Section 26-35-Francisco Villanueva and Narra Nickel

7/25/2019 Section 26-35-Francisco Villanueva and Narra Nickel

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THIRD DIVISION

[G.R. NO. 180197 : June 23, 2009]

FRANCISCO N. VILLAN!VA, Petitioner , v. VIRGILIO ".#ALAG!R $n% INT!RCONTIN!NTAL #ROADCASTING

COR"ORATION CHANN!L&13, Respondents.

D ! C I S I O N

'NAR!S&SANTIAGO, J.:

Assailed is the August 10, 2007 Decision1 of the Court of Appeals in

CA-G.R. CV No. 1!"7 #hich re$ersed the %cto&er 2', 200(Decision and )e&ruar* 2, 200+ Resolution of the Regional rial Court

of ueon Cit*, /ranch ' finding petitioner )rancisco N. Villanue$a

entitled to daages. Also assailed is the %cto&er 1!, 2007

Resolution2 den*ing the otion for reconsideration.

%n arch (1, 1''2, petitioner )rancisco N. Villanue$a, then

Assistant anager for %perations of ntercontinental /roadcasting

Corporation-Channel 1( 3/C-1(4 #as disissed fro eplo*ent

on the ground of loss of confidence for purportedl* selling forged

certificates of perforance. Contesting his terination, petitioner

filed a coplaint for illegal disissal &efore the National 5a&or

Relations Coission.

During the pendenc* of the la&or case, ne#s articles a&out

irregularities in /C-1( #ere pu&lished in the 6ul* 1, 1''2 issue of

the anila ies and the hilippine 8tar, and in the 6ul* 1', 1''2

issue of the anila /ulletin.

n these ne#s articles, respondent Virgilio . /alaguer, then

resident of /C-1(, #as 9uoted to ha$e said that he unco$ered

$arious anoalies in /C-1( during his tenure #hich led to the

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disissal of an operations e:ecuti$e for selling forged certificates of

perforance.

n the anila ies, on 6ul* 1, 1''2;(

Anoalies at /C-1( unco$ered

N8D<R pilferage, al$ersation, o$erpricing and other irregularities

ha$e cost go$ernent-o#ned ntercontinental /roadcasting

Corporation 3/C4 1( ore than 10 illion in losses for the period

1'!-1''.

Gil . /alaguer, /C president, unco$ered the anoalies after a long

and painsta=ing in$estigation #hen he too= o$er the copan* in1''0.

he in$estigation unco$ered irregularities ranging fro selling

forged certificates of perforance 3C>s4 to non-reittance of sales

collections, illegal and unauthoried airing of o$ie trailer

ad$ertiseents 3A>s4, illegal leasing of electricit* and achines to

?friendl* clients,? illions #orth of undocuented transactions to

o$ie suppliers, e:or&itant fees against in-house productions,a&used o$ertie charges &* certain eplo*ees.

he anoalies did not escape /alaguer #hen he cae to /C-1(

&ac=ed &* hands-on e:perience in tele$ision anageent #or=.

/C has had four presidents since 1'! after the <D8A re$olution.

/alaguer is the fifth president.

A special in$estigati$e coittee helped /alaguer unco$er theanoalies in /C. t led to the disissal of an operations e:ecuti$e

#ho sold forged certificates of perforance, a forer super$isor

#ho poc=eted /C>s sales collections, and station anagers #ho did

not reit pa*ents on radio ad$ertiseents.





%ther anoalies coitted against the go$ernent station include

the loose issuance of technical facilities orders 3)%>s4 #hich

practicall* leased the net#or=>s &roadcast facilities to a ?friendl*

client? for free.

/alaguer, sources said, succeeded in sta*ing as president &ecause of

his technical e:pertise in edia and counications and his

?anagerial #ill? to cleanse the ran=s of the fir. 3Emphasis

supplied 4crala#li&rar*

n the hilippine 8tar, on 6ul* 1, 1''2;+

/C president unco$ers anoalies at t$ net#or=

he go$ernent-o#ned nternational /roadcasting Corp.-Channel

1( lost ore than 10 illion due to insider pilferage,

al$ersation, o$erpricing and other irregularities fro 1'! to

1''.

/C president Gil . /alaguer unco$ered the anoalies after ?a long

and painsta=ing in$estigation? #hen he too= o$er the tele$ision

station in 1''0.

/alaguer, in a stateent, said the irregularities unco$ered included

the sale of forged certificates of perforance, non-reittance of

sales collections, illegal and unauthoried airing of o$ie

ad$ertiseents, illegal lease of e9uipent to ?friendl*? clients,

e:or&itant fees on in-house productions and a&used o$ertie

charges &* soe eplo*ees.

/alaguer, the fifth /C president since 1'!, easil* detected theanoalies as he has a $ast e:perience in tele$ision anageent

#or=.

A special in$estigati$e coittee helped /alaguer unco$er the

anoalies at /C, #hich has resulted in the disissal of an





operations e:ecuti$e #ho sold forged certificates of perforance, a

forer super$isor #ho poc=eted sales collections and a station

anager #ho did not reit pa*ents on radio ad$ertiseents.

3Emphasis supplied 4crala#li&rar*

n the anila /ulletin, on 6ul* 1', 1''2;"

8e9uestered fir>s losses &ared

he ntercontinental /roadcasting Corp. 3/C4 1(, a se9uestered

fir, lost ore than 10 illion for the period 1'!-1'' due to

pilferage, al$ersation, o$er-pricing, and other irregularities

perpetrated &* a s*ndicate, according to Gil . /alaguer, /C

president, #ho too= o$er the copan* in 1''0.

@e said the irregularities ranged fro selling forged certificates of

perforance to non-reittance of sales collections, illegal and

unauthoried airing of o$ie trailer ad$ertiseents, illegal leasing

of electricit* and achines to ?friendl* clients,? illions #orth of

undocuented transactions to o$ie suppliers, e:or&itant fees

against in-house productions, and a&used o$ertie charges &*

certain eplo*ees.

/C has had four presidents since 1'!, /alaguer &eing the fifth.

A special pro&e coittee that helped /alaguer said one disissed

e:ecuti$e sold forged certificates of perforance, a forer

super$isor poc=eted /C sales collections, and soe station

anagers did not reit pa*ents on radio ad$ertiseents.

he loose issuance of technical facilities orders practicall* leased thenet#or=>s &roadcast facilities to a ?friendl* client? for free.

/alaguer is credited #ith accelerating the net#or=>s ran= fro

nu&er fi$e in 1' to nu&er t#o or three under current ratings,





despite the efforts of soe holdouts #ho tried to derail his

adinistration. 3Emphasis supplied 4crala#li&rar*

n a letter dated 6ul* 20, 1''2, petitioner urged respondents to

confir or den* if he #as the person alluded to in the ne#s articleas the operations e:ecuti$e of /C-1( #ho #as disissed for selling

forged certificates of perforance.! None of the respondents replied

to the letter.

%n 8epte&er 2", 1''2, petitioner filed &efore the Regional rial

Court of ueon Cit* a coplaint for daages against

/alaguer,7 #hich #as later aended &* ipleading /C-1( as

additional defendant.

etitioner claied that respondents caused the pu&lication of the

su&ect ne#s articles #hich defaed hi &* falsel* and aliciousl*

referring to hi as the /C-1( operations e:ecuti$e #ho sold forged

certificates of perforance.' @e alleged that in causing these false

and alicious pu&lications, respondents $iolated Articles 1', 20, 21,

and 2! of the Ci$il Code.10

/alaguer denied that he had an*thing to do #ith thepu&lications.11 @o#e$er, he argued that the pu&lications are not

actiona&le &ecause the* are true and #ithout aliceB12 are of

legitiate pu&lic concern and interest &ecause /C-1( is under

se9uestrationB that petitioner is a ne#s#orth* and pu&lic

figureB1( and that the* are pri$ileged counication.1+ /alaguer

filed a counterclai against petitioner for alleged alicious filing of

the ci$il case.1"

/C-1( also denied participation in the pu&lications. t claied that

assuing press stateents #ere issued during a press conference,

the sae #as done solel* &* /alaguer #ithout its authorit* or

sanction.1! /C-1( also filed a counterclai against petitioner17and a

cross-clai against /alaguer.1






























%n August (1, 1''(, the 5a&or Ar&iter rendered a Decision1' finding

petitioner>s disissal as illegal, #hich #as affired &* the National

5a&or Relations Coission. he Coission, ho#e$er, declared

respondents to &e acting in good faith, hence, it deleted the a#ard

of oral and e:eplar* daages. %n Dece&er !, 1''+, theparties entered into a Coproise Agreeent,20 #ith /C-1(

proposing a schee of pa*ent for petitioner>s onetar* clais,

and #ith /C-1( and petitioner #ai$ing an* and all clais against

each other arising out of the la&or case.

%n %cto&er 2', 200(, the Regional rial Court21 of ueon Cit* held

that petitioner is entitled to an a#ard of daages,22 thus;

@<R<)%R<, preises considered, udgent is rendered in fa$or of

plaintiff )rancisco N. Villanue$a and against defendants /alaguer

and ntercontinental /roadcasting Corporation 3/C-1(4.

Accordingl*, defendants are here&* ordered to pa* the plaintiff

ointl* and se$erall*, as follo#s;

14 the su of )i$e @undred housand 3"00,000.004 esos &* #a*

of oral daagesB

24 the su of %ne @undred housand 3100,000.004 esos as and

&* #a* of e:eplar* daagesB

(4 the su of hirt* housand 3(0,000.004 esos &* #a* of

noinal daagesB

+4 the su of en housand 310,000.004 esos &* #a* of

teperate or oderate daagesB and

"4 the su of %ne @undred housand 3100,000.004 esos as and

&* #a* of attorne*>s fees.

ith costs against defendants.











8% %RD<R<D.2(

Respondents o$ed for reconsideration &ut it #as denied.2+ @ence,

the* appealed to the Court of Appeals #hich rendered the herein

assailed Decision on August 10, 2007, disposing thus;

@<R<)%R<, preises considered, the appeal is here&* GRAN<D.

he %cto&er 2', 200( Decision and the )e&ruar* 2, 200+ Resolution

#ith Clarification issued &* the Regional rial Court, /r. ', National

Capital 6udicial Region, ueon Cit*, are here&* R<V<R8<D. he

Coplaint, the Counterclai, and the Cross-clai in Ci$il Case No.

-'2-1(!0 are here&* D888<D.

8% %RD<R<D.2"

etitioner>s otion for reconsideration #as denied. @ence, the

instant petition raising the follo#ing issues;2!

a4 Does the failure of the addressee to respond to a letter

containing stateents attri&uting to hi coission of acts

constituting actiona&le #rong, hence, ad$erse to his interest, and of

such nature as #ould call for his reaction, repl*, or coent ifuntrue, constitute his adission of said stateents, conse9uentl*,

a* &e used in e$idence against hi crala#red

&4 s the adission &* a principal adissi&le against its agent s

the adission &* a person ointl* interested #ith a part* adissi&le

against the latter crala#red

c4 Does the failure of an indi$idual to diso#n the attri&ution to hi

&* ne#spaper pu&lications, as the source of defaator* ne#spaperreports, #hen he is free and $er* a&le to do so, constitute

adission that he, indeed, #as the source of the said defaator*

ne#s reports

he petition lac=s erit.











As earl* as 1'0", this Court has declared that it is the dut* of the

part* see=ing to enforce a right to pro$e that their right actuall*

e:ists. n $ar*ing language, our Rules of Court, in spea=ing of

&urden of proof in ci$il cases, states that each part* ust pro$e his

o#n affirati$e allegations and that the &urden of proof lies on thepart* #ho #ould &e defeated if no e$idence #ere gi$en on either

side.27 hus, in ci$il cases, the &urden of proof is generall* on the

plaintiff, #ith respect to his coplaint.2

n pro$ing his clai, petitioner relied on the 6ul* 20, 1''2 letter, the

ne#spaper articles, and the alleged adission of respondents.

/ased on the a&o$e pieces of e$idence, the Court finds that

petitioner #as una&le to discharge his &urden of proof. As such, theCourt of Appeals properl* disissed the coplaint for daages.

he 6ul* 20, 1''2 letter sent &* petitioner to respondents reads as

follo#s;2'

20 6ul* 1''2

r. Virgilio /alaguer

ntercontinental /roadcasting Corporation/roadcast Cit*, Capitol @ills

Dilian, ueon Cit*

Dear r. /alaguer;

e #rite on &ehalf of our client, r. )rancisco N. Villanue$a.

Eou ha$e caused to &e pu&lished in the 1 6ul* 1''2 issue of he

hilippine 8tar and 1' 6ul* 1''2 issue of anila /ulletin, a ne#site #herein *ou stated that *ou disissed an %perations <:ecuti$e

&ecause he ?sold forged Certificate of erforance?. %ur iediate

ipression is, *ou are referring to our client, )rancisco N.

