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Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 174918             August 13, 2008

BONAVENTURE MINING CORPORATION, petitioner,
vs.
V.I.L. MINES, INCORPORATED, Represented by its Corporate Secretary, ROXANNA S. GO, respondent.

D E C I S I O N

PUNO, C.J.:

Before us is a Petition for Review under Rule 45 of the Rules of Court filed by the petitioner Bonaventure Mining Corporation (BMC), to set aside the Decision¹ of the Court of Appeals dated August 29, 2006 (CA Decision) which reversed the Decision² of the Mines Adjudication Board (MAB) and reinstated the Decision³ of the Panel of Arbitrators upholding the EPA-IVA-63 of respondent V.I.L. Mines, Incorporated (VMI), and canceling the EPA-IVA-72 of petitioner BMC.

This case involves a conflict over mining claims between BMC and VMI over a mountainous section that transcends the common boundaries of the provinces of Quezon and Camarines Norte, specifically within the municipal jurisdictions of Tagkawayan and Guinigayangan in Quezon, and Labo and Sta. Elena in Camarines Norte.⁴

The facts are of record.

On February 20, 1995, Tapian Mining Corporation (now Greenwater Mining Corporation [Greenwater]) filed an application for a Financial and Technical Assistance Agreement (FTAA) with the Central Office of the Mines and Geosciences Bureau (MGB) covering approximately 100,000 hectares in Tagkawayan, Quezon as well as in the provinces of Camarines Norte and Camarines Sur. Before that time, Greenwater had already filed other FTAA applications, specifically in Marinduque, covering 73,000 hectares, and in the Bulacan, Quezon and Rizal provinces totaling another 100,000 hectares.⁵

On March 3, 1995, Republic Act No. 7942 (R.A. No. 7942), otherwise known as "The Philippine Mining Act of 1995," was passed by Congress. It provided for the maximum allowable area that may be granted a qualified person under a FTAA, viz:

SECTION 34. Maximum Contract Area. — The maximum contract area that may be granted per qualified person, subject to relinquishment shall be:

(a) 1,000 meridional blocks onshore;

(b) 4,000 meridional blocks offshore; or

(c) Combinations of (a) and (b) provided that it shall not exceed the maximum limits for onshore and offshore areas.

On March 12, 1996, the Department of Environment and Natural Resources (DENR) issued the implementing rules and regulations (IRR) of R.A. No. 7942 in the form of Department Administrative Order No. (DAO) 95-23. It gave FTAA applicants a deadline of one (1) year from its date of effectivity within which to divest or relinquish from their applications areas exceeding the maximum provided by R.A. No. 7942. Section 257 of DAO 95-23 provides:

Section 257. Non-impairment of Existing Mining/Quarrying Rights. —

x x x

All pending applications for MPSA/FTAA and exploration permits issued prior to the promulgation of these implementing rules and regulations shall be governed by the provisions of the Act and these implementing rules and regulations; Provided, however, that where the grant of such FTAA application/proposals would exceed the maximum contract area restrictions contained in Section 34 of the Act, the applicant/proponent shall have one year, from the effectivity of these implementing rules and regulations, to divest or relinquish applications or portions thereof which, if granted, would exceed the maximum contract area allowance provided under the Act; Provided, finally, that this provision is applicable only to all FTAA applications filed under DAO 63 prior to the approval of the Act. (Emphasis supplied)

x x x

On August 27, 1996, Section 257 of DAO 95-23 was amended by DAO 96-25 giving FTAA applicants an extension of one (1) year within which to divest or relinquish excess areas from their applications, viz:

Section 257. Non-Impairment of Existing Mining/Quarrying Rights.—

x x x

All pending applications for MPSA/FTAA covering forest land and other government reservations shall not be required to re-apply for exploration permit provided, that where the grant of such FTAA applications/proposals would exceed the maximum contract area restrictions contained in Section 34 of the Act, the applicant/proponent shall be given an extension of one year, reckoned from September 13, 1996, to divest or relinquish in favor of government, areas in excess of the maximum area allowance provided under the Act. (Emphasis supplied)

