BY NASSCO IN FAVOR OF SAN MAURICIO (EXHIBIT 2) LACKS APPROVAL OF THE OFFICE OF THE PRESIDENT IN
THAT THE SIGNATURE OF ASST. EXECUTIVE SECRETARY ZAMORA APPROVING THE
SAME (EXH. H), IS FORGERY, AND THAT THE DEED OF ASSIGNMENT OF RIGHTS, DATED JUNE 26, 1975, LIKEWISE EXECUTED BY NASSCO IN FAVOR OF MARSMAN (EXHIBIT
4) IS INOFFICIOUS; AND AS SUCH, BOTH SAN MAURICIO AND MARSMAN DID NOT ACQUIRE
VALID TITLE TO THE PROPERTIES COVERED
THEREBY.

“VI

“THE TRIAL COURT ERRED IN HOLDING AND DECLARING THAT THE
SHERIFF’S CERTIFICATE OF FINAL DEED (EXH. 3) IS NULL AND VOID ON THE GROUND THAT THE PROPERTY SOLD AND COVERED THEREBY
IS PART OF THE PUBLIC DOMAIN.

“VII

“THE TRIAL COURT ERRED IN DISMISSING THE THIRD PARTY COMPLAINT
FILED BY SAN MAURICIO AND MARSMAN AGAINST NASSCO AND IN DECLARING THAT SUIT
AGAINST NASSCO MAY NO LONGER BE
MAINTAINED AFTER THREE YEARS FROM THE DATE OF TERMINATION OF ITS CORPORATE EXISTENCE ON JANUARY
6, 1976.

“VIII

“THE TRIAL COURT ERRED IN NOT HOLDING AND DECLARING THAT SAN
MAURICIO AND MARSMAN HAVE THE RIGHT TO REPURCHASE FROM NASSCO THE REMAINING
AREA (CONSISTING OF 18 HECTARES TOGETHER WITH ALL ITS IMPROVEMENTS SHOWN IN THE PLAN, EXHIBIT 10, AS LOT 261-C) NOW IN THE POSSESSION OF
SMELTERS, WHICH NASSCO
PREVIOUSLY ACQUIRED FROM SAN MAURICIO SUBJECT TO SUCH RIGHT OF REPURCHASE DULY AND EXPRESSLY ACKNOWLEDGED BY NASSCO IN
THE DEEDS OF SALE AND ASSIGNMENT, EXHIBITS 2 AND 4;

“IX

“THE TRIAL COURT ERRED IN DECLARING BY WAY OF OBITER DICTUM
THAT SAN MAURICIO CONVEYED TO NASSCO SOME 20 MINERAL CLAIMS WITHIN THE AREA IN
DISPUTE.

“X

“THE TRIAL COURT ERRED IN CONDEMNING MARSMAN AND SAN MAURICIO,
JOINTLY AND SEVERALLY, TO PAY SMELTERS THE AGGRE­GATE SUM OF P7,587,843.98 BY
WAY OF DAMAGES IN THE FORM OF ALLEGED UNEARNED PROFITS, EXPENSES AND ATTORNEY’S
FEES, INCIDENT TO, AND AS A RESULT OF, THE ANNOTATION BY SAN MAURICIO AND
MARSMAN OF THEIR ADVERSE CLAIM ON THE PROPERTIES COVERED BY NASSCO’S
CERTIFICATE OF TITLE AND THOSE OF SMELTERS WHICH WERE DERIVED THEREFROM.

“XI

“THE TRIAL COURT ERRED IN NOT DISMISS­ING THE COMPLAINT FILED
BY SMELTERS AGAINST SAN MAURICIO, MARSMAN AND MOYA.” (Pp. 35-42, Brief of
Defendants-Appellants.)

And so, according to
appellants, the following are the “salient” issues in the cases at
bar:

“1.    Whether or not the vested legal rights of
SAN MAURICIO and MARSMAN in and to their mining claims, surface rights and
existing improvements, within the area in dispute, which were located and
acquired by them and their predecessors in interest under the provisions of the
Act of Congress of July 1, 1902, and other laws, continue to be valid,
effective and subsisting, notwithstanding the issuance of Presidential Decree
No. 837, vesting title unto NASSCO of 170.2890hectares of land within the said
mineral claims.

