G.R. No. 69203 . April 21, 1995.
ENRICO MANUEL, THE DIRECTOR OF MINES AND THE SECRETARY OF NATURAL RESOURCES, petitioners, vs. THE INTERMEDIATE APPELLATE COURT, UNITED PARACALE MINING CO., COCO GROVE, INC. AND MARSMAN & COMPANY, INC., respondents.

FACTS

Private respondents, United Paracale Mining Co., Coco Grove, Inc., and Marsman & Company, Inc., filed a petition to quiet title over several mining claims located in 1933-1934 under the Philippine Bill of 1902. They operated these claims until World War II, reconstituted the records afterward, and later applied for a patent. Their action was triggered by petitioner Enrico Manuel’s 1973 application for a mining lease over a claim (“Clement 1”) that overlapped with their claims. The trial court ruled in favor of the private respondents, declaring their claims had become private property under the Philippine Bill of 1902 and that the Director of Mines had no jurisdiction over Manuel’s lease application. The Intermediate Appellate Court affirmed this decision.

ISSUE

Whether mining claims located under the Philippine Bill of 1902, but for which no patent has been issued, constitute private property, thereby precluding the state from requiring a lease contract under subsequent laws.

RULING

The Supreme Court reversed the appellate court’s decision. The legal logic is anchored on the state’s regalian doctrine and the nature of mining rights prior to patent issuance. The Court, reiterating its ruling in a prior related case (United Paracale Mining Co., Inc. v. De la Rosa), held that Presidential Decree No. 1214, which required holders of patentable mining claims under the old law to file mining lease applications, is constitutional. Mere location of a mining claim does not confer absolute ownership; it merely segregates the area from the public domain to prevent other locators from claiming it. Full ownership is acquired only upon issuance of a patent. Since private respondents had not obtained patents, their claims remained part of the public domain. The constitutional provisions (1973 and 1987 Constitutions) mandate that all natural resources belong to the state and cannot be alienated, and their exploration and development are under full state control. Therefore, the declaration by the lower courts that the claims were private property was without legal effect. The state, through the Director of Mines, retained jurisdiction to entertain Manuel’s lease application, and private respondents were required to comply with P.D. 1214 by securing a mining lease.