Villanue$a, &ecause he is the onl* %perations <:ecuti$e in /C,

Channel 1( *ou ha$e illegall* and despoticall* disissed.









e urge *ou, therefore, to infor us, #ithin fort*-eight 3+4 hours

fro *our receipt of this letter that the %perations <:ecuti$e *ou

referred to in *our press stateent is not our client, )rancisco N.

Villanue$a. e shall construe *our failureFrefusal to repl* as *our

une9ui$ocal adission that *ou are, in fact, actuall* referring to ourclient, r. )rancisco N. Villanue$a, as the operations e:ecuti$e #ho

?sold forged Certificate of erforance?. Accordingl*, #e shall

iediatel* proceed to ta=e appropriate criinal and ci$il court

actions against *ou #ithout further notice.

Ver* trul* *ours,

3signed4

R< G. RC%

cc; r. )rancisco N. Villanue$a

/oard of Adinistrators, /C-1(

etitioner argues that &* not responding to the a&o$e letter #hich

e:pressl* urged the to repl* if the stateents therein contained

are untrue, respondents in effect aditted the atters stated

therein, pursuant to the rule on adission &* silence in 8ec. (2,Rule 1(0,(0 and the disputa&le presuption that ac9uiescence

resulted fro a &elief that the thing ac9uiesced in #as confora&le

to the la# or fact.(1

etitioner>s arguent lac=s erit. %ne cannot pro$e his clai &*

placing the &urden of proof on the other part*. ndeed, ?3a4 an

cannot a=e e$idence for hiself &* #riting a letter containing the

stateents that he #ishes to pro$e. @e does not a=e the letter

e$idence &* sending it to the part* against #ho he #ishes to

pro$e the facts Hstated thereinI. @e no ore can ipose a dut* to

ans#er a charge than he can ipose a dut* to pa* &* sending

goods. herefore a failure to ans#er such ad$erse assertions in the







a&sence of further circustances a=ing an ans#er re9uisite or

natural has no effect as an adission.?(2

oreo$er, the rule on adission &* silence applies to ad$erse

stateents in #riting if the part* #as carr*ing on a utualcorrespondence #ith the declarant. @o#e$er, if there #as no such

utual correspondence, the rule is rela:ed on the theor* that #hile

the part* #ould ha$e iediatel* reacted &* a denial if the

stateents #ere orall* ade in his presence, such propt response

can generall* not &e e:pected if the part* still has to resort to a

#ritten repl*.((

n the sae anner, #e also cannot assue an adission &*

silence on the part of /alaguer &* $irtue of his failure to protest or

disclai the attri&ution to hi &* the ne#spapers that he is the

source of the articles. As e:plained a&o$e, the rule on adission &*

silence is rela:ed #hen the stateent is not ade orall* in one>s

presence or #hen one still has to resort to a #ritten repl*, or #hen

there is no utual correspondence &et#een the parties.

As for the pu&lications thesel$es, ne#spaper articles purporting to

state #hat the defendant said are inadissi&le against hi, since hecannot &e held responsi&le for the #ritings of third persons.(+ As

correctl* o&ser$ed &* the Court of Appeals, ?#hile the su&ect ne#s

ites indicated that /alaguer #as the source of the colunists,

pro$ing that he trul* ade such stateents is another

atter.?(" etitioner failed to pro$e that /alaguer did a=e such

stateents.

Nota&l*, petitioner did not iplead the editorial staff and thepu&lisher of the alleged defaator* articles.(! Contrar* to

petitioner>s assertion, he should ha$e at least presented the authors

of the ne#s articles as #itnesses to pro$e his case against

respondents in the a&sence of an e:press adission &* the latter

that the su&ect ne#s articles ha$e &een caused &* the.













etitioner also clais that respondents ha$e aditted that the* held

a press conference and caused the pu&lication of the ne#s articles,

&ased on the follo#ing testion* of /alaguer;(7

AE. 6<N<J;

%=a*, 5et e as= another 9uestion. No# r. /alaguer this

pu&lication referred to so called anoalies of 1'! to 1'' no# ho#

a&out the terination.

A; 1''1.

AE. 6<N<J;

Ees.

N<88;

thin= the terination of r. Villanue$a has nothing to do #ith that

press stateent release &ecause the period that co$ers that report

is fro specific date 1'! to 1''. 38N, 07 No$e&er 2000, p. 1'4

Adissions, ho#e$er, should &e clear and una&iguous(

#hich canhardl* &e said of /alaguer>s a&o$e testion*. f /alaguer intended

to adit the allegation that he conducted a press conference and

caused the pu&lication of the ne#s articles, he could ha$e done so.

nstead, /alaguer specificall* denied these allegations in paragraphs

+ and " of his Ans#er.('

etitioner ne:t argues that /C-1(>s Cross-Clai against /alaguer,

in that;+0

11. he acts coplained of &* the plaintiff #ere done solel* &* co-

defendant /alaguer.

/alaguer resorted to these things in his attept to sta$e off his

ipending reo$al fro /C.











is an adission &* /C-1(, #hich is adissi&le against /alaguer

pursuant to 8ec. 2', Rule 1(0+1 as an adission &* a co-partner or

an agent.

etitioner is ista=en. /C-1(>s cross-clai against /alaguereffecti$el* created an ad$erse interest &et#een the. @ence, the

adission of one defendant is not adissi&le against his co-

defendant. /esides, as alread* discussed, the alleged acts iputed

to /alaguer #ere ne$er pro$en to ha$e &een coitted, uch less

aliciousl*, &* /alaguer. alice or &ad faith iplies a conscious and

intentional design to do a #rongful act for a dishonest purpose or

oral o&li9uit*. 8uch ust &e su&stantiated &* e$idence.+2

n su, #e find that petitioner failed to discharge his &urden of

proof. No satisfactor* e$idence #as presented to pro$e &*

preponderance of e$idence that respondents coitted the acts

iputed against the. As such, there is no ore need to discuss

#hether the assailed stateents are defaator*.KLMrO&lPQ SrTUMl lMlS&rMrW

@<R<)%R<, the petition is D<N<D. he August 10, 2007 Decision

of the Court of Appeals in CA-G.R. CV No. 1!"7 re$ersing the

%cto&er 2', 200( Decision and )e&ruar* 2, 200+ Resolution of theRegional rial Court of ueon Cit*, /ranch ', finding petitioner

entitled to daages, as #ell as the %cto&er 1!, 2007 Resolution

den*ing the otion for reconsideration, are A))R<D.

SO ORD!R!D.

G.R. No. 195580 April 21, 2014

NARRA NICKEL MINING AND DEVELOPMENT CORP., TESORO MINING AND DEVELOPMENT,INC., !" MCART#$R MINING, INC., Petitioners,vs.REDMONT CONSOLIDATED MINES CORP., Respondent.

D E C I S I O N

VELASCO, %R., J.:







Before this Court is a Petition for Review on Certiorari under Rule 45 filed ! Narra Ni"#el and$inin% Develop&ent Corp. 'Narra(, )esoro $inin% and Develop&ent, In". ')esoro(, and $"*rthur$inin% In". '$"*rthur(, whi"h see#s to reverse the O"toer +, -+- De"ision+ and the eruar! +5,-++ Resolution of the Court of *ppeals 'C*(.

)he a"ts

So&eti&e in De"e&er --/, respondent Red&ont Consolidated $ines Corp. 'Red&ont(, ado&esti" "orporation or%ani0ed and e1istin% under Philippine laws, too# interest in &inin% ande1plorin% "ertain areas of the provin"e of Palawan. *fter in2uirin% with the Depart&ent ofEnviron&ent and Natural Resour"es 'DENR(, it learned that the areas where it wanted to underta#ee1ploration and &inin% a"tivities where alread! "overed ! $ineral Produ"tion Sharin% *%ree&ent'$PS*( appli"ations of petitioners Narra, )esoro and $"*rthur.

Petitioner $"*rthur, throu%h its prede"essor3in3interest Sara $arie $inin%, In". 'S$$I(, filed anappli"ation for an $PS* and E1ploration Per&it 'EP( with the $ines and eo3S"ien"es Bureau'$B(, Re%ion I3B, Offi"e of the Depart&ent of Environ&ent and Natural Resour"es 'DENR(.

Suse2uentl!, S$$I was issued $PS*3*$*3IB3+56 "overin% an area of over +,78 he"tares inBaran%a! Su&ilin%, $uni"ipalit! of Batara0a, Provin"e of Palawan and EP*3IB344 whi"h in"ludesan area of 6,7- he"tares in Baran%a! $alata%ao, Batara0a, Palawan. )he $PS* and EP were thentransferred to $adride9os $inin% Corporation '$$C( and, on Nove&er /, --/, assi%ned topetitioner $"*rthur.

Petitioner Narra a"2uired its $PS* fro& *lpha Resour"es and Develop&ent Corporation andPatri"ia :ouise $inin% ; Develop&ent Corporation 'P:$DC( whi"h previousl! filed an appli"ation for an $PS* with the $B, Re%ion I3B, DENR on <anuar! /, +==. )hrou%h the said appli"ation, theDENR issued $PS*3I3+3+ "overin% an area of 6.77 he"tares in aran%a!s Calate%as and SanIsidro, $uni"ipalit! of Narra, Palawan. Suse2uentl!, P:$DC "onve!ed, transferred and>or assi%nedits ri%hts and interests over the $PS* appli"ation in favor of Narra.

*nother $PS* appli"ation of S$$I was filed with the DENR Re%ion I3B, laeled as $PS*3*$*3IB3+54 'for&erl! EP*3IB347( over 6,4- he"tares in Baran%a!s $alinao and Prin"esa ?rdu9a,$uni"ipalit! of Narra, Provin"e of Palawan. S$$I suse2uentl! "onve!ed, transferred and assi%nedits ri%hts and interest over the said $PS* appli"ation to )esoro.

On <anuar! , --7, Red&ont filed efore the Panel of *ritrators 'PO*( of the DENR three '6(separate petitions for the denial of petitioners@ appli"ations for $PS* desi%nated as *$*3IB3+56,

*$*3IB3+54 and $PS* I3+3+.

In the petitions, Red&ont alle%ed that at least /-A of the "apital sto"# of $"*rthur, )esoro and Narraare owned and "ontrolled ! $B$I Resour"es, In". '$B$I(, a +--A Canadian "orporation.Red&ont reasoned that sin"e $B$I is a "onsiderale sto"#holder of petitioners, it was the drivin%

for"e ehind petitioners@ filin% of the $PS*s over the areas "overed ! appli"ations sin"e it #nowsthat it "an onl! parti"ipate in &inin% a"tivities throu%h "orporations whi"h are dee&ed ilipino"iti0ens. Red&ont ar%ued that %iven that petitioners@ "apital sto"#s were &ostl! owned ! $B$I,the! were li#ewise dis2ualified fro& en%a%in% in &inin% a"tivities throu%h $PS*s, whi"h arereserved onl! for ilipino "iti0ens.

In their *nswers, petitioners averred that the! were 2ualified persons under Se"tion 6'a2( ofRepuli" *"t No. 'R*( 7=4 or the Philippine $inin% *"t of +==5 whi"h provided

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Se". 6 Definition of )er&s. *s used in and for purposes of this *"t, the followin% ter&s, whether insin%ular or plural, shall &ean

1 1 1 1

'a2( ualified person &eans an! "iti0en of the Philippines with "apa"it! to "ontra"t, or a

"orporation, partnership, asso"iation, or "ooperative or%ani0ed or authori0ed for the purpose ofen%a%in% in &inin%, with te"hni"al and finan"ial "apailit! to underta#e &ineral resour"esdevelop&ent and dul! re%istered in a""ordan"e with law at least si1t! per "ent '/-A( of the "apital of whi"h is owned ! "iti0ens of the Philippines Provided, )hat a le%all! or%ani0ed forei%n3owned"orporation shall e dee&ed a 2ualified person for purposes of %rantin% an e1ploration per&it,finan"ial or te"hni"al assistan"e a%ree&ent or &ineral pro"essin% per&it.

*dditionall!, the! stated that their nationalit! as appli"ants is i&&aterial e"ause the! also appliedfor inan"ial or )e"hni"al *ssistan"e *%ree&ents ')**( deno&inated as *)*3IB3-= for$"*rthur, *)*3IB3-8 for )esoro and *)*3IB3-7 for Narra, whi"h are %ranted to forei%n3owned"orporations. Nevertheless, the! "lai&ed that the issue on nationalit! should not e raised sin"e$"*rthur, )esoro and Narra are in fa"t Philippine Nationals as /-A of their "apital is owned !