“2.    Whether
or not the reconveyances made by NASSCO firstly, to SAN MAURICIO under the Contract of Sale and
Assignment of Rights, dated November 23, 1973, covering 93.518 hectares of
surface rights, for and in consideration of the sum of P200,000.00 (Exhibit 2, R.A.
52-68), and, secondly, to MARSMAN under the Deed of Assignment and Quitclaim,
dated June 26, 1975, covering 32.575 hectares of surface rights, for and in
consideration of the sum of P32,595.50 (Exhibit 4, R.A. 77-88), are valid and
effective;

“3.    Whether or not NASSCO after having sold and reconveyed to SAN MAURICIO and MARSMAN, respectively, for
the aggregate sum of P232,595.50, the
totality of 125.093 hectares of surface rights above referred to, may sell for the for the second time, to
SMELTERS, the identical properties (Exh. 11, R.A. 102-118) without infringing upon the law and the constitutional
provision on inviolability of contracts;

“4.    Whether or not the Deed of Sale executed by NASSCO in favor of
SMELTERS, dated December 29, 1975, conveying government property worth millions
of pesos, (Exhibit 11, R.A. 102-118) is valid and effective, notwithstanding
the fact that it is clearly violative of public
interest and absolutely wanting of valid consideration, apart from the fact
that it has not been duly approved by the President of the Philippines;

“5.    Whether or not, in view of the foregoing,
SAN MAURICIO and MARSMAN had the legal right to have annotated their adverse
claim on the properties covered by the title issued to NASSCO under
Presidential Decree No. 837, and those derived therefrom
issued thereafter to SMELTERS;

“6.    Whether or not the Sheriff’s Certificate of
Final Deed dated November 4, 1975,
in favor of MARSMAN (Exh. 3, R.A. 88-102) in
consequence of the mortgage foreclosure of the mining claims, mining rights,
improvements and other properties of SAN MAURICIO therein described, for and in
consideration of the sum of P3,961,973.75, is valid and effective;

“7.    Whether or not SMELTERS is entitled to an award for damages
in the aggregate sum of P7,587,843.98 (Decision, R.A. 1042-1116) by reason of
the said annotation of adverse claim made by SAN MAURICIO and MARSMAN.”
(Pp. 33-35, id.)

We have carefully read
the very lucid discussion of these
assignments of error, and it must be admitted that appellants have made a creditable and forceful presentation of
their cause.  Taken alone, one could
readily be convinced by appellants’ brief that indeed the trial court erred as
pointed out by them.

But it is most important
to note that beyond the issues so well presented and discoursed by appellants
lies the sole point of fact that
is to Our mind decisive in these cases. 
All the vehement and ingenious arguments and counter-arguments regarding
the validity of the documents of
sale or resale of November 23, 1973 by NASSCO to SAN MAURICIO, of June 26, 1975
also by NASSCO in favor of
MARSMAN and other documents related may be deemed as merely peripheral and
tangential, if not immaterial, as long as it is not determined definitely what
was conveyed by SAN MAURICIO to NASSCO on November 19, 1957.  If what was transferred then included the
mining claims and mineral rights of SAN MAURICIO,
We would have no alternative than to make Our decision on that basis,
pursuing to their logical conclusion the legal effects of Proclamation 500 of
December 23, 1968 and Presidential Decree 837 of December 6, 1975 upon whatever
transactions might have transpired among the parties hereto.

We say that the question
of what was sold by SAN MAURICIO to
NASSCO on November 19, 1957 is the pivotal point to be determined here
because it cannot be denied that from the constitutional point of view and in
the light of the vested rights principle,
if the mineral rights and mining claims of SAN MAURICIO were perfected
before that date, and it sold to NASSCO only the “surface rights” in their 170 hectares of land, then neither Proclamation 500 nor
Presidential Decree 837 could deprive it of those mineral rights and mining
claims.