On December 19, 1996, DAO 96-40, the revised IRR of R.A. No. 7942, was issued. Among other provisions, DAO 96-40 reiterated the deadline of one (1) year from September 13, 1996, or until September 13, 1997, within which FTAA applicants may divest or relinquish certain areas in their applications which exceed the maximum allowable area under R.A. No. 7942. Section 272 of DAO 96-40 provides as follows:

Section 272. Non-Impairment of Existing Mining/Quarrying Rights.—

x x x

All pending applications for MPSA/FTAA covering forest land and Government Reservations shall not be required to re-apply for Exploration Permit: Provided, That where the grant of such FTAA applications/proposals would exceed the maximum contract area restrictions contained in Section 34 of the Act, the applicant/proponent shall be given an extension of one (1) year, reckoned from September 13, 1996, to divest or relinquish pursuant to Department Administrative Order No. 96-25 in favor of the Government, areas in excess of the maximum area allowance provided under the Act. For this purpose, a Special Exploration Permit of limited applications and activities shall be issued by the Secretary upon the recommendation of the Director, subject to the terms and conditions specified in the Permit and pertinent provisions of Chapter V hereof: Provided, That an area permission shall be granted likewise by the Secretary to undertake limited exploration activities in non-critical forest reserves and forest reservations and such other areas within the jurisdiction of the Department. In other areas, however, the applicant/proponent shall secure the necessary area clearances or written consent by the concerned agencies or parties, as provided for by law: Provided, further, That the time period shall be deducted from the life of the MPSA/FTAA and exploration costs can be included as part of pre-operating expenses for purposes of cost recovery should the FTAA be approved: Provided, finally, That this provision is applicable only to all FTAA/MPSA applications filed under Department Administrative Order No. 63 prior to the effectivity of the Act and these implementing rules and regulations. (Emphasis supplied)

x x x

On August 27, 1997, the DENR issued Department Memorandum Order No. 97-07 (DMO 97-07), entitled "Guidelines in the Implementation of the Mandatory September 15, 1997 Deadline for the Filing of Mineral Agreement Applications by Holders of Valid and Existing Mining Claims and Lease/Quarry Applications and for Other Purposes." DMO 97-07 provides, among others, for the following: (1) the deadline for the relinquishment of excess areas shall be on September 15, 1997 (September 13, 1997 falling on a Saturday);⁶ (2) all applicants of FTAA applications filed under DAO 57 and DAO 63 with insufficient compliance of the mandatory requirements shall submit, on September 15, 1997, a Status Report indicating the requirements that have not been complied with and a Letter with the undertaking that the said requirements will be completely complied with on or before October 30, 1997;⁷ and (3) the deadlines prescribed shall not be subject to extension.⁸

On September 17, 1996, St. Joe Mining Corporation filed an Exploration Permit Application, denominated as EPA-IVA-24, with an area of 11,340 hectares situated in Tagkawayan, Quezon which overlaps the FTAA application of Greenwater.

On September 26, 1997, pursuant to DMO 97-07, Greenwater filed a Letter of Intent⁹ dated September 10, 1997 with the MGB stating its intention to retain its first FTAA application in Marinduque and to relinquish the areas in excess of the maximum allowable 81,000 hectares covered by its other FTAA applications including those which cover areas of Quezon Province and Camarines Norte.

On October 22, 1997, OIC-Regional Director Reynulfo Juan sent a letter¹⁰ to Greenwater stating that the latter has fifteen (15) days from receipt of the letter to submit the technical descriptions of the areas Greenwater intends to relinquish with a warning that failure to do so would cause the denial of the FTAA application in those areas.