"iti0ens of the Philippines. )he! asserted that thou%h $B$I owns 4-A of the shares of P:$C 'whi"howns 5,==7 shares of Narra(,6 4-A of the shares of $$C 'whi"h owns 5,==7 shares of$"*rthur(4 and 4-A of the shares of S:$C 'whi"h, in turn, owns 5,==7 shares of )esoro(,5 theshares of $B$I will not &a#e it the owner of at least /-A of the "apital sto"# of ea"h of petitioners.)he! added that the est tool used in deter&inin% the nationalit! of a "orporation is the "ontrol test,e&odied in Se". 6 of R* 7-4 or the orei%n Invest&ents *"t of +==+. )he! also "lai&ed that thePO* of DENR did not have 9urisdi"tion over the issues in Red&ont@s petition sin"e the! are notenu&erated in Se". 77 of R* 7=4. inall!, the! stressed that Red&ont has no personalit! to suethe& e"ause it has no pendin% "lai& or appli"ation over the areas applied for ! petitioners.

On De"e&er +4, --7, the PO* issued a Resolution dis2ualif!in% petitioners fro& %ainin% $PS*s.It held

IFt is "learl! estalished that respondents are not 2ualified appli"ants to en%a%e in &inin% a"tivities.On the other hand, Red&ontF havin% filed its own appli"ations for an EP* over the areas earlier"overed ! the $PS* appli"ation of respondents &a! e "onsidered if and when the! are 2ualifiedunder the law. )he violation of the re2uire&ents for the issuan"e and>or %rant of per&its over &inin%areas is "learl! estalished thus, there is reason to elieve that the "an"ellation and>or revo"ation ofper&its alread! issued under the pre&ises is in order and open the areas "overed to other 2ualifiedappli"ants.

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GHEREORE, the Panel of *ritrators finds the Respondents, $"*rthur $inin% In"., )esoro $inin%and Develop&ent, In"., and Narra Ni"#el $inin% and Develop&ent Corp. as, DIS?*:IIED for

ein% "onsidered as orei%n Corporations. )heir $ineral Produ"tion Sharin% *%ree&ent '$PS*( arehere! 1 1 1 DEC:*RED N?:: *ND OID./

)he PO* "onsidered petitioners as forei%n "orporations ein% effe"tivel! "ontrolled ! $B$I, a+--A Canadian "o&pan! and de"lared their $PS*s null and void. In the sa&e Resolution, it %avedue "ourse to Red&ont@s EP*s. )hereafter, on eruar! 7, --8, the PO* issued an Order 7 den!in%the $otion for Re"onsideration filed ! petitioners.














*%%rieved ! the Resolution and Order of the PO*, $"*rthur and )esoro filed a 9oint Noti"e of *ppeal8 and $e&orandu& of *ppeal= with the $ines *d9udi"ation Board '$*B( while Narraseparatel! filed its Noti"e of *ppeal+- and $e&orandu& of *ppeal.++

In their respe"tive &e&orandu&, petitioners e&phasi0ed that the! are 2ualified persons under thelaw. *lso, throu%h a letter, the! infor&ed the $*B that the! had their individual $PS* appli"ations

"onverted to )**s. $"*rthur@s )** was deno&inated as *)*3IB3-=+ on $a! --7, while)esoro@s $PS* appli"ation was "onverted to *)*3IB3-8+6 on $a! 8, --7, and Narra@s )** was"onverted to *)*3IB3-7+4 on $ar"h 6-, --/.

Pendin% the resolution of the appeal filed ! petitioners with the $*B, Red&ont filed aCo&plaint+5 with the Se"urities and E1"han%e Co&&ission 'SEC(, see#in% the revo"ation of the"ertifi"ates for re%istration of petitioners on the %round that the! are forei%n3owned or "ontrolled"orporations en%a%ed in &inin% in violation of Philippine laws. )hereafter, Red&ont filed onSepte&er +, --8 a $anifestation and $otion to Suspend Pro"eedin% efore the $*B pra!in% forthe suspension of the pro"eedin%s on the appeals filed ! $"*rthur, )esoro and Narra.

Suse2uentl!, on Septe&er 8, --8, Red&ont filed efore the Re%ional )rial Court of ue0on Cit!,

Bran"h = 'R)C( a Co&plaint+/

for in9un"tion with appli"ation for issuan"e of a te&porar! restrainin%order ')RO( and>or writ of preli&inar! in9un"tion, do"#eted as Civil Case No. -83/667=. Red&ontpra!ed for the deferral of the $*B pro"eedin%s pendin% the resolution of the Co&plaint efore theSEC.

But efore the R)C "an resolve Red&ont@s Co&plaint and appli"ations for in9un"tive reliefs, the $*Bissued an Order on Septe&er +-, --8, findin% the appeal &eritorious. It held

GHEREORE, in view of the fore%oin%, the $ines *d9udi"ation Board here! REERSES andSE)S *SIDE the Resolution dated +4 De"e&er --7 of the Panel of *ritrators of Re%ion I3B'$I$*ROP*( in PO*3DENR Case Nos. --+3-+, --73- and --73-6, and its Order dated -7eruar! --8 den!in% the $otions for Re"onsideration of the *ppellants. )he Petition filed !Red&ont Consolidated $ines Corporation on - <anuar! --7 is here! ordered DIS$ISSED.+7

Belatedl!, on Septe&er +/, --8, the R)C issued an Order +8 %rantin% Red&ont@s appli"ation for a)RO and settin% the "ase for hearin% the pra!er for the issuan"e of a writ of preli&inar! in9un"tion onSepte&er +=, --8.

$eanwhile, on Septe&er , --8, Red&ont filed a $otion for Re"onsideration+= of the Septe&er+-, --8 Order of the $*B. Suse2uentl!, it filed a Supple&ental $otion for Re"onsideration - onSepte&er =, --8.

Before the $*B "ould resolve Red&ont@s $otion for Re"onsideration and Supple&ental $otion forRe"onsideration, Red&ont filed efore the R)C a Supple&ental Co&plaint + in Civil Case No. -83/667=.

On O"toer /, --8, the R)C issued an Order %rantin% the issuan"e of a writ of preli&inar!in9un"tion en9oinin% the $*B fro& finall! disposin% of the appeals of petitioners and fro& resolvin%Red&ont@s $otion for Re"onsideration and Supple&ent $otion for Re"onsideration of the $*B@sSepte&er +-, --8 Resolution.






































On <ul! +, --=, however, the $*B issued a se"ond Order den!in% Red&ont@s $otion forRe"onsideration and Supple&ental $otion for Re"onsideration and resolvin% the appeals filed !petitioners.

Hen"e, the petition for review filed ! Red&ont efore the C*, assailin% the Orders issued ! the$*B. On O"toer +, -+-, the C* rendered a De"ision, the dispositive of whi"h reads

GHEREORE, the Petition is P*R)I*:: R*N)ED. )he assailed Orders, dated Septe&er +-,--8 and <ul! +, --= of the $inin% *d9udi"ation Board are reversed and set aside. )he findin%s ofthe Panel of *ritrators of the Depart&ent of Environ&ent and Natural Resour"es that respondents$"*rthur, )esoro and Narra are forei%n "orporations is upheld and, therefore, the re9e"tion of theirappli"ations for $ineral Produ"t Sharin% *%ree&ent should e re"o&&ended to the Se"retar! of theDENR.

Gith respe"t to the appli"ations of respondents $"*rthur, )esoro and Narra for inan"ial or)e"hni"al *ssistan"e *%ree&ent ')**( or "onversion of their $PS* appli"ations to )**, the&atter for its re9e"tion or approval is left for deter&ination ! the Se"retar! of the DENR and thePresident of the Repuli" of the Philippines.

SO ORDERED.6

In a Resolution dated eruar! +5, -++, the C* denied the $otion for Re"onsideration filed !petitioners.

*fter a "areful review of the re"ords, the C* found that there was dout as to the nationalit! ofpetitioners when it reali0ed that petitioners had a "o&&on &a9or investor, $B$I, a "orporation"o&posed of +--A Canadians. Pursuant to the first senten"e of para%raph 7 of Depart&ent of<usti"e 'DO<( Opinion No. --, Series of --5, adoptin% the +=/7 SEC Rules whi"h i&ple&entedthe re2uire&ent of the Constitution and other laws pertainin% to the e1ploitation of natural resour"es,the C* used the %randfather rule to deter&ine the nationalit! of petitioners. It provided

Shares elon%in% to "orporations or partnerships at least /-A of the "apital of whi"h is owned !ilipino "iti0ens shall e "onsidered as of Philippine nationalit!, ut if the per"enta%e of ilipinoownership in the "orporation or partnership is less than /-A, onl! the nu&er of shares"orrespondin% to su"h per"enta%e shall e "ounted as of Philippine nationalit!. )hus, if +--,---shares are re%istered in the na&e of a "orporation or partnership at least /-A of the "apital sto"# or"apital, respe"tivel!, of whi"h elon% to ilipino "iti0ens, all of the shares shall e re"orded as owned! ilipinos. But if less than /-A, or sa!, 5-A of the "apital sto"# or "apital of the "orporation orpartnership, respe"tivel!, elon%s to ilipino "iti0ens, onl! 5-,--- shares shall e re"orded aselon%in% to aliens.4'e&phasis supplied(

In deter&inin% the nationalit! of petitioners, the C* loo#ed into their "orporate stru"tures and their"orrespondin% "o&&on shareholders. ?sin% the %randfather rule, the C* dis"overed that $B$I in

effe"t owned &a9orit! of the "o&&on sto"#s of the petitioners as well as at least /-A e2uit! interestof other &a9orit! shareholders of petitioners throu%h 9oint venture a%ree&ents. )he C* found thatthrou%h a we of "orporate la!erin%, it is "lear that one "o&&on "ontrollin% investor in all &inin%"orporations involved 1 1 1 is $B$I.5 )hus, it "on"luded that petitioners $"*rthur, )esoro and Narraare also in partnership with, or privies3in3interest of, $B$I.

urther&ore, the C* viewed the "onversion of the $PS* appli"ations of petitioners into )**appli"ations suspi"ious in nature and, as a "onse2uen"e, it re"o&&ended the re9e"tion ofpetitioners@ $PS* appli"ations ! the Se"retar! of the DENR.











Gith re%ard to the settle&ent of disputes over ri%hts to &inin% areas, the C* pointed out that thePO* has 9urisdi"tion over the& and that it also has the power to deter&ine the of nationalit! ofpetitioners as a prere2uisite of the Constitution prior the "onferrin% of ri%hts to "o3produ"tion, 9ointventure or produ"tion3sharin% a%ree&ents of the state to &inin% ri%hts. However, it also stated thatthe PO*@s 9urisdi"tion is li&ited onl! to the resolution of the dispute and not on the approval orre9e"tion of the $PS*s. It stipulated that onl! the Se"retar! of the DENR is vested with the power to

approve or re9e"t appli"ations for $PS*.

inall!, the C* upheld the findin%s of the PO* in its De"e&er +4, --7 Resolution whi"h "onsideredpetitioners $"*rthur, )esoro and Narra as forei%n "orporations. Nevertheless, the C* deter&inedthat the PO*@s de"laration that the $PS*s of $"*rthur, )esoro and Narra are void is hi%hl!i&proper.

Ghile the petition was pendin% with the C*, Red&ont filed with the Offi"e of the President 'OP( apetition dated $a! 7, -+- see#in% the "an"ellation of petitioners@ )**s. )he OP rendered aDe"ision/ on *pril /, -++, wherein it "an"eled and revo#ed petitioners@ )**s for violatin% and"ir"u&ventin% the Constitution 1 1 1,F the S&all S"ale $inin% :aw and Environ&ental Co&plian"eCertifi"ate as well as Se"tions 6 and 8 of the orei%n Invest&ent *"t and E.O. 584.7 )he OP, in

affir&in% the "an"ellation of the issued )**s, a%reed with Red&ont statin% that petitioners"o&&itted violations a%ainst the aove&entioned laws and failed to su&it eviden"e to ne%atethe&. )he De"ision further 2uoted the De"e&er +4, --7 Order of the PO* fo"usin% on the alle%ed&isrepresentation and "lai&s &ade ! petitioners of ein% do&esti" or ilipino "orporations and thead&itted "ontinued &inin% operation of P$DC usin% their lo"all! se"ured S&all S"ale $inin% Per&itinside the area earlier applied for an $PS* appli"ation whi"h was eventuall! transferred to Narra. Italso a%reed with the PO*@s esti&ation that the filin% of the )** appli"ations ! petitioners is a "lear ad&ission that the! are not "apale of "ondu"tin% a lar%e s"ale &inin% operation and that the! needthe finan"ial and te"hni"al assistan"e of a forei%n entit! in their operation, that is wh! the! sou%htthe parti"ipation of $B$I Resour"es, In".8 )he De"ision further 2uoted

)he filin% of the )** appli"ation on <une +5, --7, durin% the penden"! of the "ase onl!de&onstrate the violations and la"# of 2ualifi"ation of the respondent "orporations to en%a%e in

&inin%. )he filin% of the )** appli"ation "onversion whi"h is allowed forei%n "orporation of theearlier $PS* is an ad&ission that indeed the respondent is not ilipino ut rather of forei%nnationalit! who is dis2ualified under the laws. Corporate do"u&ents of $B$I Resour"es, In".furnished its sto"#holders in their head offi"e in Canada su%%est that the! are "ondu"tin% operationonl! throu%h their lo"al "ounterparts.=

)he $otion for Re"onsideration of the De"ision was further denied ! the OP in a Resolution6- dated<ul! /, -++. Petitioners then filed a Petition for Review on Certiorari of the OP@s De"ision andResolution with the C*, do"#eted as C*3.R. SP No. +-4-=. In the C* De"ision dated eruar!=, -+, the C* affir&ed the De"ision and Resolution of the OP. )hereafter, petitioners appealedthe sa&e C* de"ision to this Court whi"h is now pendin% with a different division.

