Province of Cagayan vs. Lara

A governor's permit is a mandatory prerequisite before any entity may legally undertake quarrying operations within a province, and the absence of such permit means the operator has no clear legal right protectable by injunction, notwithstanding the issuance of an ISAG Permit and ECC by national government agencies.

The Province of Cagayan, through its Governor Alvaro T. Antonio and Environmental and Natural Resources Officer Robert Adap, sought to enforce local quarrying regulations against respondent Joseph Lasam Lara, who held an Industrial Sand and Gravel Permit issued by the Mines and Geosciences Bureau (MGB) of the DENR and an Environmental Compliance Certificate from the DENR Environmental Management Bureau. The dispute centered on whether national-level permits suffice to authorize quarrying operations, or whether a separate governor's permit under Section 138 of the Local Government Code and Provincial Ordinance No. 2005-07 is a mandatory prerequisite.

On September 14, 2007, Joseph Lasam Lara obtained an Industrial Sand and Gravel Permit (ISAG Permit) from the Mines and Geosciences Bureau (MGB) of the Department of Environment and Natural Resources (DENR), authorizing him to conduct quarrying operations in a twenty-hectare area situated in Barangay Centro, Municipality of Peñablanca, Cagayan. For the same purpose, Lara also secured an Environmental Compliance Certificate (ECC) from the DENR Environmental Management Bureau (EMB).

On January 3, 2008, Lara's representative, Jovy Balisi, went to the Cagayan Provincial Treasurer's Office to pay the extraction fee and other fees for the quarrying operations, but she was directed to first secure an Order of Payment from Environmental and Natural Resources Officer Robert Adap (ENRO Adap). When Balisi approached ENRO Adap, the latter refused to issue an Order of Payment. Despite pleas from Balisi and Lara's counsel, Atty. Victorio N. Casauay, ENRO Adap remained adamant. Lara's counsel then tendered and deposited the amount of ₱51,500.00 with the Treasurer's Office corresponding to the extraction and related fees.

On January 11, 2008, Lara commenced quarrying operations. Later that day, however, four trucks loaded with sand and gravel extracted from the Permit Area were stopped and impounded by several local officials, including the Mayor of Peñablanca and Board Member Taguinod. Lara filed an action for injunction against those officials, docketed as Civil Case No. 7049, and obtained a writ of preliminary injunction enabling him to restart operations.

Nonetheless, on March 17, 2008, Lara received a Stoppage Order dated March 13, 2008 from Cagayan Governor Alvaro T. Antonio, directing him to cease quarrying for three reasons: (a) the ISAG Permit was not in accordance with RA 7942 (the Philippine Mining Act of 1995) and its implementing rules; (b) Lara's failure to pay the sand and gravel fee under Provincial Ordinance No. 2005-07; and (c) Lara's failure to secure all necessary permits or clearances from the local government unit as required by the ECC. Lara then filed the present action for injunction and damages before the RTC, docketed as Civil Case No. 7077.

The RTC granted Lara's application for a writ of preliminary injunction on August 11, 2008, finding a prima facie right to extract based on the ISAG Permit and ECC, and denied reconsideration on September 26, 2008. During pre-trial, the parties stipulated that Lara had secured the ISAG Permit and ECC, had deposited ₱51,500.00 with the Treasurer's Office, and that Governor Antonio had issued the Stoppage Order. The parties agreed that documentary evidence would suffice, and the RTC directed simultaneous memoranda. On June 30, 2009, the RTC made the writ permanent, holding that Lara legally acquired the right to operate, that Governor Antonio's proper recourse would have been to bring any perceived defect to the MGB rather than issuing a Stoppage Order, and that Lara's deposit constituted substantial compliance with the fee requirement.

• Compliance with ISAG Permit Terms: Petitioners argued that the mere issuance of the ISAG Permit does not give Lara the right to commence quarrying operations, as he still had to comply with its terms and conditions, including securing necessary permits and clearances from the local government unit concerned.
• Failure to Secure Local Permits and Pay Local Fees: Petitioners maintained that Lara had neither secured all necessary local permits nor paid the local fees and taxes required for quarrying operations.
• Governor's Duty to Enforce Laws: Petitioners contended that Governor Antonio was merely performing his duty to enforce all laws and ordinances relative to the governance of the Province of Cagayan pursuant to the provisions of RA 7160, the Local Government Code of 1991.

• Sufficiency of National Permits: Respondent maintained that the MGB and DENR-EMB had already authorized him to extract sand and gravel from the Permit Area, as evidenced by the ISAG Permit and ECC, thereby dispensing with the need to secure any permit from the local government.
• Bad Faith Refusal by Local Officials: Respondent contended that the only reason he failed to secure local permits was because local government officials deliberately refused to process his applications without any legitimate reason whatsoever.

• Propriety of Injunction: Whether the RTC properly issued the permanent injunction enjoining petitioners from stopping Lara's quarrying operations.
• Prerequisite of Governor's Permit: Whether a governor's permit is a mandatory prerequisite before one may legally engage in quarrying operations in a province, notwithstanding the possession of an ISAG Permit and ECC.