On November 10, 1997, VMI filed an Exploration Permit Application,¹¹ denominated as EPA-IVA-63, with an area of 11,826 hectares. VMI’s application covers areas included in Greenwater’s FTAA application in Quezon Province and Camarines Norte.

On December 8, 1997, MGB Region IV rejected EPA-IVA-24 of St. Joe Mining Corporation on the ground that it was filed at the time that Greenwater’s FTAA application was still valid and existing.

On February 23, 1998, OIC-Regional Director Reynulfo Juan sent another letter¹² to Greenwater stating that due to failure to comply with the directives in the letter dated October 22, 1997, Greenwater’s FTAA applications "are deemed to have been relinquished as provided for under DENR Memorandum Order No. 97-07."

On May 4, 1999, BMC filed an Exploration Permit Application,¹³ denominated as EPA-IVA-72, with an area of 9,794 hectares which almost completely overlaps the area covered by VMI’s application.

On October 4, 1999, VMI filed a petition for the cancellation of BMC’s exploration permit application claiming that it overlaps with its prior and existing application. The petition was later amended on February 28, 2000, to include the cancellation and confirmation of the nullity of St. Joe Mining Corporation’s EPA-IVA-24.

On March 22, 2002, the Panel of Arbitrators rendered its Decision¹⁴ upholding the validity of VMI’s exploration permit application and declaring BMC’s and St. Joe Mining Corporation’s applications as null and void.

On July 5, 2002, BMC filed a Notice of Appeal and Memorandum of Appeal with the MAB. On August 24, 2004, the MAB rendered its Decision,¹⁵ modifying the decision of the Panel of Arbitrators. The MAB gave due course to BMC’s application for an exploration permit but allowed VMI’s application to proceed, sans the areas covered by BMC’s application.

From this decision, VMI filed its Petition for Review with the Court of Appeals. The Court of Appeals reversed and set aside the decision of the MAB and reinstated the decision of the Panel of Arbitrators.

Hence, BMC now comes to this Court raising the following issues:

A.

WHETHER THE COURT OF APPEALS COMMITTED A GRAVE AND REVERSIBLE ERROR WHEN IT RULED THAT FAILURE TO COMPLY WITH DENR MEMORANDUM ORDER NO. 97-07 ON RETENTION REQUIREMENTS WOULD CAUSE THE CANCELLATION OF THE FTAA APPLICATION BY OPERATION OF LAW.

B.

WHETHER THE COURT OF APPEALS COMMITTED A GRAVE AND REVERSIBLE ERROR WHEN IT RULED THAT THE DISPUTED AREA IS OPEN FOR MINING APPLICATIONS AFTER 30 OCTOBER 1997 AND CONSEQUENTLY UPHOLDING THE MINING APPLICATION OF RESPONDENT AND CANCELING PETITIONER’S.¹⁶

VMI, however, questions the timeliness of the filing of the petition. Hence, before we can consider the merits of the case, it is imperative that the Court address this issue in view of the procedural stricture that the timely perfection of an appeal is both a mandatory and jurisdictional requirement.

In its Comment, VMI contends that BMC received a copy of the CA Decision on September 5, 2006 and not on October 9, 2006 as alleged by BMC.¹⁷ To support its claim, VMI presented a Certification¹⁸ from the Makati Central Post Office dated October 5, 2005 stating that a copy of the CA Decision was served by Letter Carrier Larry Lopez to BMC’s counsel on September 5, 2006 but the same was returned by the Letter Carrier to the sender, the Court of Appeals, for the reason that counsel for BMC had allegedly "MOVED OUT" of his address of record. Thus, the filing of the Petition only on October 23, 2006 is out of time.