)hus, the instant petition for review a%ainst the O"toer +, -+- De"ision of the C*. Petitioners putforth the followin% errors of the C*

I.

)he Court of *ppeals erred when it did not dis&iss the "ase for &ootness despite the fa"tthat the su9e"t &atter of the "ontrovers!, the $PS* *ppli"ations, have alread! een"onverted into )** appli"ations and that the sa&e have alread! een %ranted.














II.

)he Court of *ppeals erred when it did not dis&iss the "ase for la"# of 9urisdi"tion"onsiderin% that the Panel of *ritrators has no 9urisdi"tion to deter&ine the nationalit! ofNarra, )esoro and $"*rthur.

III.

)he Court of *ppeals erred when it did not dis&iss the "ase on a""ount of Red&ont@s willfulforu& shoppin%.

I.

)he Court of *ppeals@ rulin% that Narra, )esoro and $"*rthur are forei%n "orporations asedon the randfather Rule is "ontrar! to law, parti"ularl! the e1press &andate of the orei%nInvest&ents *"t of +==+, as a&ended, and the I* Rules.

.

)he Court of *ppeals erred when it applied the e1"eptions to the res inter alios a"ta rule.

I.

)he Court of *ppeals erred when it "on"luded that the "onversion of the $PS* *ppli"ationsinto )** *ppli"ations were of suspi"ious nature as the sa&e is ased on &ere"on9e"tures and sur&ises without an! shred of eviden"e to show the sa&e.6+

Ge find the petition to e without &erit.

)his "ase not &oot and a"ade&i"

)he "lai& of petitioners that the C* erred in not renderin% the instant "ase as &oot is without &erit.

Basi"all!, a "ase is said to e &oot and>or a"ade&i" when it "eases to present a 9usti"iale"ontrovers! ! virtue of supervenin% events, so that a de"laration thereon would e of no pra"ti"aluse or value.6 )hus, the "ourts %enerall! de"line 9urisdi"tion over the "ase or dis&iss it on the%round of &ootness.66

)he &ootness prin"iple, however, does a""ept "ertain e1"eptions and the &ere raisin% of an issueof &ootness will not deter the "ourts fro& tr!in% a "ase when there is a valid reason to do so. InDavid v. $a"apa%al3*rro!o 'David(, the Court provided four instan"es where "ourts "an de"ide anotherwise &oot "ase, thus

+.( )here is a %rave violation of the ConstitutionJ

.( )he e1"eptional "hara"ter of the situation and para&ount puli" interest is involvedJ

6.( Ghen "onstitutional issue raised re2uires for&ulation of "ontrollin% prin"iples to %uide theen"h, the ar, and the puli"J and










4.( )he "ase is "apale of repetition !et evadin% review.64

*ll of the e1"eptions stated aove are present in the instant "ase. Ge of this Court note that a %raveviolation of the Constitution, spe"ifi"all! Se"tion of *rti"le KII, is ein% "o&&itted ! a forei%n"orporation ri%ht under our "ountr!@s nose throu%h a &!riad of "orporate la!erin% under different,alle%edl!, ilipino "orporations. )he intri"ate "orporate la!erin% utili0ed ! the Canadian "o&pan!,

$B$I, is of e1"eptional "hara"ter and involves para&ount puli" interest sin"e it undenial! affe"tsthe e1ploitation of our Countr!@s natural resour"es. )he "orrespondin% a"tions of petitioners durin%the lifeti&e and e1isten"e of the instant "ase raise 2uestions as what prin"iple is to e applied to"ases with si&ilar issues. No definite rulin% on su"h prin"iple has een pronoun"ed ! the CourtJhen"e, the disposition of the issues or errors in the instant "ase will serve as a %uide to the en"h,the ar and the puli".65 inall!, the instant "ase is "apale of repetition !et evadin% review, sin"ethe Canadian "o&pan!, $B$I, "an #eep on utili0in% du&&! ilipino "orporations throu%h variouss"he&es of "orporate la!erin% and "onversion of appli"ations to s#irt the "onstitutional prohiitiona%ainst forei%n &inin% in Philippine soil.

Conversion of $PS* appli"ations to )** appli"ations

Ge shall dis"uss the first error in "on9un"tion with the si1th error presented ! petitioners sin"e othinvolve the "onversion of $PS* appli"ations to )** appli"ations. Petitioners propound that the C*erred in rulin% a%ainst the& sin"e the 2uestioned $PS* appli"ations were alread! "onverted into)** appli"ationsJ thus, the issue on the prohiition relatin% to $PS* appli"ations of forei%n &inin%"orporations is a"ade&i". *lso, petitioners would want us to "orre"t the C*@s findin% whi"h dee&edthe afore&entioned "onversions of appli"ations as suspi"ious in nature, sin"e it is ased on &ere"on9e"tures and sur&ises and not supported with eviden"e.

Ge disa%ree.

)he C*@s anal!sis of the a"tions of petitioners after the "ase was filed a%ainst the& ! respondent ison point. )he "han%in% of appli"ations ! petitioners fro& one t!pe to another 9ust e"ause a "asewas filed a%ainst the&, in truth, would raise not a few s"epti"s@ e!erows. Ghat is the reason forsu"h "onversionL Did the said "onversion not ste& fro& the "ase "hallen%in% their "iti0enship and tohave the "ase dis&issed a%ainst the& for ein% &ootL It is 2uite ovious that it is petitioners@strate%! to have the "ase dis&issed a%ainst the& for ein% &oot.

Consider the histor! of this "ase and how petitioners responded to ever! a"tion done ! the "ourt orappropriate %overn&ent a%en"! on <anuar! , --7, Red&ont filed three separate petitions fordenial of the $PS* appli"ations of petitioners efore the PO*. On <une +5, --7, petitioners filed a"onversion of their $PS* appli"ations to )**s. )he PO*, in its De"e&er +4, --7 Resolution,oserved this suspe"t "han%e of appli"ations while the "ase was pendin% efore it and held

)he filin% of the inan"ial or )e"hni"al *ssistan"e *%ree&ent appli"ation is a "lear ad&ission thatthe respondents are not "apale of "ondu"tin% a lar%e s"ale &inin% operation and that the! need the

finan"ial and te"hni"al assistan"e of a forei%n entit! in their operation that is wh! the! sou%ht theparti"ipation of $B$I Resour"es, In". )he parti"ipation of $B$I in the "orporation onl! proves thefa"t that it is the Canadian "o&pan! that will provide the finan"es and the resour"es to operate the&inin% areas for the %reater enefit and interest of the sa&e and not the ilipino sto"#holders whoonl! have a less sustantial finan"ial sta#e in the "orporation.

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1 1 1 )he filin% of the )** appli"ation on <une +5, --7, durin% the penden"! of the "ase onl!de&onstrate the violations and la"# of 2ualifi"ation of the respondent "orporations to en%a%e in&inin%. )he filin% of the )** appli"ation "onversion whi"h is allowed forei%n "orporation of theearlier $PS* is an ad&ission that indeed the respondent is not ilipino ut rather of forei%nnationalit! who is dis2ualified under the laws. Corporate do"u&ents of $B$I Resour"es, In".furnished its sto"#holders in their head offi"e in Canada su%%est that the! are "ondu"tin% operation

onl! throu%h their lo"al "ounterparts.6/

On O"toer +, -+-, the C* rendered a De"ision whi"h partiall! %ranted the petition, reversin% andsettin% aside the Septe&er +-, --8 and <ul! +, --= Orders of the $*B. In the said De"ision, theC* upheld the findin%s of the PO* of the DENR that the herein petitioners are in fa"t forei%n"orporations thus a re"o&&endation of the re9e"tion of their $PS* appli"ations were re"o&&endedto the Se"retar! of the DENR. Gith respe"t to the )** appli"ations or "onversion of the $PS*appli"ations to )**s, the C* deferred the &atter for the deter&ination of the Se"retar! of theDENR and the President of the Repuli" of the Philippines.67

In their $otion for Re"onsideration dated O"toer /, -+-, petitioners pra!ed for the dis&issal ofthe petition assertin% that on *pril 5, -+-, then President loria $a"apa%al3*rro!o si%ned and

issued in their favor )** No. -53-+-3IB, whi"h rendered the petition &oot and a"ade&i".However, the C*, in a Resolution dated eruar! +5, -++ denied their &otion for ein% a &ererehash of their "lai&s and defenses.68 Standin% fir& on its De"ision, the C* affir&ed the rulin% thatpetitioners are, in fa"t, forei%n "orporations. On *pril 5, -++, petitioners elevated the "ase to us viaa Petition for Review on Certiorari under Rule 45, 2uestionin% the De"ision of the C*. Interestin%l!,the OP rendered a De"ision dated *pril /, -++, a da! after this petition for review was filed,"an"ellin% and revo#in% the )**s, 2uotin% the Order of the PO* and statin% that petitioners areforei%n "orporations sin"e the! needed the finan"ial stren%th of $B$I, In". in order to "ondu"t lar%es"ale &inin% operations. )he OP De"ision also ased the "an"ellation on the &isrepresentation offa"ts and the violation of the S&all S"ale $inin% :aw and Environ&ental Co&plian"e Certifi"ate aswell as Se"tions 6 and 8 of the orei%n Invest&ent *"t and E.O. 584.6= On <ul! /, -++, the OPissued a Resolution, den!in% the $otion for Re"onsideration filed ! the petitioners.

Respondent Red&ont, in its Co&&ent dated O"toer +-, -++, &ade #nown to the Court the fa"t ofthe OP@s De"ision and Resolution. In their Repl!, petitioners "hose to i%nore the OP De"ision and"ontinued to reuse their old ar%u&ents "lai&in% that the! were %ranted )**s and, thus, the "asewas &oot. Petitioners filed a $anifestation and Su&ission dated O"toer +=, -+,4- wherein the!asserted that the present petition is &oot sin"e, in a re&ar#ale turn of events, $B$I was ale tosell>assi%n all its shares>interest in the holdin% "o&panies to D$CI $inin% Corporation 'D$CI(, ailipino "orporation and, in effe"t, &a#in% their respe"tive "orporations full!3ilipino owned.

*%ain, it is 2uite evident that petitioners have een tr!in% to have this "ase dis&issed for ein%&oot. )heir final a"t, wherein $B$I was ale to alle%edl! sell>assi%n all its shares and interest inthe petitioner holdin% "o&panies to D$CI, onl! proves that the! were in fa"t not ilipino"orporations fro& the start. )he re"ent divestin% of interest ! $B$I will not "han%e the stand of this

Court with respe"t to the nationalit! of petitioners prior the suspi"ious "han%e in their "orporatestru"tures. )he new do"u&ents filed ! petitioners are fa"tual eviden"e that this Court has no power to verif!.

)he onl! thin% "lear and proved in this Court is the fa"t that the OP de"lared that petitioner"orporations have violated several &inin% laws and &ade &isrepresentations and falsehood in theirappli"ations for )** whi"h lead to the revo"ation of the said )**s, de&onstratin% that petitionersare not e!ond %oin% a%ainst or around the law usin% shift! a"tions and strate%ies. )hus, in this













instan"e, we "an sa! that their "lai& of &ootness is &oot in itself e"ause their defense of"onversion of $PS*s to )**s has een dis"redited ! the OP De"ision.

randfather test

)he &ain issue in this "ase is "entered on the issue of petitioners@ nationalit!, whether ilipino or

forei%n. In their previous petitions, the! had een ada&ant in insistin% that the! were ilipino"orporations, until the! su&itted their $anifestation and Su&ission dated O"toer +=, -+ wherethe! stated the alle%ed "han%e of "orporate ownership to refle"t their ilipino ownership. )hus, thereis a need to deter&ine the nationalit! of petitioner "orporations.