In connection with this
vital issue, SMELTER’s brief posits that the very
document of transfer itself, copy of which is annexed to it as Appendix “A” is the indubitable
proof that what were conveyed were not only the surface rights but the
mining claims themselves.  Thus, the pertinent portion of the said
document states clearly and unequivocally:

“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.”  (Underlining ours) (Pp.
78-79, Brief for Plaintiff-Appellee.)

We cannot close Our eyes
to the unambiguous tenor of this quoted paragraph.  Indeed, We have no basis to discuss
“surface rights” at all, for those words do not even appear in the
document.  Two other paragraphs thereof
make explicit reference also to mining claims, not “surface
rights“, We quote:

“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.  (Underlining ours) (Idem)

Not without some degree
of strictly technical plausibility, appellants contend that SMELTERS’
production of the above-quoted instrument of transfer of November
19, 1957 is out of
place in this Court, the same not having been introduced or presented as
evidence at the trial.

To begin with, with rare commendable candidness in advocacy,
and induced evidently by the undeniable accuracy of Appendix “A”,(2) instead of standing pat on their technical
procedural objection, appellants would
want Us to devalue said document by maintaining that “contemporaneous and
subsequent acts of the vendor (SAN MAURICIO) and the vendee (NASSCO) in relation therewith, covering a period of over 16 years, clearly show that
they treated the instrument of sale to
the exclusion of the 20 mining claims, since NASSCO under its charter was not authorized to engage in mining.” (p. 5, Appellant’s Reply Brief) And the case of Nielson & Co., Inc. vs. Lepanto Consolidated
Mining Co., 18 SCRA 1050-1051 and the
earlier one of Canuto vs. Mariano, 37 Phil.
840 are cited to support the proposition that in the construction of contracts
the intention of the parties may be proven by subsequent acts.

The Court does not see how the cases cited can be
controlling in the cases at bar.  The primary and elementary rule of
construction of documents is that when the words or language thereof is clear
and plain or readily understandable by any ordinary reader thereof, there is
absolutely no room for interpretation or construction anymore.  What the case of Nielson had in contemplation
was a contract the language of which evinced doubt as to the intention of the
parties, hence the ruling that once the intention is determined it becomes part
of it as if “originally expressed therein in unequivocal terms.”  As far as the Mariano case is concerned, it referred to
agreements subsequent to the questioned contract and the issue was whether or
not parol evidence could be admitted to prove the
later agreement, and, naturally, this Court rightly held that such subsequent
agreement was not covered by the parol evidence rule,
since the said rule covers only prior and contempo­raneous agreements which are
deemed to be integrated into the written contract.

More importantly,
however, appellants’ attempt to demonstrate the so-called ”contemporaneous and
subsequent acts of vendor and vendee” is successfully rebutted in appellees‘
rejoinder brief.  Two points (1) that SAN MAURICIO filed
affidavits of assessments from after 1957 is pointedly belied by Annex
“A” of the said rejoinder brief, a certificate of Leopoldo
L. de Jesus, Register of Deeds & Mining
Recorder of the Bureau of Mines at Daet, Camarines Norte that is true that SAN MAURICIO owned 120
claims at Luklukan, Jose Panganiban,
Camarines Norte, but that during the year 1958, the
San Mauricio Mining Company appears to have filed affidavits for only one
hundred (100) claims, not including the follow­ing twenty (20) claims listed:

which
appear to be the very claims subject of the conveyances and reconveyances
of November 19, 1957 and November 23, 1973.  No
rejoinder brief or any subsequent pleading having been filed by appellants, We
take it that such official certification can be considered as correct, if only
because of the presumption of regularity that is stamped on it as an official
document, even if its original is not
with Us, although We believe it can be presented anytime.

(2)  As
to the authority of NASSCO to engage in mining,
suffice it to point out that under Executive Order No. 399, the Uniform
Charter for Government Corporations, Section 3 thereof provides:

“SEC. 3.  Purposes and
Specific Powers. ? The purposes and specific powers of existing
corporations that are subject to this Charter are those enumerated in Annex A
hereof.”

and
under No. 10 of the Annex A therein referred to, it is provided thus:

“10.  National Shipyards
and Steel Corporation (NASSCO)

“Authorized capital?

