G.R. No. L-16998; April 24, 1963
DANIEL ROMERO, CIPRIANO P. ROMERO, ET AL. (all in substitution of ALFREDO L. ROMERO, deceased); EDITA TORRES, ET AL., doing business under the name and style of KALAWAG MINING ENTERPRISES, petitioners, vs. PALAWAN MANGANESE MINES, INC., THE MANILA INSURANCE CO., INC., and THE DIRECTOR OF MINES, respondents.

FACTS

Petitioners, as Kalawag Mining Enterprises, located the Malcocobi No. 1 Placer Mining Claim in Coron, Palawan, in November 1936. In 1937, Amelia Zaldua’s group relocated the same area as Balitbitin No. 3, and respondent Palawan Manganese Mines, Inc. relocated it as part of its San Nicolas Lode Claim No. 4. A series of administrative and judicial contests ensued. The Director of Mines initially denied petitioners’ lease application and recognized respondent corporation’s preferential right. However, on appeal, the Secretary of Agriculture and Natural Resources reversed this, ruling that petitioners had the right to the area constituting Balitbitin No. 3/Malcocobi No. 1, a decision which became final.
Crucially, before this final administrative ruling, the Director of Mines had granted respondent corporation a six-month temporary permit in October 1950 to extract ore from the disputed claim, secured by a bond. Respondent corporation extracted 258 tons of ore under this permit. Based on the Secretary’s final decision in their favor, petitioners filed an action for damages in the Court of First Instance of Manila to recover the value of the extracted ore.

ISSUE

Whether petitioners have a cause of action to recover damages, representing the value of the ore extracted by the respondent corporation under a temporary permit, based on a subsequent administrative decision recognizing their preferential right to a mining lease.

RULING

The Supreme Court denied the petition and affirmed the dismissal of the complaint, ruling that petitioners had no cause of action. The Court held that the final decision of the Secretary of Agriculture and Natural Resources merely recognized petitioners’ preferential right to apply for and obtain a lease from the government over the mining claim. It did not confer upon them ownership or an “absolute right to exploit and enjoy” the claim at the time the ore was extracted. The legal logic is that a preferential right to a lease is distinct from a vested property right in the minerals themselves prior to the lease’s grant.
The Court upheld the factual finding of the Court of Appeals that petitioners’ lease application was still pending compliance with legal requirements until March 1957, long after the 1950 extraction. Therefore, during the period of extraction under a lawful temporary permit issued by the Director of Mines, petitioners had no possessory or proprietary interest in the minerals that could support a claim for damages for their removal. The bond filed by the corporation was conditioned to pay damages to “adverse claimants,” but petitioners, lacking a perfected lease or vested right at the material time, were not such claimants entitled to compensation. The cause of action for damages was thus unfounded.