Basi"all!, there are two a"#nowled%ed tests in deter&inin% the nationalit! of a "orporation the"ontrol test and the %randfather rule. Para%raph 7 of DO< Opinion No. --, Series of --5, adoptin%the +=/7 SEC Rules whi"h i&ple&ented the re2uire&ent of the Constitution and other lawspertainin% to the "ontrollin% interests in enterprises en%a%ed in the e1ploitation of natural resour"esowned ! ilipino "iti0ens, provides

Shares elon%in% to "orporations or partnerships at least /-A of the "apital of whi"h is owned !

ilipino "iti0ens shall e "onsidered as of Philippine nationalit!, ut if the per"enta%e of ilipinoownership in the "orporation or partnership is less than /-A, onl! the nu&er of shares"orrespondin% to su"h per"enta%e shall e "ounted as of Philippine nationalit!. )hus, if +--,---shares are re%istered in the na&e of a "orporation or partnership at least /-A of the "apital sto"# or"apital, respe"tivel!, of whi"h elon% to ilipino "iti0ens, all of the shares shall e re"orded as owned! ilipinos. But if less than /-A, or sa!, 5-A of the "apital sto"# or "apital of the "orporation orpartnership, respe"tivel!, elon%s to ilipino "iti0ens, onl! 5-,--- shares shall e "ounted as owned! ilipinos and the other 5-,--- shall e re"orded as elon%in% to aliens.

)he first part of para%raph 7, DO< Opinion No. --, statin% shares elon%in% to "orporations orpartnerships at least /-A of the "apital of whi"h is owned ! ilipino "iti0ens shall e "onsidered asof Philippine nationalit!, pertains to the "ontrol test or the lieral rule. On the other hand, the se"ondpart of the DO< Opinion whi"h provides, if the per"enta%e of the ilipino ownership in the"orporation or partnership is less than /-A, onl! the nu&er of shares "orrespondin% to su"hper"enta%e shall e "ounted as Philippine nationalit!, pertains to the stri"ter, &ore strin%ent%randfather rule.

Prior to this re"ent "han%e of events, petitioners were "onstant in advo"atin% the appli"ation of the"ontrol test under R* 7-4, as a&ended ! R* 8+7=, otherwise #nown as the orei%n Invest&ents

*"t 'I*(, rather than usin% the stri"ter %randfather rule. )he pertinent provision under Se". 6 of theI* provides

SEC)ION 6. Definitions. 3 *s used in this *"t

a.( )he ter& Philippine national shall &ean a "iti0en of the PhilippinesJ or a do&esti" partnership or

asso"iation wholl! owned ! the "iti0ens of the PhilippinesJ a "orporation or%ani0ed under the lawsof the Philippines of whi"h at least si1t! per"ent '/-A( of the "apital sto"# outstandin% and entitled tovote is wholl! owned ! ilipinos or a trustee of funds for pension or other e&plo!ee retire&ent orseparation enefits, where the trustee is a Philippine national and at least si1t! per"ent '/-A( of thefund will a""rue to the enefit of Philippine nationals Provided, )hat were a "orporation and its non3ilipino sto"#holders own sto"#s in a Se"urities and E1"han%e Co&&ission 'SEC( re%isteredenterprise, at least si1t! per"ent '/-A( of the "apital sto"# outstandin% and entitled to vote of ea"h of oth "orporations &ust e owned and held ! "iti0ens of the Philippines and at least si1t! per"ent



'/-A( of the &e&ers of the Board of Dire"tors, in order that the "orporation shall e "onsidered aPhilippine national. 'e&phasis supplied(

)he %randfather rule, petitioners reasoned, has no le% to stand on in the instant "ase sin"e thedefinition of a Philippine National under Se". 6 of the I* does not provide for it. )he! further "lai&that the %randfather rule has een aandoned and is no lon%er the appli"ale rule.4+ )he! also

opined that the last portion of Se". 6 of the I* ad&its the appli"ation of a "orporate la!erin%s"he&e of "orporations. Petitioners "lai& that the "lear and una&i%uous wordin%s of the statutepre"lude the "ourt fro& "onstruin% it and prevent the "ourt@s use of dis"retion in appl!in% the law.)he! said that the plain, literal &eanin% of the statute &eant the appli"ation of the "ontrol test isoli%ator!.

Ge disa%ree. Corporate la!erin% is ad&ittedl! allowed ! the I*J ut if it is used to "ir"u&vent theConstitution and pertinent laws, then it e"o&es ille%al. urther, the pronoun"e&ent of petitionersthat the %randfather rule has alread! een aandoned &ust e dis"redited for la"# of asis.

*rt. KII, Se". of the Constitution provides

Se". . *ll lands of the puli" do&ain, waters, &inerals, "oal, petroleu& and other &ineral oils, allfor"es of potential ener%!, fisheries, forests or ti&er, wildlife, flora and fauna, and other naturalresour"es are owned ! the State. Gith the e1"eption of a%ri"ultural lands, all other naturalresour"es shall not e alienated. )he e1ploration, develop&ent, and utili0ation of natural resour"esshall e under the full "ontrol and supervision of the State. )he State &a! dire"tl! underta#e su"ha"tivities, or it &a! enter into "o3produ"tion, 9oint venture or produ"tion3sharin% a%ree&ents withilipino "iti0ens, or "orporations or asso"iations at least si1t! per "entu& of whose "apital is owned! su"h "iti0ens. Su"h a%ree&ents &a! e for a period not e1"eedin% twent!3five !ears, renewalefor not &ore than twent!3five !ears, and under su"h ter&s and "onditions as &a! e provided !law.

1 1 1 1

)he President &a! enter into a%ree&ents with orei%n3owned "orporations involvin% either te"hni"alor finan"ial assistan"e for lar%e3s"ale e1ploration, develop&ent, and utili0ation of &inerals,petroleu&, and other &ineral oils a""ordin% to the %eneral ter&s and "onditions provided ! law,ased on real "ontriutions to the e"ono&i" %rowth and %eneral welfare of the "ountr!. In su"ha%ree&ents, the State shall pro&ote the develop&ent and use of lo"al s"ientifi" and te"hni"alresour"es. 'e&phasis supplied(

)he e&phasi0ed portion of Se". whi"h fo"uses on the State enterin% into different t!pes ofa%ree&ents for the e1ploration, develop&ent, and utili0ation of natural resour"es with entities whoare dee&ed ilipino due to /- per"ent ownership of "apital is pertinent to this "ase, sin"e the issuesare "entered on the utili0ation of our "ountr!@s natural resour"es or spe"ifi"all!, &inin%. )hus, there isa need to as"ertain the nationalit! of petitioners sin"e, as the Constitution so provides, su"h

a%ree&ents are onl! allowed "orporations or asso"iations at least /- per"ent of su"h "apital isowned ! su"h "iti0ens. )he delierations in the Re"ords of the +=8/ Constitutional Co&&issionshed li%ht on how a "iti0enship of a "orporation will e deter&ined

$r. BENN*EN Did I hear ri%ht that the Chair&an@s interpretation of an independent nationale"ono&! is freedo& fro& undue forei%n "ontrolL Ghat is the &eanin% of undue forei%n "ontrolL

$R. I::E*S ?ndue forei%n "ontrol is forei%n "ontrol whi"h sa"rifi"es national soverei%nt! andthe welfare of the ilipino in the e"ono&i" sphere.





$R. BENN*EN Gh! does it have to e 2ualified still with the word undueL Gh! not si&pl!freedo& fro& forei%n "ontrolL I thin# that is the &eanin% of independen"e, e"ause as phrased, itstill allows for forei%n "ontrol.

$R. I::E*S It will now depend on the interpretation e"ause if, for e1a&ple, we retain the /->4-possiilit! in the "ultivation of natural resour"es, 4- per"ent involves so&e "ontrolJ not total "ontrol,

ut so&e "ontrol.

$R. BENN*EN In an! "ase, I thin# in due ti&e we will propose so&e a&end&ents.

$R. I::E*S es. But we will e open to i&prove&ent of the phraseolo%!.

$r. BENN*EN es.

)han# !ou, $r. i"e3President.

1 1 1 1

$R. NO::EDO In Se"tions 6, = and +5, the Co&&ittee stated lo"al or ilipino e2uit! and forei%ne2uit!J na&el!, /-34- in Se"tion 6, /-34- in Se"tion =, and >63+>6 in Se"tion +5.

$R. I::E*S )hat is ri%ht.

$R. NO::EDO In tea"hin% law, we are alwa!s fa"ed with the 2uestion MGhere do we ase thee2uit! re2uire&ent, is it on the authori0ed "apital sto"#, on the sus"ried "apital sto"#, or on thepaid3up "apital sto"# of a "orporation@L Gill the Co&&ittee please enli%hten &e on thisL

$R. I::E*S Ge have 9ust had a lon% dis"ussion with the &e&ers of the tea& fro& the ?P :awCenter who provided us with a draft. )he phrase that is "ontained here whi"h we adopted fro& the?P draft is M/- per"ent of the votin% sto"#.@

$R. NO::EDO )hat &ust e ased on the sus"ried "apital sto"#, e"ause unless de"lareddelin2uent, unpaid "apital sto"# shall e entitled to vote.

$R. I::E*S )hat is ri%ht.

$R. NO::EDO )han# !ou.

Gith respe"t to an invest&ent ! one "orporation in another "orporation, sa!, a "orporation with /-34- per"ent e2uit! invests in another "orporation whi"h is per&itted ! the Corporation Code, doesthe Co&&ittee adopt the %randfather ruleL

$R. I::E*S es, that is the understandin% of the Co&&ittee.

$R. NO::EDO )herefore, we need additional ilipino "apitalL

$R. I::E*S es.4 'e&phasis supplied(

It is apparent that it is the intention of the fra&ers of the Constitution to appl! the %randfather rule in"ases where "orporate la!erin% is present.






Ele&entar! in statutor! "onstru"tion is when there is "onfli"t etween the Constitution and a statute,the Constitution will prevail. In this instan"e, spe"ifi"all! pertainin% to the provisions under *rt. KII ofthe Constitution on National E"ono&! and Patri&on!, Se". 6 of the I* will have no pla"e ofappli"ation. *s de"reed ! the honorale fra&ers of our Constitution, the %randfather rule prevailsand &ust e applied.

:i#ewise, para%raph 7, DO< Opinion No. --, Series of --5 provides

)he aove32uoted SEC Rules provide for the &anner of "al"ulatin% the ilipino interest in a"orporation for purposes, a&on% others, of deter&inin% "o&plian"e with nationalit! re2uire&ents'the MInvestee Corporation@(. Su"h &anner of "o&putation is ne"essar! sin"e the shares in theInvestee Corporation &a! e owned oth ! individual sto"#holders 'MInvestin% Individuals@( and !"orporations and partnerships 'MInvestin% Corporation@(. )he said rules thus provide for thedeter&ination of nationalit! dependin% on the ownership of the Investee Corporation and, in "ertaininstan"es, the Investin% Corporation.

?nder the aove32uoted SEC Rules, there are two "ases in deter&inin% the nationalit! of theInvestee Corporation. )he first "ase is the Mlieral rule@, later "oined ! the SEC as the Control )est in

its 6- $a! +==- Opinion, and pertains to the portion in said Para%raph 7 of the +=/7 SEC Ruleswhi"h states, M's(hares elon%in% to "orporations or partnerships at least /-A of the "apital of whi"his owned ! ilipino "iti0ens shall e "onsidered as of Philippine nationalit!.@ ?nder the lieralControl )est, there is no need to further tra"e the ownership of the /-A 'or &ore( ilipinosto"#holdin%s of the Investin% Corporation sin"e a "orporation whi"h is at least /-A ilipino3ownedis "onsidered as ilipino.

)he se"ond "ase is the Stri"t Rule or the randfather Rule Proper and pertains to the portion in saidPara%raph 7 of the +=/7 SEC Rules whi"h states, ut if the per"enta%e of ilipino ownership in the"orporation or partnership is less than /-A, onl! the nu&er of shares "orrespondin% to su"hper"enta%e shall e "ounted as of Philippine nationalit!. ?nder the Stri"t Rule or randfather RuleProper, the "o&ined totals in the Investin% Corporation and the Investee Corporation &ust etra"ed 'i.e., %randfathered( to deter&ine the total per"enta%e of ilipino ownership.

$oreover, the ulti&ate ilipino ownership of the shares &ust first e tra"ed to the level of theInvestin% Corporation and added to the shares dire"tl! owned in the Investee Corporation 1 1 1.