“Purposes:

“(a)    To engage in the building and/or repair of
ships, vessels, launches, tugs, barges, dredges, ferries, scows, lighters and
other floating or marine craft and equipment;

“(b)    To purchase and/or otherwise acquire, own,
control, operate, maintain, build and/or repair slipways, floating and dry docks;

“(c)    To undertake the fabrication, manufacture
and/or repair of light and heavy machinery, equipment, structures, implements,
tools, hardware and other articles;

“(d)    To acquire, construct and operate iron and
steel mills, ferrous and non-ferrous foundries, furnaces, smelters and other
mills and plants for light and heavy industries;

“(e)    To acquire the
right-of-way to locate, construct and maintain works and/or appurtenances over
and throughout the lands and waters owned by the Republic of the Philippines,
or any of its branches or political subdivisions; and to exercise the right of
eminent domain for the purposes of this Order in the manner provided by law for instituting condemnation
proceedings.”

under
which it may be implied that the purchase in question was along the line of NASSCO’s ultimate functions.  In any event, the lack of authority or right
to operate is not necessarily exclusive of the right to own.  It is not difficult to conceive the inconvenience
and complications that can result from the ownership of surface rights
separately from that of the mineral claims underneath in the situation of
NASSCO under the provisions aforequoted.  Moreover, if NASSCO needed only the surface rights and
SAN MAURICIO really wanted to retain its mining claims, with each of the
parties having at their beck and call, what with their respective resources,
lawyers of nationally well recognized talent and ability, why did they execute
a document that anyone can only read otherwise?

Under these
circumstances, We are convinced that, all technical ratiocinations
notwithstanding, the incontrovertible fact that appears clear and indisputable
is that by the Deed of Transfer of November 19, 1957, NASSCO acquired from SAN
MAURICIO not only surface
rights over the latter’s land in ques­tion but
actually its mining claims
and mineral rights explicitly specified in said document.  We hold, consequently, that neither
Proclamation 500 nor Presidential Decree 837 deprived either SAN MAURICIO or
MARSMAN of any vested rights in the lands here in dispute.

Having arrived at this
conclusion, it should be readily understandable, as it would be inevitable, how
the rest of the remaining issues in this controversy have to be resolved.

The main prop of appellants’ posture is obviously the resale or
retransfer document from NASSCO to SAN MAURICIO of November 23, 1973,
particularly because, for reasons not satisfactorily shown even by appellants
themselves, it refers to the “Deed of Absolute Sale” of November 19,
1957 as one “of the surface rights over 144.62 hectares of land covering
twenty mining claims of SAN MAURICIO – – to be the site of the Jose Panganiban Smelting Plant of NASSCO.”  Perhaps, if all that We had to consider were
the face of the document thus relied upon by appellants, We could probably
recognize the validity of their defenses and counterclaims herein.

But looking deeper into
the relevant circumstances, We cannot but realize certain insurmountable
obstacles that to Our mind completely bar the prayers of appellants.  We have already remarked that even the
luminous and comprehensive pleadings and briefs of appellants do not give Us a
glimpse of the inscrutable factors that led to the preparation and signing or
execution of the resale document in
question in its extant
tenor.  If fault therefor
could be attributed to a failure of the public officials who took part therein,
We can only say that as a matter of law rooted in the protection of public
interest, and also as a general policy to protect the government and the people against misbehavior
or mischief of its personnel, their errors in the performance of their duties
should never deprive the people of the right to rectify such error and recover
what might be lost or be bartered away in any actuation, deal or transaction
concerned.  It must be borne in mind vis-a-vis the instant cases at bar that NASSCO together with other government owned or controlled
corporations was placed under the Uniform Charter of Government Corporations
thus partaking of the nature of a regular government or official public
entity.  Correspondingly, therefore, the
mistakes of its officials could not legally bind the state, without prejudice
in appropriate cases where connivance or corruption is absent, to the other
party being duly reimbursed any payment it has made.

