G.R. No. L-39460; July 18, 1991
Baguio Gold Mining Co., petitioner, vs. Court of Appeals, Secretary of Agriculture and Natural Resources, The Director of Mines, Bernardo O. Valdez, et al., respondents.

FACTS

The dispute involves overlapping lode mineral claims in an area formerly part of the Baguio Townsite Reservation. Presidential Proclamation No. 572, concurred in by Congress on May 19, 1959, released this area for mining. Private respondents (Valdez, et al.) registered their declarations of location for 14 claims on May 20, 1959, at 1:18 P.M. Petitioner Baguio Gold Mining Co. registered its declarations for 13 conflicting claims on May 21, 1959. Both parties admitted they conducted prospecting and made mineral discoveries within the reservation years before its release, with petitioner claiming discoveries as early as 1947. Private respondents filed a protest with the Bureau of Mines.
The Director of Mines, in a 1964 decision, declared all locations null and void. He ruled that valid mining location could only be made after the area was legally released from the reservation on May 19, 1959. Since both parties’ physical acts of location and monumenting occurred before this date, they were premature and invalid. On appeal, the Secretary of Agriculture and Natural Resources reversed this in 1968, validating both sets of claims. The Secretary applied equitable considerations, noting the parties’ investments, and deemed the locations made within days of the release as substantial compliance. The Court of Appeals upheld the Secretary’s decision.

ISSUE

Whether the mining claim locations made by the parties before the effective date of the area’s release from the Baguio Townsite Reservation are valid.

RULING

No. The Supreme Court reversed the Court of Appeals and reinstated the 1964 decision of the Director of Mines. The legal logic is anchored on the mandatory and explicit language of the Mining Act (Commonwealth Act No. 137). Section 14 of the Act provides that lands within a reservation for non-mining purposes may be withdrawn and “shall revert to the public domain and be subject to disposition under the provisions of this Act” only upon presidential proclamation with congressional concurrence. The area remained part of the reservation, segregated from the public domain, until Proclamation No. 572 became effective on May 19, 1959. The Mining Act’s provisions on location, discovery, and lease apply only to lands of the public domain. Consequently, any act of location, including the physical staking and monumenting of claims, performed before the effective date of the release is legally void. The law does not recognize “equitable claims” or “substantial compliance” for locations made on land not yet open to mining entry. The Secretary of Agriculture and Natural Resources gravely abused his discretion by validating void acts based on equity, as he cannot contravene the clear mandate of the statute. Since both parties’ locations were made before May 19, 1959, they were correctly declared null and void by the Director of Mines.