1 1 1 1

In other words, ased on the said SEC Rule and DO< Opinion, the randfather Rule or the se"ondpart of the SEC Rule applies onl! when the /-34- ilipino3forei%n e2uit! ownership is in dout 'i.e.,in "ases where the 9oint venture "orporation with ilipino and forei%n sto"#holders with less than/-A ilipino sto"#holdin%s or 5=AF invests in other 9oint venture "orporation whi"h is either /-34-Ailipino3alien or the 5=A less ilipino(. Stated differentl!, where the /-34- ilipino3 forei%n e2uit!ownership is not in dout, the randfather Rule will not appl!. 'e&phasis supplied(

*fter a s"rutin! of the eviden"e e1tant on re"ord, the Court finds that this "ase "alls for theappli"ation of the %randfather rule sin"e, as ruled ! the PO* and affir&ed ! the OP, dout prevailsand persists in the "orporate ownership of petitioners. *lso, as found ! the C*, dout is present inthe /-34- ilipino e2uit! ownership of petitioners Narra, $"*rthur and )esoro, sin"e their "o&&oninvestor, the +--A Canadian "orporation$B$I, funded the&. However, petitioners also "lai& thatthere is dout onl! when the sto"#holdin%s of ilipinos are less than /-A.46





)he assertion of petitioners that dout onl! e1ists when the sto"#holdin%s are less than /-A failsto "onvin"e this Court. DO< Opinion No. -, whi"h petitioners 2uoted in their petition, onl! &ade ane1a&ple of an instan"e where dout as to the ownership of the "orporation e1ists. It would eludi"rous to li&it the appli"ation of the said word onl! to the instan"es where the sto"#holdin%s ofnon3ilipino sto"#holders are &ore than 4-A of the total sto"#holdin%s in a "orporation. )he"orporations interested in "ir"u&ventin% our laws would "learl! strive to have /-A ilipino

Ownership at fa"e value. It would e senseless for these appl!in% "orporations to state in theirrespe"tive arti"les of in"orporation that the! have less than /-A ilipino sto"#holders sin"e theappli"ations will e denied instantl!. )hus, various "orporate s"he&es and la!erin%s are utili0ed to"ir"u&vent the appli"ation of the Constitution.

Oviousl!, the instant "ase presents a situation whi"h e1hiits a s"he&e e&plo!ed ! sto"#holdersto "ir"u&vent the law, "reatin% a "loud of dout in the Court@s &ind. )o deter&ine, therefore, thea"tual parti"ipation, dire"t or indire"t, of $B$I, the %randfather rule &ust e used.

$"*rthur $inin%, In".

)o estalish the a"tual ownership, interest or parti"ipation of $B$I in ea"h of petitioners@ "orporate

stru"ture, the! have to e %randfathered.

*s previousl! dis"ussed, $"*rthur a"2uired its $PS* appli"ation fro& $$C, whi"h a"2uired itsappli"ation fro& S$$I. $"*rthur has a "apital sto"# of ten &illion pesos 'PhP +-,---,---( dividedinto +-,--- "o&&on shares at one thousand pesos 'PhP +,---( per share, sus"ried to ! thefollowin%44

N&' N(io!li() N*&+'r o S-r'

A&o*!(S*+/ri+'"

A&o*!( Pi"

$adride9os $inin%Corporation

ilipino 5,==7 PhP 5,==7,---.-- PhP 85,---.--

MMI R'o*r/',I!/.

Canadian 6,==8 PhP 6,==8,---.- PhP +,878,+74./-

:auro :. Sala0ar ilipino + PhP +,---.-- PhP +,---.--

ernando B.Es%uerra

ilipino + PhP +,---.-- PhP +,---.--

$anuel *. *%"aoili ilipino + PhP +,---.-- PhP +,---.--

$i"hael ). $ason *&eri"an + PhP +,---.-- PhP +,---.--

enneth Caw#ell Canadian + PhP +,---.-- PhP +,---.--

)otal +-,--- PhP +-,---,---.-- PhP ,7-8,+74./-

'e&phasis supplied(

Interestin%l!, loo#in% at the "orporate stru"ture of $$C, we ta#e note that it has a si&ilar stru"tureand "o&position as $"*rthur. In fa"t, it would see& that $B$I is also a &a9or investor and"ontrols45 $B$I and also, si&ilar no&inal shareholders were present, i.e. ernando B. Es%uerra'Es%uerra(, :auro :. Sala0ar 'Sala0ar(, $i"hael ). $ason '$ason( and enneth Caw#ell 'Caw#ell(

$adride9os $inin% Corporation







N&' N(io!li() N*&+'r o S-r'

A&o*!(S*+/ri+'"

A&o*!( Pi"

Ol)&pi/ Mi!'

D''lop&'!(

Corp.

ilipino /,//6 PhP /,//6,---.--

P-P 0

MMIR'o*r/',

I!/.

Canadian 6,66+ PhP 6,66+,---.-- PhP ,8-6,=--.--

*&anti :i&son ilipino + PhP +,---.-- PhP +,---.--

3'r!!"o .

E*'rr

ilipino + PhP +,---.-- PhP +,---.--

L*ro Slr ilipino + PhP +,---.-- PhP +,---.--

E&&anuel .

Hernando

ilipino + PhP +,---.-- PhP +,---.--

Mi/-'l T.

Mo!

*&eri"an + PhP +,---.-- PhP +,---.--

K'!!'(-C67'll

Canadian + PhP +,---.-- PhP +,---.--

)otal +-,--- PhP +-,---,---.-- PhP ,8-=,=--.--

'e&phasis supplied(

Noti"eal!, Ol!&pi" $ines ; Develop&ent Corporation 'Ol!&pi"( did not pa! an! a&ount withrespe"t to the nu&er of shares the! sus"ried to in the "orporation, whi"h is 2uite asurd sin"eOl!&pi" is the &a9or sto"#holder in $$C. $B$I@s --/ *nnual Report sheds li%ht on wh! Ol!&pi"

failed to pa! an! a&ount with respe"t to the nu&er of shares it sus"ried to. It states that Ol!&pi"entered into 9oint venture a%ree&ents with several Philippine "o&panies, wherein it holds dire"tl!and indire"tl! a /-A effe"tive e2uit! interest in the Ol!&pi" Properties.4/ uotin% the said *nnualreport

On Septe&er =, --4, the Co&pan! and Ol!&pi" $ines ; Develop&ent Corporation 'Ol!&pi"(entered into a series of a%ree&ents in"ludin% a Propert! Pur"hase and Develop&ent *%ree&ent'the )ransa"tion Do"u&ents( with respe"t to three ni"#el laterite properties in Palawan, Philippines'the Ol!&pi" Properties(. )he )ransa"tion Do"u&ents effe"tivel! estalish a 9oint venture etween






the Co&pan! and Ol!&pi" for purposes of developin% the Ol!&pi" Properties. )he Co&pan! holdsdire"tl! and indire"tl! an initial /-A interest in the 9oint venture. ?nder "ertain "ir"u&stan"es andupon a"hievin% "ertain &ilestones, the Co&pan! &a! earn up to a +--A interest, su9e"t to a .5Anet revenue ro!alt!.47 'e&phasis supplied(

)hus, as de&onstrated in this first "orporation, $"*rthur, when it is %randfathered, "o&pan!

la!erin% was utili0ed ! $B$I to %ain "ontrol over $"*rthur. It is apparent that $B$I has &ore than/-A or &ore e2uit! interest in $"*rthur, &a#in% the latter a forei%n "orporation.

)esoro $inin% and Develop&ent, In".

)esoro, whi"h a"2uired its $PS* appli"ation fro& S$$I, has a "apital sto"# of ten &illion pesos'PhP +-,---,---( divided into ten thousand '+-,---( "o&&on shares at PhP +,--- per share, asde&onstrated elow

referen"e http>>s".9udi"iar!.%ov.ph>pdf>we>viewer.ht&lLfile>9urispruden"e>-+4>april-+4>+=558-.pdf FF

N&' N(io!li() N*&+'r o

S-r'

A&o*!(

S*+/ri+'"

A&o*!( Pi"

Sara $arie

$inin%, In".

ilipino 5,==7 PhP 5,==7,---.-- PhP 85,---.--

MMI

R'o*r/', I!/.

Canadian 6,==8 PhP 6,==8,---.-- PhP +,878,+74./-


ernando B.

Es%uerra

ilipino + PhP +,---.-- PhP +,---.--

$anuel *.

*%"aoili

ilipino + PhP +,---.-- PhP +,---.--



)otal +-,--- PhP PhP ,7-8,+74./-



http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2014/april2014/195580.pdf







+-,---,---.--

'e&phasis supplied(

E1"ept for the na&e Sara $arie $inin%, In"., the tale aove shows e1a"tl! the sa&e fi%ures as

the "orporate stru"ture of petitioner $"*rthur, down to the last "entavo. *ll the other shareholdersare the sa&e $B$I, Sala0ar, Es%uerra, *%"aoili, $ason and Caw#ell. )he fi%ures underNationalit!, Nu&er of Shares, *&ount Sus"ried, and *&ount Paid are e1a"tl! the sa&e.Delvin% deeper, we s"rutini0e S$$I@s "orporate stru"ture

Sara $arie $inin%, In".



S-r'

A&o*!(

S*+/ri+'"

A&o*!( Pi"

Ol)&pi/ Mi!'

D''lop&'!(

Corp.

ilipino /,//6 PhP /,//6,---.-- PhP -

MMI R'o*r/',

I!/.

Canadian 6,66+ PhP 6,66+,---.-- PhP ,7=4,---.--

*&anti :i&son ilipino + PhP +,---.-- PhP +,---.--

ernando B.

Es%uerra

ilipino + PhP +,---.-- PhP +,---.--

:auro Sala0ar ilipino + PhP +,---.-- PhP +,---.--

E&&anuel .

Hernando

ilipino + PhP +,---.-- PhP +,---.--









)otal +-,--- PhP+-,---,---.--

PhP ,8-=,=--.--

'e&phasis supplied(

*fter suse2uentl! stud!in% S$$I@s "orporate stru"ture, it is not farfet"hed for us to spot the %larin%si&ilarit! etween S$$I and $$C@s "orporate stru"ture. *%ain, the presen"e of identi"alsto"#holders, na&el! Ol!&pi", $B$I, *&anti :i&son ':i&son(, Es%uerra, Sala0ar, Hernando,$ason and Caw#ell. )he fi%ures under the headin%s Nationalit!, Nu&er of Shares, *&ountSus"ried, and *&ount Paid are e1a"tl! the sa&e e1"ept for the a&ount paid ! $B$I whi"hnow refle"ts the a&ount of two &illion seven hundred ninet! four thousand pesos 'PhP ,7=4,---(.Oddl!, the total value of the a&ount paid is two &illion ei%ht hundred nine thousand nine hundredpesos 'PhP ,8-=,=--(.

*""ordin%l!, after %randfatherin% petitioner )esoro and fa"torin% in Ol!&pi"@s parti"ipation inS$$I@s "orporate stru"ture, it is "lear that $B$I is in "ontrol of )esoro and owns /-A or &ore e2uit!interest in )esoro. )his &a#es petitioner )esoro a non3ilipino "orporation and, thus, dis2ualifies it to

parti"ipate in the e1ploitation, utili0ation and develop&ent of our natural resour"es.

Narra Ni"#el $inin% and Develop&ent Corporation

$ovin% on to the last petitioner, Narra, whi"h is the transferee and assi%nee of P:$DC@s $PS*appli"ation, whose "orporate stru"ture@s arran%e&ent is si&ilar to that of the first two petitionersdis"ussed. )he "apital sto"# of Narra is ten &illion pesos 'PhP +-,---,---(, whi"h is divided into tenthousand "o&&on shares '+-,---( at one thousand pesos 'PhP +,---( per share, shown as follows



S-r'

A&o*!(

S*+/ri+'"

A&o*!( Pi"

Patri"ia :ouise

$inin% ;

Develop&ent

Corp.

ilipino 5,==7 PhP 5,==7,---.-- PhP +,/77,---.--

MMI

R'o*r/', I!/.

Canadian 6,==8 PhP 6,==/,---.-- PhP +,++/,---.--







Hi%inio C.

$endo0a, <r.

ilipino + PhP +,---.-- PhP +,---.--

Henr! E.

ernande0

ilipino + PhP +,---.-- PhP +,---.--

$anuel *.

*%"aoili

ilipino + PhP +,---.-- PhP +,---.--

$a. Elena *.

Bo"alan

ilipino + PhP +,---.-- PhP +,---.--

Ba!ani H. *%ain ilipino + PhP +,---.-- PhP +,---.--

Roert :.

$"Curd!

