PAPER INDUSTRIES CORPORATION OF THE PHILIPPINES, PETITIONER, VS. THE HONORABLE DEPUTY EXECUTIVE SECRETARY, THE HONORABLE SECRETARY OF NATURAL RESOURCES AND DAVAO MAHOGANY PRODUC…

This is a petition
for certiorari under Rule 65 of the Revised Rules of Court.  Petitioner Paper Industries Corporation of
the Philippines (PICOP) seeks the reversal of the Decision (pp. 33-38, Rollo) of then Deputy Executive Secretary Fulgencio S. Factoran, Jr. dismissing
PICOP’s appeal from the Decision (pp. 24-32, Rollo) of then Minister of Natural Resources Rodolfo
del Rosario in MNR Case No. 6429
and the Resolution (p. 39, Rollo) of
then Deputy Executive Secretary Catalino Macaraig, Jr., denying PICOP’s
Motion for Reconsideration.

The facts of the case are as follows:

On May 24, 1952,
the government granted the Bislig Bay Lumber Company,
Inc. (now petitioner PICOP) Timber License Agreement (TLA) No. 43 covering
parcels of forest lands in Agusan and Surigao.  The license
was amended on April 26, 1953
(TLA No. 43-1) and on March 4, 1959
(TLA No. 43-2).  It appears that sometime
in 1960, the Bureau of Forestry headed by Artemio Genio established on the ground the boundary line (known as
“Genio” line) of PICOP’s
concession area.  In 1963, this line was monumented on the ground by the Land Classification (LC)
Party No. 18 headed by Forester Narciso Kiocho.  On June 30, 1969, the western boundary
of PICOP’s timber license agreement was amended in
order to conform with the western boundary line
established by the Bureau of Forestry as surveyed and monumented
on the ground.  The last amendment was
reflected under PICOP’s TLA No. 43-3.

Upon the request of the Board of Investments, then President
Marcos issued on July 29, 1969
a warranty establishing the boundaries of PICOP’s TLA
as described under TLA No. 43, as amended (Annex “E” of Petition, p.
57, Rollo).

For its part, respondent Davao Mahogany
Products, Incorporated (DMPI) acquired Ordinary Timber License (OTL) No. 2456,
dated May 19, 1955 from its
original grantee, Romualdo Repaso.  The license was renewed 1960 under OTL No.
1122-60 and subsequently under OTL No. 499-51267.  In 1967, the concession area of DMPI was
consolidated with those of Agusan Mahogany Producers
Company, Inc., the Umayan Timber Company and the
Sanchez Logging Company under OTL No. 175-’71, in the name of DMPI.  On September
17, 1984, OTL No. 175-’71 was converted to TLA No. 17 (p. 34, Rollo), covering a public forest area of
22.500 hectares (p. 62, Rollo).

PICOP’s and DMPI’s
concession areas are adjacent up to each, other, with the eastern boundary of
DMPI being common with the western boundary of PICOP.

In a letter dated December
2, 1983, PICOP complained to the Bureau of Forest Development
against an alleged encroachment by DMPI into the former’s
concession area.  It alleged that its
western boundary is the line established by Forester Genio
and affirmed by LC Party No. 18.  The
western boundary of PICOP was allegedly recognized by DMPI in a letter dated September 19, 1975 addressed to PICOP. 
DMPI disputed PICOP’s allegations
claiming that its common boundary with PICOP is the line described under its
OTL No. 1122-’60 and PICOP’s TLA No. 43-1 and not the
latter’s TLA No. 43-3.

In a decision rendered on November
4, 1985, the Ministry of Natural Resources (Ministry), through then
Secretary
Rodolfo del Rosario, found that PICOP’s
TLA No. 43-3 amended the western boundary of PICOP’s
concession area to conform with the (BFFR) “Genio”
line.  The Ministry found this amendment
to be erroneous because it deprived its adjoining concession holder, the DMPI
of an area to which it was entitled, without the latter
having been afforded an opportunity to contest the change.  The Ministry ruled that the change was
contrary to the standards of due process and existing policy.

The Ministry likewise ruled that DMPI was not precluded from questioning the technical description of
the western boundary under PICOP’s TLA No. 43-3 despite the former’s
letter recognizing the latter’s
boundary.  What DMPI recognized in its letter was PICOP’s
boundary under TLA No. 43-1 and
not that described under TLA No. 43-3.  The decision also ordered the correction and
amendment of TLA No. 43-3 of
PICOP so as to exclude the area contested from PICOP’s
license and to include the same area as part of DMPI’s
concession.

