Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&amp;view=article&amp;id=50664:gr-163101-2008&amp;catid=1502&amp;Itemid=566
Timestamp: 2019-04-24 22:08:32+00:00

Document:
G.R. No. 163101 - BENGUET CORP. v. DENR-MINES ADJUDICATION BOARD, ET AL.
BENGUET CORPORATION, Petitioner, v. DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES -MINES ADJUDICATION BOARD and J.G. REALTY AND MINING CORPORATION, Respondents.
The instant petition under Rule 65 of the Rules of Court seeks the annulment of the December 2, 2002 Decision1 and March 17, 2004 Resolution2 of the Department of Environment and Natural Resources-Mining Adjudication Board (DENR-MAB) in MAB Case No. 0124-01 (Mines Administrative Case No. R-M-2000-01) entitled Benguet Corporation (Benguet) v. J.G. Realty and Mining Corporation (J.G. Realty). The December 2, 2002 Decision upheld the March 19, 2001 Decision3 of the MAB Panel of Arbitrators (POA) which canceled the Royalty Agreement with Option to Purchase (RAWOP) dated June 1, 19874 between Benguet and J.G. Realty, and excluded Benguet from the joint Mineral Production Sharing Agreement (MPSA) application over four mining claims. The March 17, 2004 Resolution denied Benguet's Motion for Reconsideration.
On June 1, 1987, Benguet and J.G. Realty entered into a RAWOP, wherein J.G. Realty was acknowledged as the owner of four mining claims respectively named as Bonito-I, Bonito-II, Bonito-III, and Bonito-IV, with a total area of 288.8656 hectares, situated in Barangay Luklukam, Sitio Bagong Bayan, Municipality of Jose Panganiban, Camarines Norte. The parties also executed a Supplemental Agreement5 dated June 1, 1987. The mining claims were covered by MPSA Application No. APSA-V-0009 jointly filed by J.G. Realty as claimowner and Benguet as operator.
In the RAWOP, Benguet obligated itself to perfect the rights to the mining claims and/or otherwise acquire the mining rights to the mineral claims. Within 24 months from the execution of the RAWOP, Benguet should also cause the examination of the mining claims for the purpose of determining whether or not they are worth developing with reasonable probability of profitable production. Benguet undertook also to furnish J.G. Realty with a report on the examination, within a reasonable time after the completion of the examination. Moreover, also within the examination period, Benguet shall conduct all necessary exploration in accordance with a prepared exploration program. If it chooses to do so and before the expiration of the examination period, Benguet may undertake to develop the mining claims upon written notice to J.G. Realty. Benguet must then place the mining claims into commercial productive stage within 24 months from the written notice.6 It is also provided in the RAWOP that if the mining claims were placed in commercial production by Benguet, J.G. Realty should be entitled to a royalty of five percent (5%) of net realizable value, and to royalty for any production done by Benguet whether during the examination or development periods.
b. Violation of the Contract by allowing high graders to operate on our claim.
c. No stipulation was provided with respect to the term limit of the RAWOP.
In response, Benguet's Manager for Legal Services, Reynaldo P. Mendoza, wrote J.G. Realty a letter dated March 8, 1999,8 therein alleging that Benguet complied with its obligations under the RAWOP by investing PhP 42.4 million to rehabilitate the mines, and that the commercial operation was hampered by the non-issuance of a Mines Temporary Permit by the Mines and Geosciences Bureau (MGB) which must be considered as force majeure, entitling Benguet to an extension of time to prosecute such permit. Benguet further claimed that the high graders mentioned by J.G. Realty were already operating prior to Benguet's taking over of the premises, and that J.G. Realty had the obligation of ejecting such small scale miners. Benguet also alleged that the nature of the mining business made it difficult to specify a time limit for the RAWOP. Benguet then argued that the royalties due to J.G. Realty were in fact in its office and ready to be picked up at any time. It appeared that, previously, the practice by J.G. Realty was to pick-up checks from Benguet representing such royalties. However, starting August 1994, J.G. Realty allegedly refused to collect such checks from Benguet. Thus, Benguet posited that there was no valid ground for the termination of the RAWOP. It also reminded J.G. Realty that it should submit the disagreement to arbitration rather than unilaterally terminating the RAWOP.
On June 7, 2000, J.G. Realty filed a Petition for Declaration of Nullity/Cancellation of the RAWOP9 with the Legaspi City POA, Region V, docketed as DENR Case No. 2000-01 and entitled J.G. Realty v. Benguet.
