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.

FACTS

This case involves a conflict over mining claims in areas spanning Quezon and Camarines Norte. Tapian Mining Corporation (later Greenwater Mining Corporation) filed a Financial and Technical Assistance Agreement (FTAA) application covering approximately 100,000 hectares on February 20, 1995. The Philippine Mining Act of 1995 ( R.A. No. 7942 ) was enacted on March 3, 1995, imposing maximum area limits for FTAAs. Its Implementing Rules and Regulations (DAO 95-23, later DAO 96-40) required existing FTAA applicants with excess areas to divest or relinquish the excess within a one-year deadline, later extended to September 13, 1997. Greenwater failed to comply with this mandatory deadline.
Consequently, the Department of Environment and Natural Resources (DENR) deemed Greenwater’s FTAA applications relinquished. Subsequently, respondent V.I.L. Mines, Inc. (VMI) filed an Exploration Permit Application (EPA-IVA-63) over a portion of the relinquished area on November 10, 1997. Petitioner Bonaventure Mining Corporation (BMC) later filed its own application (EPA-IVA-72) for the same area on May 4, 1999. The Panel of Arbitrators upheld VMI’s application and canceled BMC’s. The Mines Adjudication Board (MAB) reversed this, but the Court of Appeals reinstated the Panel’s decision, prompting BMC’s petition.

ISSUE

Whether the Court of Appeals erred in affirming the validity of VMI’s exploration permit application and the cancellation of BMC’s permit.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The legal logic centers on the mandatory and jurisdictional nature of the statutory deadline for relinquishment. R.A. No. 7942 and its IRR (DAO 96-40) clearly provided that FTAA applicants with areas exceeding the maximum limit had until September 13, 1997, to divest or relinquish the excess. Greenwater’s failure to comply within this non-extendible period resulted in the automatic relinquishment of its application. This relinquishment opened the area for new applications.
VMI filed its application on November 10, 1997, after Greenwater’s rights had lapsed but well before BMC’s application in 1999. BMC’s argument that Greenwater’s FTAA application remained pending was untenable; the lapse of the statutory deadline extinguished any inchoate right Greenwater had. The law did not require a separate formal order of cancellation for non-compliance; the relinquishment was automatic by operation of law. Therefore, VMI, as the first applicant following the valid relinquishment, acquired a prior and superior right. Granting BMC’s later application would violate the principle of prior in time, prior in right, and would be highly inequitable. The Court upheld the findings of the Panel of Arbitrators and the Court of Appeals as supported by substantial evidence and consistent with mining laws.