In its Reply, BMC alleges that the office address of its counsel, Atty. Fernando Peñarroyo (Atty. Peñarroyo), is and has always been at Unit 201 Orient Mansions, Tordecillas St., Salcedo Village, Makati City and at no time has Atty. Peñarroyo ever transferred or moved out of the said address.¹⁹ BMC and Atty. Peñarroyo further contend that they are perplexed on how the alleged Letter Carrier from the Makati Central Post Office could have delivered a copy of the CA Decision on September 5, 2006 and be informed that Atty. Peñarroyo had moved out.²⁰ To prove the said allegations, BMC presented the following: 1) affidavit²¹ of Ms. Eloisa M. Josef, Building Administrator of Orient Mansions; 2) pertinent portion of the security logbook²² of Orient Mansions; and 3) affidavit²³ of Mr. Jeffrey A. Dalisay, the guard on duty on September 5, 2006.

According to VMI, the CA Decision which was received on October 9, 2006 was the copy sent to BMC, whose address is at Unit 201 Orient Mansions, Tordecillas St., Salcedo Village, Makati City. Atty. Peñarroyo’s office address is, however, at L/2 Orient Mansions, Tordecillas St., Salcedo Village, Makati City, which is the same address used by the Court of Appeals when it mailed the CA Decision to him and the same address stated in the Makati Central Post Office Certification.²⁴

BMC counters, however, that the fact that the copy of the CA Decision received on October 9, 2006 was addressed to BMC and not to Atty. Peñarroyo is of no significance since they actually share the same office address.²⁵

We hold that the petition was filed out of time.

Well-settled is the rule that when a party is represented by counsel of record, service of orders and notices must be made upon said attorney.²⁶ Accordingly, it is the date of service on counsel of record of the notice of judgment which is considered the starting point from which the period of appeal prescribed by law shall begin to run.²⁷

The records of this case clearly show that Atty. Peñarroyo’s address of record used in the proceedings below is L/2 and not Unit 201 at the Orient Mansions.

In the proceedings before the Panel of Arbitrators, the Resolution²⁸ denying BMC’s Motion for Reconsideration, from which BMC filed a Notice of Appeal, was furnished to Atty. Peñarroyo at L/2 Orient Mansions.

In the proceedings before the MAB, the Notice of Issuance of An Order²⁹ informing the parties that a decision has been rendered was likewise furnished to Atty. Peñarroyo at L/2 Orient Mansions.

In the proceedings before the Court of Appeals, the Notice of Resolution³⁰ informing the parties of the resolution ordering BMC to comment on the petition for review filed by VMI indicates that Atty. Peñarroyo’s address is at L/2 Orient Mansions. This was received by him since in compliance he filed a Comment in which he used the same address.³¹ Likewise, CA Form No. 1³² informing the parties of the resolution directing them to file their respective memoranda was sent to him at L/2 Orient Mansions. This was received by him for in compliance he filed a Memorandum in which he used the same address.³³ It was only in the Petition filed before this Court did Atty. Peñarroyo use Unit 201 as his address after VMI had already filed a Manifestation³⁴ questioning the alleged date of receipt of the CA Decision. In fact, in the Reply, where he alleged that his address of record has always been at Unit 201, he still indicated L/2 as his address below his signature.³⁵

Hence, we cannot give credence to Atty. Peñarroyo’s claim that his address is and has always been at Unit 201. The fact that both addresses refer to the same building does not obliterate the fact that they are two different addresses. BMC and Atty. Peñarroyo cannot expect the public to assume that both addresses are one and the same and neither can they be used interchangeably. It was incumbent upon him to inform the Court of Appeals of the change of his address of record from L/2 to Unit 201 at the Orient Mansions. His failure to do so bears consequences which bind BMC.

The rule is that clients are bound by the actions of their counsel in the conduct of their case. If counsel moves to another address without informing the court of that change, such omission or neglect is inexcusable and will not stay the finality of the decision. The court cannot be expected to take judicial notice of the new address of a lawyer who has moved.³⁶

In brief, the service of the CA Decision on September 5, 2006 at his address of record per the Makati Central Post Office Certification should be the reckoning point from which BMC’s period to file the petition begins to run. Thus, the assailed CA Decision became final and executory.