• Propriety of Injunction: No. The RTC committed grave abuse of discretion in issuing the permanent injunction because Lara had no clear legal right to conduct quarrying operations, having admittedly failed to secure the governor's permit required by Section 138 of the Local Government Code and Provincial Ordinance No. 2005-07.
• Prerequisite of Governor's Permit: Yes. A governor's permit is a mandatory prerequisite before any entity may legally undertake quarrying operations within a province; the ISAG Permit and ECC issued by national agencies do not dispense with this local law requirement.

• Propriety of Injunction: A writ of injunction issues only upon satisfaction of two requisites: (a) the existence of a right to be protected, and (b) acts violative of that right. In the absence of a clear legal right, the issuance of injunctive relief constitutes grave abuse of discretion. Injunction is not designed to protect contingent or future rights, and where the complainant's right is doubtful or disputed, injunction is not proper. Because Lara admittedly failed to secure the governor's permit, he had no clear legal right to conduct quarrying operations, and the RTC therefore erred in making the injunction permanent.

• Prerequisite of Governor's Permit: To legally undertake a quarrying business, an entity must comply with all requirements imposed not only by the national government but also by the local government unit where the business is situated. Section 138 of RA 7160 provides that the permit to extract sand, gravel, and other quarry resources shall be issued exclusively by the provincial governor, pursuant to the ordinance of the sangguniang panlalawigan. Consistent therewith, the Sangguniang Panlalawigan of Cagayan promulgated Provincial Ordinance No. 2005-07, Section 2H.04 of which prohibits any person from extracting quarry resources unless a permit has been issued by the Governor. A plain reading of these provisions shows that a governor's permit is a prerequisite before one can engage in quarrying in Cagayan. Records reveal that Lara admittedly failed to secure the same; hence, he had no right to conduct quarrying operations and was not entitled to any injunction. The Court declined to rule on the necessity of a mayor's permit, as that issue was pending in Civil Case No. 7049 before the court a quo.

• Requisites of Injunction — A writ of injunction issues upon the concurrence of two requisites: (a) the existence of a right to be protected, and (b) acts violative of that right. In the absence of a clear legal right, the issuance of injunctive relief constitutes grave abuse of discretion. Injunction is not designed to protect contingent or future rights; where the complainant's right is doubtful or disputed, injunction is not proper. The possibility of irreparable damage without proof of an actual existing right is not a ground for injunction. The Court applied this doctrine to find that Lara, lacking a governor's permit, had no clear legal right to protect, rendering the RTC's permanent injunction improper.

• Local Government Permit as Prerequisite to Quarrying — Under Section 138 of the Local Government Code, the permit to extract sand, gravel, and other quarry resources shall be issued exclusively by the provincial governor, pursuant to the ordinance of the sangguniang panlalawigan. This requirement is in addition to any national-level permits such as the ISAG Permit from the MGB and the ECC from the DENR-EMB. The Court applied this doctrine by holding that Lara's failure to secure the governor's permit meant he had no legal right to conduct quarrying operations, notwithstanding his national permits.

• "In the absence of a clear legal right, the issuance of the injunctive relief constitutes grave abuse of discretion. Injunction is not designed to protect contingent or future rights. Where the complainant's right is doubtful or disputed, injunction is not proper." — This passage articulates the controlling doctrine on the requisites of injunction and explains why the RTC's permanent injunction was improperly issued.

• "A plain reading of the afore-cited provisions clearly shows that a governor's permit is a pre-requisite before one can engage in a quarrying business in Cagayan." — This statement establishes the ratio decidendi that local government permits are mandatory prerequisites to quarrying operations, independent of national-level permits.

• BP Philippines, Inc. (Formerly Burmah Castrol Philippines, Inc.) vs. Clark Trading Corporation, G.R. No. 175284, September 19, 2012, 681 SCRA 365 — Cited as controlling authority for the two requisites of injunction: the existence of a right to be protected and acts violative of that right. The Court relied on this formulation to conclude that Lara, lacking a governor's permit, had no clear legal right and was therefore not entitled to injunctive relief.

• Section 138, Republic Act No. 7160 (Local Government Code of 1991) — Provides that the permit to extract sand, gravel, and other quarry resources shall be issued exclusively by the provincial governor, pursuant to the ordinance of the sangguniang panlalawigan. The Court held this provision makes a governor's permit a mandatory prerequisite to quarrying operations, which Lara failed to secure.

• Article H, Section 2H.04, Provincial Ordinance No. 2005-07 (Sangguniang Panlalawigan of Cagayan) — Provides that no person shall extract quarry resources from public lands or public waters unless a permit has been issued by the Governor. The Court applied this local ordinance in conjunction with Section 138 of the Local Government Code to establish that a governor's permit is required before quarrying in Cagayan.

• Republic Act No. 7942 (Philippine Mining Act of 1995) — Referenced in Governor Antonio's Stoppage Order as one of the grounds for stopping Lara's operations, on the assertion that the ISAG Permit was not in accordance with this law and its implementing rules.

Antonio T. Carpio (Chairperson), Arturo D. Brion, Mariano C. Del Castillo, and Jose Portugal Perez concurred with the opinion of the Second Division.