*&eri"an + PhP +,---.-- PhP +,---.--


)otal +-,--- PhP

+-,---,---.--

PhP ,8--,---.--

'e&phasis supplied(

*%ain, $B$I, alon% with other no&inal sto"#holders, i.e., $ason, *%"aoili and Es%uerra, is presentin this "orporate stru"ture.

Patri"ia :ouise $inin% ; Develop&ent Corporation

?sin% the %randfather &ethod, we further loo# and e1a&ine P:$DC@s "orporate stru"ture


S-r'

A&o*!(S*+/ri+'"

A&o*!( Pi"

Palawan *lpha SouthResour"es Develop&entCorporation

ilipino /,5=/ PhP/,5=/,---.--

PhP -

MMI R'o*r/', Canadian 6,6=/ PhP6,6=/,---.--

PhP,7=/,---.--



I!/.

Hi%inio C. $endo0a, <r. ilipino + PhP +,---.-- PhP +,---.--

ernando B. Es%uerra ilipino + PhP +,---.-- PhP +,---.--Henr! E. ernande0 ilipino + PhP +,---.-- PhP +,---.--


$anuel *. *%"aoili ilipino + PhP +,---.-- PhP +,---.--

Ba!ani H. *%ain ilipino + PhP +,---.-- PhP +,---.--



)otal +-,--- PhP+-,---,---.--

PhP,7-8,+74./-

'e&phasissupplied(

et a%ain, the usual pla!ers in petitioners@ "orporate stru"tures are present. Si&ilarl!, the a&ount of&one! paid ! the nd tier &a9orit! sto"# holder, in this "ase, Palawan *lpha South Resour"es andDevelop&ent Corp. 'P*SRDC(, is 0ero.

Stud!in% $B$I@s Su&&ar! of Si%nifi"ant *""ountin% Poli"ies dated O"toer 6+, --5 e1plains thereason ehind the intri"ate "orporate la!erin% that $B$I i&&ersed itself in

<OIN) EN)?RES )he Co&pan!@s ownership interests in various &inin% ventures en%a%ed in the

a"2uisition, e1ploration and develop&ent of &ineral properties in the Philippines is des"ried asfollows

'a( Ol!&pi" roup

)he Philippine "o&panies holdin% the Ol!&pi" Propert!, and the ownership and interests therein,are as follows

Ol!&pi"3 Philippines 'the Ol!&pi" roup(

Sara $arie $inin% Properties :td. 'Sara $arie( 66.6A

)esoro $inin% ; Develop&ent, In". ')esoro( /-.-A

Pursuant to the Ol!&pi" 9oint venture a%ree&ent the Co&pan! holds dire"tl! and indire"tl! aneffe"tive e2uit! interest in the Ol!&pi" Propert! of /-.-A. Pursuant to a shareholders@ a%ree&ent,the Co&pan! e1er"ises 9oint "ontrol over the "o&panies in the Ol!&pi" roup.

'( *lpha roup



)he Philippine "o&panies holdin% the *lpha Propert!, and the ownership interests therein, are asfollows

*lpha3 Philippines 'the *lpha roup(

Patri"ia :ouise $inin% Develop&ent In". 'Patri"ia( 64.-A

Narra Ni"#el $inin% ; Develop&ent Corporation 'Narra( /-.4A

?nder a 9oint venture a%ree&ent the Co&pan! holds dire"tl! and indire"tl! an effe"tive e2uit!interest in the *lpha Propert! of /-.4A. Pursuant to a shareholders@ a%ree&ent, the Co&pan!e1er"ises 9oint "ontrol over the "o&panies in the *lpha roup.48 'e&phasis supplied(

Con"ludin% fro& the aove3stated fa"ts, it is 2uite safe to sa! that petitioners $"*rthur, )esoro andNarra are not ilipino sin"e $B$I, a +--A Canadian "orporation, owns /-A or &ore of their e2uit!interests. Su"h "on"lusion is derived fro& %randfatherin% petitioners@ "orporate owners, na&el!$$I, S$$I and P:$DC. oin% further and addin% to the pi"ture, $B$I@s Su&&ar! of Si%nifi"ant

*""ountin% Poli"ies state&ent re%ardin% the 9oint venture a%ree&ents that it entered into with

the Ol!&pi" and *lpha %roupsinvolves S$$I, )esoro, P:$DC and Narra. Noti"eal!, theownership of the la!ered "orporations oils down to $B$I, Ol!&pi" or "orporations under the*lpha %roup wherein $B$I has 9oint venture a%ree&ents with, pra"ti"all! e1er"isin% &a9orit!"ontrol over the "orporations &entioned. In effe"t, whether loo#in% at the "apital stru"ture or theunderl!in% relationships etween and a&on% the "orporations, petitioners are NO) ilipino nationalsand &ust e "onsidered forei%n sin"e /-A or &ore of their "apital sto"#s or e2uit! interests areowned ! $B$I.

*ppli"ation of the res inter alios a"ta rule

Petitioners 2uestion the C*@s use of the e1"eption of the res inter alios a"ta or the ad&ission ! "o3partner or a%ent rule and ad&ission ! privies under the Rules of Court in the instant "ase, !

pointin% out that state&ents &ade ! $B$I should not e ad&itted in this "ase sin"e it is not a part!to the "ase and that it is not a partner of petitioners.

Se"s. = and 6+, Rule +6- of the Revised Rules of Court provide

Se". =. *d&ission ! "o3partner or a%ent.3 )he a"t or de"laration of a partner or a%ent of the part!within the s"ope of his authorit! and durin% the e1isten"e of the partnership or a%en"!, &a! e %ivenin eviden"e a%ainst su"h part! after the partnership or a%en"! is shown ! eviden"e other than su"ha"t or de"laration itself. )he sa&e rule applies to the a"t or de"laration of a 9oint owner, 9oint detor,or other person 9ointl! interested with the part!.

Se". 6+. *d&ission ! privies.3 Ghere one derives title to propert! fro& another, the a"t, de"laration,

or o&ission of the latter, while holdin% the title, in relation to the propert!, is eviden"e a%ainst thefor&er.

Petitioners "lai& that efore the aove3&entioned Rule "an e applied to a "ase, the partnershiprelation &ust e shown, and that proof of the fa"t &ust e &ade ! eviden"e other than thead&ission itself.4= )hus, petitioners assert that the C* erred in findin% that a partnership relationshipe1ists etween the& and $B$I e"ause, in fa"t, no su"h partnership e1ists.

Partnerships vs. 9oint venture a%ree&ents







Petitioners "lai& that the C* erred in appl!in% Se". =, Rule +6- of the Rules ! statin% that !enterin% into a 9oint venture, $B$I have a 9oint interest with Narra, )esoro and $"*rthur. )he!"hallen%ed the "on"lusion of the C* whi"h pertains to the "lose "hara"teristi"s of

partnerships and 9oint venture a%ree&ents. urther, the! asserted that efore this parti"ularpartnership "an e for&ed, it should have een for&all! redu"ed into writin% sin"e the "apital

involved is &ore than three thousand pesos 'PhP 6,---(. Bein% that there is no eviden"e of writtena%ree&ent to for& a partnership etween petitioners and $B$I, no partnership was "reated.

Ge disa%ree.

* partnership is defined as two or &ore persons who ind the&selves to "ontriute &one!, propert!,or industr! to a "o&&on fund with the intention of dividin% the profits a&on% the&selves.5- On theother hand, 9oint ventures have een dee&ed to e a#in to partnerships sin"e it is diffi"ult todistin%uish etween 9oint ventures and partnerships. )hus

)Fhe relations of the parties to a 9oint venture and the nature of their asso"iation are so si&ilar and"losel! a#in to a partnership that it is ordinaril! held that their ri%hts, duties, and liailities are to e

tested ! rules whi"h are "losel! analo%ous to and sustantiall! the sa&e, if not e1a"tl! the sa&e,as those whi"h %overn partnership. In fa"t, it has een said that the trend in the law has een to lurthe distin"tions etween a partnership and a 9oint venture, ver! little law ein% found appli"ale toone that does not appl! to the other .5+

)hou%h so&e "lai& that partnerships and 9oint ventures are totall! different ani&als, there are ver!few rules that differentiate one fro& the otherJ thus, 9oint ventures are dee&ed a#in or si&ilar to apartnership. In fa"t, in 9oint venture a%ree&ents, rules and le%al in"idents %overnin% partnerships areapplied.5

*""ordin%l!, "ulled fro& the in"idents and re"ords of this "ase, it "an e assu&ed that therelationships entered etween and a&on% petitioners and $B$I are no si&ple 9oint venture

a%ree&ents. *s a rule, "orporations are prohiited fro& enterin% into partnership a%ree&entsJ"onse2uentl!, "orporations enter into 9oint venture a%ree&ents with other "orporations orpartnerships for "ertain transa"tions in order to for& pseudo partnerships.

Oviousl!, as the intri"ate we of ventures entered into ! and a&on% petitioners and $B$I wase1e"uted to "ir"u&vent the le%al prohiition a%ainst "orporations enterin% into partnerships, then therelationship "reated should e dee&ed as partnerships, and the laws on partnership should eapplied. )hus, a 9oint venture a%ree&ent etween and a&on% "orporations &a! e seen as si&ilarto partnerships sin"e the ele&ents of partnership are present.

Considerin% that the relationships found etween petitioners and $B$I are "onsidered to epartnerships, then the C* is 9ustified in appl!in% Se". =, Rule +6- of the Rules ! statin% that !enterin% into a 9oint venture, $B$I have a 9oint interest with Narra, )esoro and $"*rthur.

Panel of *ritrators@ 9urisdi"tion

Ge affir& the rulin% of the C* in de"larin% that the PO* has 9urisdi"tion over the instant "ase. )hePO* has 9urisdi"tion to settle disputes over ri%hts to &inin% areas whi"h definitel! involve thepetitions filed ! Red&ont a%ainst petitioners Narra, $"*rthur and )esoro. Red&ont, ! filin% itspetition a%ainst petitioners, is assertin% the ri%ht of ilipinos over &inin% areas in the Philippines










a%ainst alle%ed forei%n3owned &inin% "orporations. Su"h "lai& "onstitutes a dispute found in Se".77 of R* 7=4

Githin thirt! '6-( da!s, after the su&ission of the "ase ! the parties for the de"ision, the panelshall have e1"lusive and ori%inal 9urisdi"tion to hear and de"ide the followin%

'a( Disputes involvin% ri%hts to &inin% areas

'( Disputes involvin% &ineral a%ree&ents or per&its

Ge held in Celestial Ni"#el $inin% E1ploration Corporation v. $a"roasia Corp.56

)he phrase disputes involvin% ri%hts to &inin% areas refers to an! adverse "lai&, protest, oropposition to an appli"ation for &ineral a%ree&ent. )he PO* therefore has the 9urisdi"tion to resolvean! adverse "lai&, protest, or opposition to a pendin% appli"ation for a &ineral a%ree&ent filed withthe "on"erned Re%ional Offi"e of the $B. )his is "lear fro& Se"s. 68 and 4+ of the DENR *O =/34-, whi"h provide

Se". 68.

1 1 1 1

Githin thirt! '6-( "alendar da!s fro& the last date of puli"ation>postin%>radio announ"e&ents, theauthori0ed offi"er's( of the "on"erned offi"e's( shall issue a "ertifi"ation's( that thepuli"ation>postin%>radio announ"e&ent have een "o&plied with. *n! adverse "lai&, protest,opposition shall e filed dire"tl!, within thirt! '6-( "alendar da!s fro& the last date ofpuli"ation>postin%>radio announ"e&ent, with the "on"erned Re%ional Offi"e or throu%h an!"on"erned PENRO or CENRO for filin% in the "on"erned Re%ional Offi"e for purposes of itsresolution ! the Panel of *ritrators pursuant to the provisions of this *"t and these i&ple&entin%rules and re%ulations. ?pon final resolution of an! adverse "lai&, protest or opposition, the Panel of

*ritrators shall li#ewise issue a "ertifi"ation to that effe"t within five '5( wor#in% da!s fro& the dateof finalit! of resolution thereof. Ghere there is no adverse "lai&, protest or opposition, the Panel of

*ritrators shall li#ewise issue a Certifi"ation to that effe"t within five wor#in% da!s therefro&.

1 1 1 1

No $ineral *%ree&ent shall e approved unless the re2uire&ents under this Se"tion are full!"o&plied with and an! adverse "lai&>protest>opposition is finall! resolved ! the Panel of *ritrators.

Se". 4+.

1 1 1 1

Githin fifteen '+5( wor#in% da!s for& the re"eipt of the Certifi"ation issued ! the Panel of *ritratorsas provided in Se"tion 68 hereof, the "on"erned Re%ional Dire"tor shall initiall! evaluate the $ineral

*%ree&ent appli"ations in areas outside $ineral reservations. He>She shall thereafter endorsehis>her findin%s to the Bureau for further evaluation ! the Dire"tor within fifteen '+5( wor#in% da!sfro& re"eipt of forwarded do"u&ents. )hereafter, the Dire"tor shall endorse the sa&e to these"retar! for "onsideration>approval within fifteen wor#in% da!s fro& re"eipt of su"h endorse&ent.