Nevertheless, we have reviewed the records and find that even on its merits the instant petition is destined to fail for reasons we shall discuss briefly.

Section 12 of DMO 97-07 reads:

SECTION 12. Divestment/Relinquishment of Areas in Excess of Maximum FTAA Contract Area

All FTAA applications filed prior to the effectivity of the Act which exceed the maximum contract area as set forth in Section 34 of the Act and Section 51 of the IRR must conform to said maximum on or before September 15, 1997. For this purpose, all applicants who have not otherwise relinquished or divested any areas held in excess of the allowable maximum by September 15, 1997 must relinquish/divest said areas on such date in favor of the Government by filing a Declaration of Areas Relinquished/Divested, containing the technical description of such area/s, with the Bureau/concerned Regional Office. The concerned applications shall be accordingly amended and areas relinquished/divested shall be open for Mining Applications.

x x x

Failure to relinquish/divest areas in excess of the maximum contract area as provided for in this section will result in the denial or cancellation of the FTAA application after which, the areas covered thereby shall be open for Mining Applications. (Emphasis supplied)

BMC contends that based on the foregoing provision, the inability of the FTAA applicant to submit the required documents is only a ground for the MGB or the DENR to cancel or revoke its FTAA application and an executive action is needed before the area becomes open for mining applications.³⁷ Accordingly, Greenwater’s FTAA applications were cancelled and the areas covered thereby became open to mining applications only fifteen days after its receipt of the February 23, 1998 letter of OIC-Regional Director Reynulfo Juan informing it that its FTAA applications have been cancelled.

We find no merit to BMC’s contention.

It is undisputed that Greenwater filed its Letter of Intent only on September 26, 1997 or 11 days after the September 15, 1997 mandatory deadline set by Section 12 of DMO 97-07.

Section 12 of DMO 97-07 provides for the effect of failing to relinquish excess areas within the deadline, that it "will result in the denial or cancellation of the FTAA application.…" No further executive action is necessary since DMO 97-07 itself already provided for the sanction of failing to meet the deadline. Any executive action beyond the deadline would be a mere superfluity.

Section 12 of DMO 97-07 must be read in conjunction with Section 14 which states that the deadlines therein are not subject to extension, viz:

SECTION 14. No Extension of Periods

The deadline set at September 15, 1997 pursuant to Section 4 hereof and all other periods prescribed herein shall not be subject to extension. (Emphasis supplied)

DMO 97-07 was promulgated precisely to set a specific date for all FTAA applicants within which to relinquish all areas in excess of the maximum prescribed by law. Accordingly, the deadline cannot be extended or changed except by amending DMO 97-07. OIC-Regional Director Reynulfo Juan had no authority to extend the deadline set by DMO 97-07. We agree with the ruling of the Court of Appeals:

The language of the memorandum order is plain, precise and unequivocal – the period cannot be extended. Beyond that, the pending FTAA applications could no longer be officially acted upon as they were deemed to have expired. DMO 97-07 could only be extended by another memorandum order or law specifically amending the deadline set forth therein. No government officer or employee can do so.

x x x

It is Our considered view that the FTAA application of Greenwater ipso facto expired when it did not take any step to comply with the order. There was no need for any pronouncement or official action. If ever there would be any executive action, it would only be to certify that the application was already cancelled as OIC-Regional Director Reynulfo Juan did when, on January 23, 1998 (sic)³⁸, it wrote Greenwater that its application over the excess areas was cancelled. No executive action can stretch the deadline beyond what was stated in the memorandum order, DMO 97-07.

OIC-Regional Director Reynulfo Juan violated DMO 97-07, when in his October 22, 1997 Letter, he gave Greenwater a period beyond the date of the deadline within which to submit the technical descriptions of the areas it wanted to relinquish. By giving Greenwater a period extending beyond October 30, 1997, he was in effect extending the deadline set forth in Section 13 of DMO 97-07. That he could not lawfully do.