WHEREFORE, premises considered, the June 01, 1987 [RAWOP] and its Supplemental Agreement is hereby declared cancelled and without effect. BENGUET is hereby excluded from the joint MPSA Application over the mineral claims denominated as "BONITO-I", "BONITO-II", "BONITO-III" and "BONITO-IV".
Therefrom, Benguet filed a Notice of Appeal11 with the MAB on April 23, 2001, docketed as Mines Administrative Case No. R-M-2000-01. Thereafter, the MAB issued the assailed December 2, 2002 Decision. Benguet then filed a Motion for Reconsideration of the assailed Decision which was denied in the March 17, 2004 Resolution of the MAB. Hence, Benguet filed the instant petition.
1. There was serious and palpable error when the Honorable Board failed to rule that the contractual obligation of the parties to arbitrate under the Royalty Agreement is mandatory.
2. The Honorable Board exceeded its jurisdiction when it sustained the cancellation of the Royalty Agreement for alleged breach of contract despite the absence of evidence.
Restated, the issues are: (1) Should the controversy have first been submitted to arbitration before the POA took cognizance of the case?; (2) Was the cancellation of the RAWOP supported by evidence?; and (3) Did the cancellation of the RAWOP amount to unjust enrichment of J.G. Realty at the expense of Benguet?
Before we dwell on the substantive issues, we find that the instant petition can be denied outright as Benguet resorted to an improper remedy.
The last paragraph of Section 79 of Republic Act No. (RA) 7942 or the "Philippine Mining Act of 1995" states, "A Petition for Review by certiorari and question of law may be filed by the aggrieved party with the Supreme Court within thirty (30) days from receipt of the order or decision of the [MAB]."
To summarize, there are sufficient legal footings authorizing a review of the MAB Decision under Rule 43 of the Rules of Court. First, Section 30 of Article VI of the 1987 Constitution, mandates that "[n]o law shall be passed increasing the appellate jurisdiction of the Supreme Court as provided in this Constitution without its advice and consent." On the other hand, Section 79 of RA No. 7942 provides that decisions of the MAB may be reviewed by this Court on a "petition for review by certiorari ." This provision is obviously an expansion of the Court's appellate jurisdiction, an expansion to which this Court has not consented. Indiscriminate enactment of legislation enlarging the appellate jurisdiction of this Court would unnecessarily burden it.
Second, when the Supreme Court, in the exercise of its rule-making power, transfers to the CA pending cases involving a review of a quasi-judicial body's decisions, such transfer relates only to procedure; hence, it does not impair the substantive and vested rights of the parties. The aggrieved party's right to appeal is preserved; what is changed is only the procedure by which the appeal is to be made or decided. The parties still have a remedy and a competent tribunal to grant this remedy.
Third, the Revised Rules of Civil Procedure included Rule 43 to provide a uniform rule on appeals from quasi-judicial agencies. Under the rule, appeals from their judgments and final orders are now required to be brought to the CA on a verified Petition for Review . A quasi-judicial agency or body has been defined as an organ of government, other than a court or legislature, which affects the rights of private parties through either adjudication or rule-making. MAB falls under this definition; hence, it is no different from the other quasi-judicial bodies enumerated under Rule 43. Besides, the introductory words in Section 1 of Circular No. 1-91 "among these agencies are" indicate that the enumeration is not exclusive or conclusive and acknowledge the existence of other quasi-judicial agencies which, though not expressly listed, should be deemed included therein.
Fourth, the Court realizes that under Batas Pambansa (BP) Blg. 129 as amended by RA No. 7902, factual controversies are usually involved in decisions of quasi-judicial bodies; and the CA, which is likewise tasked to resolve questions of fact, has more elbow room to resolve them. By including questions of fact among the issues that may be raised in an appeal from quasi-judicial agencies to the CA, Section 3 of Revised Administrative Circular No. 1-95 and Section 3 of Rule 43 explicitly expanded the list of such issues.
According to Section 3 of Rule 43, "[a]n appeal under this Rule may be taken to the Court of Appeals within the period and in the manner herein provided whether the appeal involves questions of fact, of law, or mixed questions of fact and law." Hence, appeals from quasi-judicial agencies even only on questions of law may be brought to the CA.
The above principle was reiterated in Asaphil Construction and Development Corporation v. Tuason, Jr. (Asaphil).15 However, the Carpio ruling was not applied to Asaphil as the petition in the latter case was filed in 1999 or three years before the promulgation of Carpio in 2002. Here, the petition was filed on April 28, 2004 when the Carpio decision was already applicable, thus Benguet should have filed the appeal with the CA.
