G.R. No. L-43277; April 26, 1990
STANDARD MINERAL PRODUCTS, INC., petitioner, vs. THE HON. COURT OF APPEALS, RUFINO DEEUNHONG, PAZ SUMULONG-TANJUATCO AND EMIGDIO G. TANJUATCO, respondents, REPUBLIC OF THE PHILIPPINES, intervenor.

FACTS

Petitioner Standard Mineral Products, Inc. (SMPI) located and registered placer mining claims over limestone on a 15-hectare portion of a 120-hectare private property. The property was registered under respondent Rufino Deeunhong’s name, but he held it in trust for himself and co-respondents Paz Sumulong-Tanjuatco and Emigdio Tanjuatco, making them co-owners. SMPI applied for a mining lease with the Bureau of Mines, but the landowners opposed because SMPI had entered the land and filed the application without securing their prior written permission as required by law. No agreement was reached, prompting SMPI to file an action in the Court of First Instance of Rizal, praying for surface rights and a right-of-way over the property.
The trial court dismissed SMPI’s complaint, finding the mineral claims were not located in accordance with law due to the lack of prior written permission from the surface owners. It also awarded damages to the landowners. The Court of Appeals affirmed the dismissal but modified the damages awarded to temperate damages. The Supreme Court granted the Republic’s intervention, which had a separate reversion case over the same property, and archived the case pending the outcome of that appeal. The reversion case was eventually dismissed, finalizing the landowners’ title and ripening the present controversy for resolution.

ISSUE

The focal issue is whether SMPI is entitled to surface rights and a right-of-way over the landowners’ property. A corollary issue is whether the trial and appellate courts had jurisdiction over the case in light of Section 61 of the Mining Act.

RULING

The Supreme Court denied SMPI’s petition and affirmed the lower courts’ rulings. SMPI is not entitled to surface rights because it failed to comply with the mandatory requirement under Section 27 of the Mining Act ( Commonwealth Act No. 137 ), which explicitly requires a prospector to first apply in writing for the written permission of the private surface owner before entering the land. SMPI’s entry and prospecting without such prior consent rendered its claims invalid. The Court rejected SMPI’s jurisdictional challenge, which argued that the dispute fell under the exclusive jurisdiction of the Director of Mines per Section 61 of the Mining Act. The Court clarified that Section 61 applies to conflicts and disputes arising out of mining locations, such as overlapping claims. The present case, however, involves a basic judicial question of entitlement to surface rights against private landowners, not a mining conflict between rival claimants. Furthermore, SMPI actively participated in the trial court proceedings and raised the jurisdictional issue only after an adverse judgment, thus estopping it from impugning the court’s jurisdiction. The Court, however, in the exercise of its discretion, reduced the award of temperate damages to P10,000.00 for Deeunhong and another P10,000.00 for the Tanjuatcos.