In "ase of $ineral *%ree&ent appli"ations in areas with $ineral Reservations, within fifteen '+5(wor#in% da!s fro& re"eipt of the Certifi"ation issued ! the Panel of *ritrators as provided for inSe"tion 68 hereof, the sa&e shall e evaluated and endorsed ! the Dire"tor to the Se"retar! for"onsideration>approval within fifteen da!s fro& re"eipt of su"h endorse&ent. 'e&phasis supplied(

It has een &ade "lear fro& the afore"ited provisions that the disputes involvin% ri%hts to &inin%

areas under Se". 77'a( spe"ifi"all! refer onl! to those disputes relative to the appli"ations for a&ineral a%ree&ent or "onfer&ent of &inin% ri%hts.

)he 9urisdi"tion of the PO* over adverse "lai&s, protest, or oppositions to a &inin% ri%ht appli"ationis further elu"idated ! Se"s. += and 46 of DENR *O =53=6/, whi"h read

Se". +=. ilin% of *dverse Clai&s>Confli"ts>Oppositions.3 Notwithstandin% the provisions ofSe"tions 8, 46 and 57 aove, an! adverse "lai&, protest or opposition spe"ified in said se"tions&a! also e filed dire"tl! with the Panel of *ritrators within the "on"erned periods for filin% su"h"lai&, protest or opposition as spe"ified in said Se"tions.

Se". 46. Puli"ation>Postin% of $ineral *%ree&ent.3

1 1 1 1

)he Re%ional Dire"tor or "on"erned Re%ional Dire"tor shall also "ause the postin% of the appli"ationon the ulletin oards of the Bureau, "on"erned Re%ional offi"e's( and in the "on"erned provin"e's(and &uni"ipalit!'ies(, "op! furnished the aran%a!s where the proposed "ontra"t area is lo"atedon"e a wee# for two '( "onse"utive wee#s in a lan%ua%e %enerall! understood in the lo"alit!. *fterfort!3five '45( da!s fro& the last date of puli"ation>postin% has een &ade and no adverse "lai&,protest or opposition was filed within the said fort!3five '45( da!s, the "on"erned offi"es shall issue a"ertifi"ation that puli"ation>postin% has een &ade and that no adverse "lai&, protest or oppositionof whatever nature has een filed. On the other hand, if there e an! adverse "lai&, protest oropposition, the sa&e shall e filed within fort!3five '45( da!s fro& the last date of puli"ation>postin%,

with the Re%ional Offi"es "on"erned, or throu%h the Depart&ent@s Co&&unit! Environ&ent andNatural Resour"es Offi"ers 'CENRO( or Provin"ial Environ&ent and Natural Resour"es Offi"ers'PENRO(, to e filed at the Re%ional Offi"e for resolution of the Panel of *ritrators. Howeverpreviousl! pulished valid and susistin% &inin% "lai&s are e1e&pted fro& posted>postin% re2uiredunder this Se"tion.

No &ineral a%ree&ent shall e approved unless the re2uire&ents under this se"tion are full!"o&plied with and an! opposition>adverse "lai& is dealt with in writin% ! the Dire"tor and resolved! the Panel of *ritrators. 'E&phasis supplied.(

It has een &ade "lear fro& the afore"ited provisions that the disputes involvin% ri%hts to &inin%areas under Se". 77'a( spe"ifi"all! refer onl! to those disputes relative to the appli"ations for a&ineral a%ree&ent or "onfer&ent of &inin% ri%hts.

)he 9urisdi"tion of the PO* over adverse "lai&s, protest, or oppositions to a &inin% ri%ht appli"ationis further elu"idated ! Se"s. += and 46 of DENRO *O =53=6/, whi"h reads

Se". +=. ilin% of *dverse Clai&s>Confli"ts>Oppositions.3 Notwithstandin% the provisions ofSe"tions 8, 46 and 57 aove, an! adverse "lai&, protest or opposition spe"ified in said se"tions&a! also e filed dire"tl! with the Panel of *ritrators within the "on"erned periods for filin% su"h"lai&, protest or opposition as spe"ified in said Se"tions.



Se". 46. Puli"ation>Postin% of $ineral *%ree&ent *ppli"ation.3

1 1 1 1

)he Re%ional Dire"tor or "on"erned Re%ional Dire"tor shall also "ause the postin% of the appli"ationon the ulletin oards of the Bureau, "on"erned Re%ional offi"e's( and in the "on"erned provin"e's(

and &uni"ipalit!'ies(, "op! furnished the aran%a!s where the proposed "ontra"t area is lo"atedon"e a wee# for two '( "onse"utive wee#s in a lan%ua%e %enerall! understood in the lo"alit!. *fterfort!3five '45( da!s fro& the last date of puli"ation>postin% has een &ade and no adverse "lai&,protest or opposition was filed within the said fort!3five '45( da!s, the "on"erned offi"es shall issue a"ertifi"ation that puli"ation>postin% has een &ade and that no adverse "lai&, protest or oppositionof whatever nature has een filed. On the other hand, if there e an! adverse "lai&, protest oropposition, the sa&e shall e filed within fort!3five '45( da!s fro& the last date of puli"ation>postin%,with the Re%ional offi"es "on"erned, or throu%h the Depart&ent@s Co&&unit! Environ&ent andNatural Resour"es Offi"ers 'CENRO( or Provin"ial Environ&ent and Natural Resour"es Offi"ers'PENRO(, to e filed at the Re%ional Offi"e for resolution of the Panel of *ritrators. However,previousl! pulished valid and susistin% &inin% "lai&s are e1e&pted fro& posted>postin% re2uiredunder this Se"tion.

No &ineral a%ree&ent shall e approved unless the re2uire&ents under this se"tion are full!"o&plied with and an! opposition>adverse "lai& is dealt with in writin% ! the Dire"tor and resolved! the Panel of *ritrators. 'E&phasis supplied.(

)hese provisions lead us to "on"lude that the power of the PO* to resolve an! adverse "lai&,opposition, or protest relative to &inin% ri%hts under Se". 77'a( of R* 7=4 is "onfined onl! toadverse "lai&s, "onfli"ts and oppositions relatin% to appli"ations for the %rant of &ineral ri%hts.

PO*@s 9urisdi"tion is "onfined onl! to resolutions of su"h adverse "lai&s, "onfli"ts and oppositionsand it has no authorit! to approve or re9e"t said appli"ations. Su"h power is vested in the DENRSe"retar! upon re"o&&endation of the $B Dire"tor. Clearl!, PO*@s 9urisdi"tion over disputesinvolvin% ri%hts to &inin% areas has nothin% to do with the "an"ellation of e1istin% &inerala%ree&ents. 'e&phasis ours(

*""ordin%l!, as we enun"iated in Celestial, the PO* un2uestional! has 9urisdi"tion to resolvedisputes over $PS* appli"ations su9e"t of Red&ont@s petitions. However, said 9urisdi"tion does notin"lude either the approval or re9e"tion of the $PS* appli"ations, whi"h is vested onl! upon theSe"retar! of the DENR. )hus, the findin% of the PO*, with respe"t to the re9e"tion of petitioners@$PS* appli"ations ein% that the! are forei%n "orporation, is valid.

<usti"e $arvi" $ario i"tor . :eonen, in his Dissent, asserts that it is the re%ular "ourts, not thePO*, that has 9urisdi"tion over the $PS* appli"ations of petitioners.

)his postulation is in"orre"t.

It is asi" that the 9urisdi"tion of the "ourt is deter&ined ! the statute in for"e at the ti&e of the"o&&en"e&ent of the a"tion.54

Se". +=, Batas Pa&ansa Bl%. += or )he <udi"iar! Reor%ani0ation

*"t of +=8- reads





Se". +=. <urisdi"tion in Civil Cases.QRe%ional )rial Courts shall e1er"ise e1"lusive ori%inal 9urisdi"tion

+. In all "ivil a"tions in whi"h the su9e"t of the liti%ation is in"apale of pe"uniar! esti&ation.

On the other hand, the 9urisdi"tion of PO* is une2uivo"al fro& Se". 77 of R* 7=4

Se"tion 77. Panel of *ritrators.Q

1 1 1 Githin thirt! '6-( da!s, after the su&ission of the "ase ! the parties for the de"ision,the panel shall have e1"lusive and ori%inal 9urisdi"tion to hear and de"ide the followin%

'"( Disputes involvin% ri%hts to &inin% areas

'd( Disputes involvin% &ineral a%ree&ents or per&its

It is "lear that PO* has e1"lusive and ori%inal 9urisdi"tion over an! and all disputes involvin% ri%hts to&inin% areas. One su"h dispute is an $PS* appli"ation to whi"h an adverse "lai&, protest oropposition is filed ! another interested appli"ant.1âwphi1 In the "ase at ar, the dispute arose or ori%inatedfro& $PS* appli"ations where petitioners are assertin% their ri%hts to &inin% areas su9e"t of theirrespe"tive $PS* appli"ations. Sin"e respondent filed 6 separate petitions for the denial of saidappli"ations, then a "ontrovers! has developed etween the parties and it is PO*@s 9urisdi"tion toresolve said disputes.

$oreover, the 9urisdi"tion of the R)C involves "ivil a"tions while what petitioners filed with the DENRRe%ional Offi"e or an! "on"erned DENRE or CENRO are $PS* appli"ations. )hus PO* has

9urisdi"tion.

urther&ore, the PO* has 9urisdi"tion over the $PS* appli"ations under the do"trine of pri&ar! 9urisdi"tion. Euro3&ed :aoratories v. Provin"e of Batan%as55 elu"idates

)he do"trine of pri&ar! 9urisdi"tion holds that if a "ase is su"h that its deter&ination re2uires thee1pertise, spe"iali0ed trainin% and #nowled%e of an ad&inistrative od!, relief &ust first e otainedin an ad&inistrative pro"eedin% efore resort to the "ourts is had even if the &atter &a! well ewithin their proper 9urisdi"tion.

Ghatever &a! e the de"ision of the PO* will eventuall! rea"h the "ourt s!ste& via a resort to theC* and to this Court as a last re"ourse.

Sellin% of $B$I@s shares to D$CI

*s stated efore, petitioners@ $anifestation and Su&ission dated O"toer +=, -+ would want us

to de"lare the instant petition &oot and a"ade&i" due to the transfer and "onve!an"e of all theshareholdin%s and interests of $B$I to D$CI, a "orporation dul! or%ani0ed and e1istin% underPhilippine laws and is at least /-A Philippine3owned.5/ Petitioners reasoned that the! now "annot e"onsidered as forei%n3ownedJ the transfer of their shares supposedl! "ured the defe"t of theirprevious nationalit!. )he! "lai&ed that their "urrent )** "ontra"t with the State should stand sin"eeven wholl!3owned forei%n "orporations "an enter into an )** with the State.57Petitioners stressthat there should no lon%er e an! issue left as re%ards their 2ualifi"ation to enter into )**"ontra"ts sin"e the! are 2ualified to en%a%e in &inin% a"tivities in the Philippines. )hus, whether the









%randfather rule or the "ontrol test is used, the nationalities of petitioners "annot e doutedsin"e it would pass oth tests.

)he sale of the $B$I shareholdin%s to D$CI does not have an! earin% in the instant "ase and saidfa"t should e disre%arded. )he &anifestation "an no lon%er e "onsidered ! us sin"e it is ein%ta"#led in .R. No. -877 pendin% efore this Court. 1âwphi1 )hus, the 2uestion of whether petitioners,

alle%edl! a Philippine3owned "orporation due to the sale of $B$Is shareholdin%s to D$CI, areallowed to enter into )**s with the State is a non3issue in this "ase.

In endin%, the "ontrol test is still the prevailin% &ode of deter&inin% whether or not a "orporation isa ilipino "orporation, within the a&it of Se". , *rt. II of the +=87 Constitution, entitled to underta#ethe e1ploration, develop&ent and utili0ation of the natural resour"es of the Philippines. Ghen in the&ind of the Court there is dout, ased on the attendant fa"ts and "ir"u&stan"es of the "ase, in the/-34- ilipino3e2uit! ownership in the "orporation, then it &a! appl! the %randfather rule.

GHEREORE, pre&ises "onsidered, the instant petition is DENIED. )he assailed Court of *ppealsDe"ision dated O"toer +, -+- and Resolution dated eruar! +5, -++ are here! *IR$ED.

SO ORDERED.

Documents

Section 26-35-Francisco Villanueva and Narra Nickel