Liwat-Moya vs. Ermita

A pending MPSA application filed under P.D. No. 463 is deemed automatically cancelled by operation of law, without need for executive pronouncement, when the applicant fails to submit the required status report, letter of intent, and complete mandatory requirements within the non-extendible deadlines set under DMO No. 97-07 (15 September 1997 and 30 October 1997) pursuant to R.A. No. 7942; the three letters-notice rule under DMO No. 99-34 applies prospectively only to applications filed under R.A. No. 7942 and cannot revive applications already deemed cancelled by operation of law.

On 22 May 1991, petitioner Corazon Liwat-Moya filed an application for Mineral Production Sharing Agreement (MPSA) with the Mines and Geosciences Bureau covering 650 hectares of land located at Loreto, Surigao del Norte. At that time, P.D. No. 463 was the operative law. When R.A. No. 7942 took effect on 3 March 1995, petitioner's application was still pending with substantial but incomplete compliance. The law granted holders of pending applications preferential rights to enter into mineral agreements within two years from the promulgation of implementing rules, subject to compliance with specific requirements under DMO No. 97-07.

• On 22 May 1991, petitioner filed an application for Mineral Production Sharing Agreement (AMPSA No. SMR-013-96) with the Mines and Geosciences Bureau covering 650 hectares of land in Loreto, Surigao del Norte within the Surigao Mineral Reservation.
• Petitioner undertook required publications and alleged substantial compliance with mandatory documentary requirements.
• On 15 February 1993 and 19 February 1997, the MGB sent notice-letters requiring submission of additional requirements, to which petitioner did not respond.
• R.A. No. 7942 (Philippine Mining Act of 1995) took effect on 3 March 1995, granting preferential rights to holders of pending mining claims and applications.
• DENR Memorandum Order No. 97-07 was issued setting deadlines of 15 September 1997 for submission of status report and letter of intent, and 30 October 1997 for full compliance with mandatory requirements, with Section 14 providing that these deadlines shall not be subject to extension.
• Petitioner failed to submit the requirements under DMO No. 97-07 within the prescribed deadlines.
• On 24 November 1998 and 19 October 1999, the MGB sent letters-notice to petitioner regarding her failure to submit requirements, the latter being returned to sender with notation "addressee moved, no forwarding address."
• On 26 February 2001, the MGB issued an order denying petitioner's application for noncompliance with pertinent laws, rules, and regulations despite due notice.
• On 25 June 2001, respondent Rapid City Realty & Development Corporation filed exploration permit applications covering the same area previously applied for by petitioner.
• On 21 December 2004, petitioner filed a motion for reconsideration of the MGB order alleging improper service of letters-notice in violation of DMO No. 99-34.
• On 19 July 2005, the MGB denied the motion for reconsideration.
• On 13 June 2006, the DENR Secretary reversed the MGB order and reinstated petitioner's application, finding her assertions possessed "convincing validity."
• On 1 June 2007, the Office of the President, through Executive Secretary Eduardo Ermita, vacated the DENR Secretary's decision and ruled that petitioner's application was barred by laches and that RCRDC had the right to intervene.
• The Court of Appeals affirmed the Office of the President's decision on 30 September 2009.

• The Panel of Arbitrators has original and exclusive jurisdiction over private respondents' intervention as mandated by R.A. No. 7942, making the Office of the President an improper forum.
• The Court of Appeals erred in affirming the Office of the President's decision to rule on petitioner's exploration permit application which was not an issue in the case.
• The DENR Secretary correctly reinstated petitioner's AMPSA No. SMR-013-96 because her assertions "teem with convincing validity" and denial would violate her constitutional rights to due process.
• The service of letters-notice by the MGB was defective for failing to comply with the three letters-notice rule under DMO No. 99-34, which requires three notices with 15-30 days to comply and intervals of no more than 30 days between deadlines.
• The MGB's letters-notice sent on 24 November 1998 and 19 October 1999 were sent after the expiration of the deadline under DMO No. 97-07 and were one year apart, violating the three letters-notice rule.

• RCRDC is entitled to intervene because it has a substantial right to protect its Exploration Permit Application which covers areas previously assigned to petitioner.
• Petitioner's application was properly denied due to her negligence and laches, having failed to comply with mandatory requirements for over 10 years.
• Petitioner's MPSA application ipso facto expired when she failed to comply with the mandatory requirements within the non-extendible deadlines set under DMO No. 97-07.
• The deadlines under DMO No. 97-07 are mandatory and inextendible, and no executive action can extend them beyond what was stated in the memorandum order.

• Procedural Issues:
  • Whether the Panel of Arbitrators has original and exclusive jurisdiction over the issue of intervention by RCRDC, rendering the Office of the President an improper forum.
  • Whether the Office of the President and Court of Appeals properly ruled on the exploration permit application which was not the issue in the case.
• Substantive Issues:
  • Whether petitioner's MPSA application was properly denied due to her failure to comply with the requirements under DMO No. 97-07 within the prescribed deadlines.
  • Whether the three letters-notice rule under DMO No. 99-34 applies to applications filed under P.D. No. 463 and can cure the non-compliance with DMO No. 97-07 deadlines.
  • Whether the DENR Secretary had authority to reinstate petitioner's application after the lapse of the mandatory deadlines.