Petitioner having failed to properly appeal to the CA under Rule 43, the decision of the MAB has become final and executory. On this ground alone, the instant petition must be denied.
Even if we entertain the petition although Benguet skirted the appeal to the CA via Rule 43, still, the December 2, 2002 Decision and March 17, 2004 Resolution of the DENR-MAB in MAB Case No. 0124-01 should be maintained.
Any disputes, differences or disagreements between BENGUET and the OWNER with reference to anything whatsoever pertaining to this Agreement that cannot be amicably settled by them shall not be cause of any action of any kind whatsoever in any court or administrative agency but shall, upon notice of one party to the other, be referred to a Board of Arbitrators consisting of three (3) members, one to be selected by BENGUET, another to be selected by the OWNER and the third to be selected by the aforementioned two arbitrators so appointed.
Thus, Benguet argues that the POA should have first referred the case to voluntary arbitration before taking cognizance of the case, citing Sec. 2 of RA 876 on persons and matters subject to arbitration.
In its July 20, 2004 Comment,20 J.G. Realty reiterated the above rulings of the POA and MAB. It argued that RA 7942 or the "Philippine Mining Act of 1995" is a special law which should prevail over the stipulations of the parties and over a general law, such as RA 876. It also argued that the POA cannot be considered as a "court" under the contemplation of RA 876 and that jurisprudence saying that there must be prior resort to arbitration before filing a case with the courts is inapplicable to the instant case as the POA is itself already engaged in arbitration.
On this issue, we rule for Benguet.
Section 2. Persons and matters subject to arbitration. Two or more persons or parties may submit to the arbitration of one or more arbitrators any controversy existing between them at the time of the submission and which may be the subject of an action, or the parties to any contract may in such contract agree to settle by arbitration a controversy thereafter arising between them. Such submission or contract shall be valid, enforceable and irrevocable, save upon such grounds as exist at law for the revocation of any contract.
Section 6. Hearing by court. A party aggrieved by the failure, neglect or refusal of another to perform under an agreement in writing providing for arbitration may petition the court for an order directing that such arbitration proceed in the manner provided for in such agreement. Five days notice in writing of the hearing of such application shall be served either personally or by registered mail upon the party in default. The court shall hear the parties, and upon being satisfied that the making of the agreement or such failure to comply therewith is not in issue, shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. If the making of the agreement or default be in issue the court shall proceed to summarily hear such issue. If the finding be that no agreement in writing providing for arbitration was made, or that there is no default in the proceeding thereunder, the proceeding shall be dismissed. If the finding be that a written provision for arbitration was made and there is a default in proceeding thereunder, an order shall be made summarily directing the parties to proceed with the arbitration in accordance with the terms thereof.
There is a clear distinction between compulsory and voluntary arbitration. The arbitration provided by the POA is compulsory, while the nature of the arbitration provision in the RAWOP is voluntary, not involving any government agency. Thus, J.G. Realty's argument on this matter must fail.
In sum, on the issue of whether POA should have referred the case to voluntary arbitration, we find that, indeed, POA has no jurisdiction over the dispute which is governed by RA 876, the arbitration law.
However, we find that Benguet is already estopped from questioning the POA's jurisdiction. As it were, when J.G. Realty filed DENR Case No. 2000-01, Benguet filed its answer and participated in the proceedings before the POA, Region V. Secondly, when the adverse March 19, 2001 POA Decision was rendered, it filed an appeal with the MAB in Mines Administrative Case No. R-M-2000-01 and again participated in the MAB proceedings. When the adverse December 2, 2002 MAB Decision was promulgated, it filed a motion for reconsideration with the MAB. When the adverse March 17, 2004 MAB Resolution was issued, Benguet filed a petition with this Court pursuant to Sec. 79 of RA 7942 impliedly recognizing MAB's jurisdiction. In this factual milieu, the Court rules that the jurisdiction of POA and that of MAB can no longer be questioned by Benguet at this late hour. What Benguet should have done was to immediately challenge the POA's jurisdiction by a special civil action for certiorari when POA ruled that it has jurisdiction over the dispute. To redo the proceedings fully participated in by the parties after the lapse of seven years from date of institution of the original action with the POA would be anathema to the speedy and efficient administration of justice.
The cancellation of the RAWOP by the POA was based on two grounds: (1) Benguet's failure to pay J.G. Realty's royalties for the mining claims; and (2) Benguet's failure to seriously pursue MPSA Application No. APSA-V-0009 over the mining claims.