We have carefully read
the documents, alluded to by appellants, beginning with the resale deed of
November 23, 1973 thru the deed of assignment in favor of MARSMAN dated June
26, 1975, and, of course, all the other papers which are subsidiary thereto,
complimentary thereof or have evidently flowed therefrom,
and truth to tell, they do refer to “surface rights”.  But We cannot go against the hard fact We
have found indubitably demonstrated by appellees that
the original transaction of November 19, 1957 definitely referred to mining claims.  No plausible explanation has been shown of
the apparent discrepancy, and the only inference We can make out of it is that
the public officials who took part in the preparation thereof were either
unaware of the exact import of the documents or the situation they were dealing
with, or, were induced by factors which cannot be revealed.  In any event, the public interest involved in
the matter cannot be made to suffer, as We have already explained, by
their strange or unusual actuations.

What compounds the unexplained and inexplicable tenor of the
deeds and documents relied upon by appellants is that after the issuance by His
Excellency, President Ferdinand E. Marcos of Proclamation No. 500 on December
23, 1968, that is, while the deed of transfer of November 19, 1957 was still
the basis of the government’s ownership of the land in question, including the
mineral or mining claims in question, the said property was withdrawn
“from sale or settlement” and placed “under the administration
(only and no more) of the National
Shipyards and Steel Corporation.” 
Upon these premises, it is indubitable that NASSCO had no legal authority
whatsoever to dispose of what was placed under its administration only, and any
official of NASSCO who acted in
excess of the powers defined by the proclamation performed nothing more,
nothing less than ultra vires acts
entirely devoid of any effect or force in law.

With what We have just
discussed and held it would hardly be necessary for Us to delve deep into the
factual issue of whether or not the Deed of Transfer dated November 23, 1973,
Exhibit C-2, was approved by the Office of the President.  The lengthy and well rationalized discourse
of the trial court leading to the conclusion that the signature of former
Assistant Executive Secretary, now Assemblyman, Hon. Ronaldo
Zamora had been forged, a conclusion based mainly on the testimony of Assemblyman
Zamora himself, not only denying the authenticity of the signature over the
name reading Rolando Zamora (instead of Ronaldo, his
real name) but explaining the badges therein showing lack of regularity thereof
thus reveling its falseness, satisfies Us, and We do not hesitate to give Our
assent thereto.  Specially having in view
the lack of legal authority of the NASSCO officials concerned to act on the
matter in the light of Proclamation 500, We also find and hold that the
supposed transaction with MARSMAN of June 26, 1975 has not been sufficiently shown to have been
approved by then Assistant Executive Secretary Roberto Reyes.  Indeed, how could those alleged transactions
have been approved when they appeared on their faces to be violative
of Proclamation 500 which had not been neither repealed nor even amended in any
manner which would make disposal by NASSCO of the property in question
permissible?  Why would NASSCO retransfer
or reconvey surface rights when it acquired million
claims?

Withal, looking at this
particular point in dispute from another angle, the unavoidable conclusion
would still favor appellee SMELTERS, for assuming
that NASSCO did retransfer to appellants the “surface rights”
referred to in the pertinent deeds, not only would the result be that the
mining claims were intentionally excluded from the retransfer but also that
NASSCO reserved the right to withdraw “anytime the use of the surface
rights from (Marsman, in particular) as public
interest may so require as may be determined by the President pursuant to the
context of Proclamation No. 500, series of 1968″. (See p. 126, Record)(3)

And what totally and definitely consolidated in NASSCO full
ownership of the properties herein involved-mining claims, surface rights and
improvements and all-and made its authority to dispose of and transfer the same
to appellees all the more unquestionable and,
therefore, the sale impugned here indisputably valid and legal was the
legislative recognition, even if, in the juridical
sense, this was practically
superfluous, of NASSCO’s ownership of said properties with the right, power and authority to
sell and dispose of the same, by Presidential Decree 837 of December 6,
1975.  It provides:

“PRESIDENTIAL DECREE
NO. 837

“AN ACT TRANSFERRING OWNERSHIP OF A
CERTAIN PARCEL OF LAND OF THE PUBLIC DOMAIN SITUATED IN THE MUNICIPALITY OF
JOSE PANGANIBAN, PROVINCE OF CAMARINES NORTE, ISLAND OF LUZON TO THE NATIONAL
SHIPYARDS AND STEEL CORPORATION (NASSCO) AND AUTHORIZING THE DISPOSITION
THEREOF.”