The dispositive portion of the
Ministry’s decision reads:

“WHEREFORE, this Office hereby declares and confirms that the
true and correct common boundary line between the concession areas of Paper
Industries Corporation of the Philippines (PICOP) and Davao
Mahogany Products, Inc. (DMPI) are the lines embodied in the technical
descriptions of Timber License Agreement No. 43-1 of PICOP and Ordinary Timber
License No. 1122-’60 of DMPI.

“Conformably herewith,
TLA No. 43-3 of PICOP shall be corrected/amended so
as to exclude the contested area and, as thus excluded, shall be included in
the concession area of DMPI to form part thereof under its Timber License Agreement No. 17.

“The moratorium Order dated 24 August 1984 of this Office is hereby lifted
insofar as DMPI is concerned and
PICOP is hereby directed to refrain from conducting logging operations within
the area excluded from its TLA No. 43-3.

“The case records are hereby forwarded to the Administrator,
Wood Industry Development Authority for implementation within thirty (30) days
from receipt thereof.

“SO ORDERED.” (pp. 31-32, Rollo)

PICOP appealed the Ministry’s decision to the Office of the President
assigning four (4) errors; 1) the Ministry’s finding that there exists a
boundary dispute; 2) the Ministry’s failure to uphold the Presidential warranty
on the boundary of PICOP; 3) the Ministry’s failure to rule that DMPI was estopped to question its common boundary with PICOP; and 4)
the Ministry’s finding that TLA No. 17 was issued subject to the outcome of the
case (p. 36, Rollo).

On November 24, 1986,
the Office of the President, through then Deputy Executive Secretary Fulgencio S. Factoran, Jr.,
dismissed the appeal.  PICOP’s Motion for Reconsideration was denied on June 17, 1987 by then Deputy
Executive Secretary Catalino Macaraig,
Jr. (p. 39, Rollo).

Hence, the instant petition with a prayer for a
temporary restraining order.

On August 24, 1987, We issued a temporary restraining order
enjoining respondents from enforcing the decision dated November 4, 1985 in MNR
Case No. 6429 (p. 82, Rollo).

It is the contention of PICOP that respondent Deputy Executive Secretary
gravely abused his discretion in affirming the findings of then Secretary del Rosario that the true and correct boundary lines between
the concession areas of PICOP and DMPI are the lines embodied in the technical
descriptions of TLA 43-1 of PICOP and OTL No. 1122-60 of DMPI.  It also assails the order for the correction
of its TLA No. 43-3 so as to exclude therefrom the
area contested by DMPI which area shall be included in the concession of DMPI
to form part of the latter’s TLA No. 17.

The petition is not meritorious.

After going over the records of this case, We find that
public respondents did not commit any grave abuse of discretion and acted
within their jurisdiction when they            issued
the questioned decisions and resolution.

As pointed out by public respondents, the true and correct
boundaries of PICOP and DMPI are the lines embodied in the technical
descriptions of PICOP’s TLA No. 43-1 and not those
embodied in TLA 43-3.  The adjustment
contained in TLA 43-3 moved PICOP’s boundary 2,160
meters further west of its original boundary into DMPI’s
eastern boundary resulting in the diminution of DMPI’s
concession area to about 2,058 hectares. 
This act was accomplished
without notice to the adjoining concessionaire,
DMPI.

The Presidential warranty issued on July 29, 1969 on the boundaries of PICOP’s
concession could not have referred to TLA No. 43-3 because the total area
warranted thereunder referred only to 121,587
hectares of permanent forest lands and 21,580 hectares of alienable and
disposable lands.  This area was the
original area covered by TLA 43, 43-1 and 43-2, and not the area covered under
TLA 43-3 which, as found by the Minister of Natural Resources exceeded PICOP’s authorized total concession area by 2,058 hectares
(p. 6, Decision of the Minister of Natural Resources, p. 29, Rollo).

It is not correct, as PICOP
alleged, that DMPI had always recognized the
(BFFR) “Genio” line as their common
boundary.  DMPI’s
letter of September 29, 1975
confirming its recognition of PICOP’s boundary referred
to TLA No. 43-1 and not TLA NO. 43-3.  This is very clear in the text of DMPI’s
letter to PICOP when the dispute regarding their boundaries arose (p. 59, Rollo).

“September
29, 1975

“Paper Industries Corporation

of the Philippines

JMT
Building, Ayala
Avenue

Makati, Rizal

Gentlemen:

This has reference to the
discussions I had with your Atty. B. G.
Alvizo concerning the common boundary of O.T.
No. 118-57 of Davao Mahogany Products, Inc., (‘DMPI’)
and of T.L.A. No. 43-1 of Bislig Bay Lumber Co.,
Inc., now PICOP.