• Procedural:
  • The Court found it unnecessary to pass upon the issue of the propriety of RCRDC's resort to intervention because petitioner had already lost any right to her mining application by operation of law prior to the date RCRDC filed its EPA, and the DENR Secretary had no authority to reinstate her application.
• Substantive:
  • Petitioner's failure to submit the status report, letter of intent, and complete mandatory requirements within the deadlines under DMO No. 97-07 rendered her MPSA application ipso facto cancelled by operation of law pursuant to DMO No. 97-07 in relation to R.A. No. 7942 and DAO No. 96-40.
  • The deadlines set under DMO No. 97-07 (15 September 1997 and 30 October 1997) are mandatory and inextendible; no executive action can extend these deadlines.
  • The three letters-notice rule under DMO No. 99-34 applies prospectively only to applications filed under R.A. No. 7942 and cannot apply to applications filed under P.D. No. 463 which were already deemed cancelled by operation of law when DMO No. 99-34 was issued.
  • The DENR Secretary exceeded his authority when he directed the MGB to set a schedule for petitioner's compliance, as this effectively extended the deadline contrary to the express mandate of DMO No. 97-07.
  • The MGB's denial of the application was a valid exercise of administrative powers, grounded on petitioner's admitted noncompliance with requirements within the deadline set by the rules.

• Automatic Cancellation by Operation of Law — Failure to comply with mandatory requirements within non-extendible deadlines set under mining laws results in automatic cancellation of the application by operation of law without need for any executive action or pronouncement; the order of denial is merely confirmatory of the status mandated by law.
• Non-Retroactivity of Procedural Rules — The three letters-notice rule under DMO No. 99-34 applies only to applications filed under R.A. No. 7942 and cannot be applied retroactively to pending applications filed under P.D. No. 463 which were already deemed cancelled by operation of law when the new rule took effect.
• Constructive Notice of Published Administrative Rules — Duly published administrative rules and regulations which implement the law have the force and effect of that law and constitute constructive notice to the general public; their publication serves as notice to all affected parties.
• Administrative Powers of the MGB — The Mines and Geosciences Bureau has the authority to cancel or recommend cancellation of mining applications for non-compliance with pertinent laws, rules, and regulations; such grant or denial of applications is executive and administrative in nature and may not be interfered with by courts unless the authority has acted arbitrarily or with grave abuse of discretion.
• Laches in Mining Applications — Equity cannot favor a party who failed to act on an application for over ten years and only filed a motion for reconsideration three years after denial, especially when the non-compliance is with mandatory requirements for developing national resources.

• "Petitioner's failure to submit all the documentary requirements within the deadline rendered her MPSA application ipso facto cancelled pursuant to DMO No. 97-07 in relation to R.A. No. 7942."
• "The DENR Secretary exceeded his authority when he directed the MGB to set a schedule for petitioner's compliance with the lacking mandatory requirements, for in effect he extended the deadline, contrary to the express mandate of DMO No. 97-07."
• "No executive action can stretch the deadline beyond what was stated in the memorandum order, DMO 97-07."
• "Beyond October 30, 1997 all FTAA applications which failed to comply with the memorandum order expired and were deemed cancelled by operation of law."
• "It is well-settled that duly published administrative rules and regulations which implement the law that they have been entrusted to enforce have the force and effect of that law and are just as binding as if they have been written into the statute."

• Bonaventure Mining Corporation v. V.I.L. Mines, Inc. (584 Phil. 207) — Controlling precedent establishing that failure to comply with DMO No. 97-07 deadlines results in automatic cancellation of mining applications by operation of law, and that no government officer can extend deadlines declared as inextendible.
• Spouses Dacudao v. Secretary Gonzales (701 Phil. 96) — Cited for the principle that duly published administrative rules and regulations have the force and effect of law.
• Tañada v. Tuvera (230 Phil. 528) — Cited for the rule that publication of administrative rules serves as constructive notice to the general public.
• Basiana Mining Exploration Corp. v. Secretary of the DENR (G.R. No. 191705, 7 March 2016) — Cited for the definition of administrative powers as functions concerned with applying policies and enforcing orders.
• Republic of the Philippines v. Express Telecommunication Co., Inc. (424 Phil. 373) — Cited for the principle that grant or denial of applications, licenses, permits, and contracts are executive and administrative in nature.

• R.A. No. 7942 (Philippine Mining Act of 1995), Section 2 — Declaration of Policy stating it is State responsibility to promote rational exploration, development, utilization and conservation of mineral resources.
• R.A. No. 7942, Section 3(aq) — Definition of "Qualified person" requiring technical and financial capability to undertake mineral resources development.
• R.A. No. 7942, Section 9 — Authority of the Bureau to administer and dispose of mineral lands and mineral resources and to recommend granting of mineral agreements to qualified persons.
• R.A. No. 7942, Section 113 — Recognition of valid and existing mining claims and lease/quarry applications, granting preferential rights within two years from promulgation of implementing rules.
• DAO No. 96-40, Section 273 — Provides that failure to exercise preferential rights within the period constitutes automatic abandonment of mining claims and applications.
• DMO No. 97-07, Section 13 — Mandates submission of status report and letter of intent by 15 September 1997 and complete compliance by 30 October 1997, with failure causing denial of applications.
• DMO No. 97-07, Section 14 — Explicitly states that the deadline set and all other periods prescribed shall not be subject to extension.
• DMO No. 99-34, Section 8 — Three Letters-Notice Policy requiring three notices with specific intervals for compliance with mining application requirements.
• P.D. No. 463 — Mineral Resources Development Decree of 1974, the operative law when petitioner filed her application.