“WHEREAS, in pursuance of the national policy of allowing the
private sector to take over enterprises pioneered by the government when the
private sector is ready and
capable to continue and improve a particular government endeavor and in the
interest of the National government, various government performance evaluation
and/or study groups have recommended the disposition of all NASSCO properties
and units, including the Jose Panganiban Smelting
Plant at Jose Panganiban, Camarines
Norte.

‘WHEREAS, under Proclamation No. 500 dated December 23, 1968, a
parcel of land situated in the Municipality of Jose Panganiban,
Province of Camarines Norte, Island of Luzon Bounded
on the W., along lines 1-2-3-4-5-6-7-8-9-10-11-12-13-14-15-16, by Mambulao Bay; on the N., along lines 16-17-18-19-20-21, by
Forest Reserve; and on the E and S, along lines 21-22-23-24-25-26-27-1 by
project No. 2, Block VI (Alien & Disp.) LC-403,
containing an area of approximately 170.2890 hectares more or less, has been
withdrawn from sale and settlement and
reserved for pier, warehouse and smelting plant site purposes under the
administration of the NASSCO;

“WHEREAS, as mandated under Republic Act 1396, NASSCO
constructed, established and operated in said site a big iron smelting plant
with pier and other plant facilities known as the Jose Panganiban
Smelting Plant;

“WHEREAS, in order to facilitate the disposition of all assets
of NASSCO including the Jose Panganiban Smelting
Plant, there is a need to transfer ownership of said parcel of land to the
NASSCO;

“NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution of the
Philippines, hereby decree as follows:

“SECTION 1.  The title
to and ownership of that certain parcel of land, situated in the Municipality
of Jose Panganiban, Province of Camarines
Norte, Island of Luzon, bounded on the W., along lines 1-2-3-4-5-6-7-8-9-10-11-12-13-14-15-16,
by Mambulao Bay; on the N., along lines
16-17-18-19-20-21, by Forest Reserve; and on the E and S, along lines 21-22-23-24-25-26-27-1;
by project No. 2, Block VI (Alien & Disp.)
LC-403, containing an area of approximately 170.2890 hectares, is hereby transferred to and vested in the NASSCO.

“SEC. 2. The said parcel of land herein conveyed shall be
resurveyed by the Bureau of Lands within fifteen (15) days from the
promulgation of this Decree to ascertain its actual location and
boundaries.  Thereafter, the proper
Register of Deeds shall register the same and issue the corresponding
certificate of title to the NASSCO.

“SEC. 3.  Any provision
of law, proclamation ordinance, rules and regulations to the contrary
notwithstanding, the NASSCO may transfer absolute ownership of said parcel of
land or any portion thereof and convey the same to persons or corporations qualified
to acquire land under the Constitution, either through public bidding or
through negotiations, as the interest of the government warrants.

“SEC. 4.  All laws, executive orders, proclamation,
rules and regulations or part thereof inconsistent with this Decree are hereby
repealed and/or modified accordingly.

“SEC. 5.  This Decree
shall take effect immediately.  Done in
the City of Manila this 6th day of
December, in the year of Our Lord, nineteen hundred and seventy-five.”

Corning now to the two supposedly private lands of Amparo de los Santos and the Bambas, comprising thirteen (13) and twenty-two (22)
hectares, respectively, We note that although NASSCO was a party to the two
compromised civil cases involving the same, as defendant, together with SAN MAURICIO
and MARSMAN, NASSCO does not appear to be a party to “Deed of Assignment
and Quitclaim Rights to Real Property” dated June 23, 1975, Annex 5 of SAN
MAURICIO’s and MARSMAN’s
third party-complaint nor to the Deed of Sale by the Bambas
of July 4, 1975, Annex 6, id.  More, it
is expressly stipulated in Annex 5, just referred to, that “(T)his sale or
assignment and quitclaim made in favor of the Second Party (Marsman)
is deemed subject to whatever rights that the National Shipyards and Steel
Corporation (Nassco), party defendant in Civil Case
No. 1613 aforementioned, may still have, if any in the area”, thereby
indicating that NASSCO had not compromised its own claim.