I confirm that DMPI
recognizes, as it hereby recognizes, the boundary described in the Warranty of
T.L.A. No. 43-1 to be the true and correct common boundary of T.L.A. No. 43-1
of PICOP and O.T. No. 118-57 of DMPI.

xxx                xxx                   xxx

Very
truly yours,

DAVAO MAHONY
PRODUCTS, INC.

SIGNED

GUILLERMO
R. SANCHEZ

Attorney-in-Fact”

It has been consistently held by Us
that:

“x x x (I)n reviewing
administrative decisions of the Executive branch of the Government, x x x the findings of fact made
therein must be respected, so long as they are supported by
substantial evidence, even if not overwhelming or preponderant (Ang Tibay vs. C.I.R., 69 Phil.
635); that it is not for the
reviewing court to weigh the conflicting evidence, determine the credibility of the witnesses, or otherwise
substitute its own judgment for that of the administrative agency on the
sufficiency of the evidence.  x x x.”
(Secretary for Legal Affairs, et al. v. CA, G.R. No. 76761, 9 January 1989; Ang Tibay v. CIR, 69 Phil. 635;
Lao Tang Bun v. Fabre, 81 Phil. 682; Timbancaya v. Vicente, L-19100, Dec. 27, 1963, 9 SCRA 852)

Likewise,

“x x x, (I)n the case of Espinosa, et al. vs. Makalintal,
et al. (79 Phil 134; 45 Off. Gazz. 712), we held that the powers granted to the Secretary of
Agriculture and Commerce (Natural Resources) by law regarding the disposition
of public lands such as granting of licenses, permits, leases and contracts or
approving, rejecting, reinstating or cancelling
applications or deciding conflicting applications, are all executive and
administrative in nature.  It is a
well-recognized principle that purely administrative and discretionary
functions may not be interfered with by the courts.  In general, courts have no supervising power
over the proceedings and actions of the administrative departments of the
government.  This is generally true with
respect to acts involving the exercise of judgment or discretion, and findings
of facts.  x x x.” (Lianga Bay Logging Co., Inc. V. Lopez Enage,
L-30637, July 16, 1987, 152 SCRA 91)

Public respondents
Minister of Natural Resources and Deputy Executive Secretary, the latter acting
for and in behalf and with the authority of the President, did not abuse their
discretion when they ordered the amendment or correction of petitioner’s TLA No. 43-3. 
After finding that there was an unauthorized increase in the concession
area of PICOP, the correction of its license was a necessary consequence.

The allegation by
petitioner that DMPI had no valid Timber License Agreement at the time the
proceedings in this case was commenced by PICOP’s
filing with the Bureau of Forest Development a complaint against DMPI for
encroachment and illegal logging activities is not entirely
correct.  It is noted, as held by
respondent Executive Secretary, that DMPI’s license
before its concession was consolidated with that of three (3) other
concessionaires, was OTL No. 1122-’60. 
When DMPI’s concession was consolidated with
those of three (3) others, the government issued OTL No. 175-71 in the name of
DMPI.  While DMPI’s
OTL No 175-71 was set to expire on September
30, 1983, it already had a pending application for a Timber License
Agreement.  The application was granted
on September 14, 1984 under
TLA No. 17 and will expire on July 31,
1994.  There was, in effect, a continuity in the license granted to DMPI.  In the words of respondent Deputy Executive
Secretary, “DMPI’s timber license did not
terminate upon the expiration of OTL 1122-’60. 
It’s license subsisted until TLA No. 17 was
executed” (p. 36, Rollo).  This effect is recognized under the
Administrative Code of 1987 which provides in its Section 18, Book VII, Chapter
11; “Sec. 18. Non-Expiration of License.  – Where the licensee has made timely and
sufficient application for the renewal of a license with reference to any
activity of a continuing nature, the existing license shall not expire until
the application shall have been finally determined by the agency.”

Even granting that DMPI’s license
expired and was terminated on September
30, 1983, this fact did not grant PICOP any vested right over the
portion which it erroneously included in its amended license.

ACCORDINGLY, the petition is DISMISSED.  The decision of public respondent Deputy Executive Secretary dated November 24, 1986 affirming the
decision of Rodolfo del Rosario, then Minister of Natural Resources
dated November 4, 1985 in
MNR Case No. 6429 is AFFIRMED.  The
temporary restraining order issued by this Court on August 24, 1987 is LIFTED.

Narvasa, (Chairman), Gancayco, and Grino-Aquino, JJ., concur.

Cruz, J., no part, related to petioner’s counsel.