As to the royalties, Benguet claims that the checks representing payments for the royalties of J.G. Realty were available for pick-up in its office and it is the latter which refused to claim them. Benguet then thus concludes that it did not violate the RAWOP for nonpayment of royalties. Further, Benguet reasons that J.G. Realty has the burden of proving that the former did not pay such royalties following the principle that the complainants must prove their affirmative allegations.
With regard to the failure to pursue the MPSA application, Benguet claims that the lengthy time of approval of the application is due to the failure of the MGB to approve it. In other words, Benguet argues that the approval of the application is solely in the hands of the MGB.
Benguet's arguments are bereft of merit.
Evidently, the RAWOP itself provides for the mode of royalty payment by Benguet. The fact that there was the previous practice whereby J.G. Realty picked-up the checks from Benguet is unavailing. The mode of payment is embodied in a contract between the parties. As such, the contract must be considered as the law between the parties and binding on both.26 Thus, after J.G. Realty informed Benguet of the bank account where deposits of its royalties may be made, Benguet had the obligation to deposit the checks. J.G. Realty had no obligation to furnish Benguet with a Board Resolution considering that the RAWOP itself provided for such payment scheme.
Notably, Benguet's claim that J.G. Realty must prove nonpayment of its royalties is both illogical and unsupported by law and jurisprudence.
In the instant case, the obligation of Benguet to pay royalties to J.G. Realty has been admitted and supported by the provisions of the RAWOP. Thus, the burden to prove such obligation rests on Benguet.
It should also be borne in mind that MPSA Application No. APSA-V-0009 has been pending with the MGB for a considerable length of time. Benguet, in the RAWOP, obligated itself to perfect the rights to the mining claims and/or otherwise acquire the mining rights to the mineral claims but failed to present any evidence showing that it exerted efforts to speed up and have the application approved. In fact, Benguet never even alleged that it continuously followed-up the application with the MGB and that it was in constant communication with the government agency for the expeditious resolution of the application. Such allegations would show that, indeed, Benguet was remiss in prosecuting the MPSA application and clearly failed to comply with its obligation in the RAWOP.
Based on the foregoing discussion, the cancellation of the RAWOP was based on valid grounds and is, therefore, justified. The necessary implication of the cancellation is the cessation of Benguet's right to prosecute MPSA Application No. APSA-V-0009 and to further develop such mining claims.
We have held that "[t]here is unjust enrichment when a person unjustly retains a benefit to the loss of another, or when a person retains money or property of another against the fundamental principles of justice, equity and good conscience." Article 22 of the Civil Code provides that "[e]very person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him." The principle of unjust enrichment under Article 22 requires two conditions: (1) that a person is benefited without a valid basis or justification, and (2) that such benefit is derived at another's expense or damage.
Clearly, there is no unjust enrichment in the instant case as the cancellation of the RAWOP, which left Benguet without any legal right to participate in further developing the mining claims, was brought about by its violation of the RAWOP. Hence, Benguet has no one to blame but itself for its predicament.
WHEREFORE, we DISMISS the petition, and AFFIRM the December 2, 2002 Decision and March 17, 2004 Resolution of the DENR-MAB in MAB Case No. 0124-01 upholding the cancellation of the June 1, 1987 RAWOP. No costs.
12 Id. at 8, 14 & 18, respectively.
13 G.R. No. 148267, August 8, 2002, 387 SCRA 128.
15 G.R. No. 134030, April 25, 2006, 488 SCRA 126, 133.
21 BF Corporation v. CA, G.R. No. 120105, March 27, 1998, 288 SCRA 267; Puromines v. CA, G.R. No. 91228, March 22, 1993, 220 SCRA 281; General Insurance and Surety Corporation v. Union Insurance Society of Canton, et al., G.R. NOS. 30475-76, November 22, 1989, 179 SCRA 530; Gascon v. Arroyo, G.R. No. 78389, October 16, 1989, 178 SCRA 582; Bengson v. Chan, No. L-27283, July 29, 1977, 78 SCRA 113; Mindanao Portland Cement Corporation v. McDonough Construction Company of Florida, No. L-23390, April 24, 1967, 19 SCRA 808.
23 G.R. No. 140960, January 20, 2003, 395 SCRA 451, 457-458.
25 Chan v. CA, G.R. No. 147999, February 27, 2004, 424 SCRA 127, 134.
26 CIVIL CODE, Arts. 1159 & 1308.
27 G.R. No. 116960, April 2, 1996, 256 SCRA 84, 89.
28 G.R. No. 138088, January 23, 2006, 479 SCRA 404, 412-413.

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