Nonetheless, We find Ourselves in no position in the instant cases at bar to make
any final ruling regarding the said properties. 
Those lands of Amparo de los
Santos and the Bambas
were involved in Civil Cases Nos. 1613 and 1452 of the Court of First Instance
of Camarines Norte. 
They appear to be private agricultural lands.  But the records of those cases are not before
Us in the instant proceedings, neither the papers of the amicable settlement
thereof.  We consider Ourselves unable to
make any definite ruling as to them, considering particularly, that the trial
court made no particular finding regarding them in its rather extensive
decision.  Under these circumstances, We
have no alternative but to decide the present cases only insofar as they affect
the deeds of November 23, 1973 and June 26, 1975 in relation to the acquisition
of NASSCO of the mining claim of SAN MAURICIO on November 19, 1957, as above
discussed, without prejudice to the appellee taking
the correspond­ing legal steps to make clearer its rights over the 38 hectares
just mentioned.  In other words, We hold
and declare that the sale by NASSCO on December 29, 1975 to appellee
SMELTERS of the lands covered by the deed of SAN MAURICIO in favor of NASSCO of
November 19, 1957, bearing as it does the President’s approval on January 6,
1976 (See Annex 1 of Comment of
defunct NASSCO dated February 12, 1979) is legal and valid, the alleged inadequacy, or even “immorality”
of the considerations therein stated notwithstanding, the justification of the
stipulated consideration being sufficiently discussed in the decision of the
trial court, with which We find no cogent reason to disagree.  As His Honor well pointed out, the price
alleged by appellants is in truth even inaccurate, for the amount of money
actually paid by SMELTERS, as stipulated in the deed is much much more, in addition to obligations undertaken by the
buyer to rehabilitate and develop the
property and smelting plant which will
require a considerable sum, justly adequate for which it bought what is
practically a long abandoned junk that had lost its original purchase price.  We have read the deed itself and take
judicial notice of the relevant circumstances surrounding its execution as such
are indicated in the appealed decision and hereby confirm His Honor’s
conclusion.

As regards the damages assessed by the trial court against
appellants, We consider the amount awarded by the trial court as supported by
the evidence of record and the law. 
However, the prayer for additional damages of appellee
ought to be submitted for evaluation by the trial court in a subsequent hearing
for the purpose.

WHEREFORE, judgment is hereby rendered affirming the
decision of the trial court dated August 21, 1979, subject to the
qualifications stated in the above opinion as to the de los
Santos’ and the Bambas‘ properties and the additional
damages asked by appellees.  With this decision, the petition in G. R. No.
L-47859 involving the partial summary judgment of September 22, 1975 is now virtually moot and academic,
since the par­tial judgment and immediate execution therein involved are in
line with the foregoing opinion.

Costs against appellants.

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

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

Aquino, J., did not take part.

(1) Actually,
petitioners-appellants.

(1-a) Actually,
petitioners-appellants.

(2) All parts in quotes are from
the decision of the trial court.

(2-a) Indeed, the alleged
collateral agreement must have been verbal, as there is no showing it was in
writing.

(2) We may add that appellants do
not pretend that if Appendix “A” of appellees’
Brief were offered at the trial they would have been able to show that the same
is a fabrication or in any way inaccurate.

(3) Although it may be noted that
in respect to the alleged re?transfer the language of NASSCO’s
14 and 15th affirmative defenses to the third-party complaint as well as that
of SMELTERS’ reply to the answer (referred to in paragraph (d), pp. 37-38 of
the petition in G.R. No. L-47859) appear to attribute legal significance to the
repurchase deed, to Our mind, the said allegations, properly under­stood, are
not inconsistent but are, on the contrary in line with said appellees‘
fundamental position, sustained by Our foregoing opinion, that in view of
Proclamation 500 and P.D. 837, NASSCO’s right and authority to sell the properties
in question to SMELTERS cannot be legally affected by such purported retransfer
relied upon by petitioners-appellants of so-called “surface rights”.