He had no authority extending the deadline because the memorandum order which he was supposed to implement stated that the "period prescribed herein shall not be subject to extension." Beyond October 30, 1997 all FTAA applications which failed to comply with the memorandum order expired and were deemed cancelled by operation of law.³⁹ (Emphasis supplied)

Finally, even equitable considerations do not favor the petitioner. It is clear from the outset that Greenwater had already lost interest in pursuing its FTAA application. After being given two (2) years to comply with the requirements, Greenwater only filed its Letter of Intent belatedly and did not take any further action nor contested the letter dated February 23, 1998 of OIC-Regional Director Reynulfo Juan informing it that its FTAA applications have been deemed relinquished. It must be emphasized that Greenwater and the public were aware of the deadline and the consequences of failing to meet the same. Accordingly, VMI cannot be faulted for relying on the fact that Greenwater did not comply with the requirements within the deadline set by DMO 97-07 and had already lost interest, for all intents and purposes, in the area it wished to apply for. VMI filed its application on November 10, 1997, or almost 2 years ahead than BMC’s application which was filed on May 4, 1999. To rule now that it is BMC’s application which should be given due course on an alleged technicality which has no clear basis in law or in the rules will be highly inequitable.

IN VIEW WHEREOF, the petition is DENIED. The decision of the Court of Appeals is affirmed. Costs against petitioner.

SO ORDERED.

REYNATO S. PUNO
Chief Justice

WE CONCUR:

ANTONIO T. CARPIO Associate Justice
RENATO C. CORONA Associate Justice	ADOLFO S. AZCUNA Associate Justice
TERESITA J. LEONARDO-DE CASTRO Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO
Chief Justice

Footnotes

¹ Rollo, pp. 52-70; penned by Justice Jose Catral Mendoza, concurred in by Justices Elvi John S. Asuncion and Sesinando E. Villon.

² Id. at 91-105; dated August 24, 2004.

³ Id. at 76-89; dated March 22, 2002.

⁴ Id. at 6.

⁵ Id. at 436.

⁶ Section 12 of DENR Department Memorandum Order No. (DMO) 97-07, August 27, 1997.

⁷ Id. at Section 13.

⁸ Id. at Section 14.

⁹ CA rollo, p. 43.

¹⁰ Id. at 44.

¹¹ Id. at 45.

¹² Id. at 47.

¹³ Id. at 48-49.

¹⁴ Rollo, pp. 76-89.

¹⁵ Id. at 91-105.

¹⁶ Id. at 16. (Boldfaced in the original)

¹⁷ Id. at 110.

¹⁸ Id. at 222.

¹⁹ Id. at 244-245.

²⁰ Id. at 245.

²¹ Id. at 253-254.

²² Id. at 255-266.

²³ Id. at 267-268.

²⁴ Id. at 450.

²⁵ Id. at 246-247.

²⁶ Karen and Kristy Fishing Industry v. Court of Appeals, G.R. Nos. 172760-61, October 15, 2007, 536 SCRA 243, 250.

²⁷ Cubar, et al. v. Hon. Mendoza, etc., et al., 205 Phil. 672, 676 (1983).

²⁸ CA rollo, pp. 232-240; dated June 11, 2002.

²⁹ Id. at 319; dated August 30, 2004.

³⁰ Id. at 446; dated August 18, 2005.

³¹ Id. at 479.

³² Id. at 515; signed by Zamita T. Mationg, Acting Division Clerk of Court of the Special Sixteenth Division of the Court of Appeals.

³³ Id. at 609.

³⁴ Id. at 663 to 670; dated October 23, 2006.

³⁵ Rollo, p. 250.

³⁶ Supra note 26 at 249.

³⁷ Rollo, pp. 326-329.

³⁸ Should be February 23, 1998.

³⁹ Rollo, p. 66.

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