RepublicofthePhilippines

SUPREMECOURTManila

SECONDDIVISION

BENGUETCORPORATION,G.R.No.163101Petitioner,Present:versusQUISUMBING,J.,Chairperson,CARPIO,

CARPIOMORALES,TINGA,andDEPARTMENTOFENVIRONMENTVELASCO,JR.,JJ.ANDNATURALRESOURCESMINESADJUDICATIONBOARDandJ.G.REALTYANDMININGPromulgated:CORPORATION,Respondents.February13,2008xx

DECISION

VELASCO,JR.,J.:TheinstantpetitionunderRule65oftheRulesofCourtseekstheannulmentofthe

December2,2002Decision[1]

andMarch17,2004Resolution[2]

of theDepartment ofEnvironmentandNaturalResourcesMiningAdjudicationBoard(DENRMAB)inMABCase No. 012401 (Mines Administrative Case No. RM200001) entitled BenguetCorporation (Benguet) v. J.G. Realty and Mining Corporation (J.G. Realty). The

December2,2002DecisionupheldtheMarch19,2001Decision[3]

oftheMABPanelofArbitrators (POA) which canceled the Royalty Agreement with Option to Purchase

(RAWOP)datedJune1,1987[4]

betweenBenguetandJ.G.Realty,andexcludedBenguetfrom the joint Mineral Production Sharing Agreement (MPSA) application over fourmining claims. The March 17, 2004 Resolution denied Benguets Motion for

Reconsideration.

TheFacts OnJune1,1987,BenguetandJ.G.RealtyenteredintoaRAWOP,whereinJ.G.Realty was acknowledged as the owner of four mining claims respectively named asBonitoI, BonitoII, BonitoIII, and BonitoIV, with a total area of 288.8656 hectares,situated inBarangayLuklukam, SitioBagongBayan,Municipalityof Jose Panganiban,

CamarinesNorte.ThepartiesalsoexecutedaSupplementalAgreement[5]

datedJune1,

1987.TheminingclaimswerecoveredbyMPSAApplicationNo.APSAV0009jointlyfiledbyJ.G.RealtyasclaimownerandBenguetasoperator.IntheRAWOP,Benguetobligateditselftoperfecttherightstotheminingclaimsand/orotherwiseacquiretheminingrightstothemineralclaims.Within24monthsfromtheexecutionof theRAWOP,Benguetshouldalsocause theexaminationof theminingclaims for the purpose of determining whether or not they are worth developing withreasonable probability of profitable production. Benguet undertook also to furnish J.G.Realtywithareportontheexamination,withinareasonabletimeafterthecompletionoftheexamination.Moreover,alsowithintheexaminationperiod,Benguetshallconductallnecessaryexplorationinaccordancewithapreparedexplorationprogram.Ifitchoosestodo so and before the expiration of the examination period, Benguet may undertake todeveloptheminingclaimsuponwrittennoticetoJ.G.Realty.Benguetmustthenplacetheminingclaimsintocommercialproductivestagewithin24monthsfromthewrittennotice.[6]

ItisalsoprovidedintheRAWOPthatiftheminingclaimswereplacedincommercialproductionbyBenguet,J.G.Realtyshouldbeentitledtoaroyaltyoffivepercent(5%)ofnetrealizablevalue,andtoroyaltyforanyproductiondonebyBenguetwhetherduringtheexaminationordevelopmentperiods. Thus,onAugust9,1989, theExecutiveVicePresidentofBenguet,AntonioN.Tachuling, issued a letter informing J.G. Realty of its intention to develop the miningclaims.However,onFebruary9,1999,J.G.Realty,throughitsPresident,JohnnyL.Tan,

thensentalettertothePresidentofBenguetinformingthelatterthatitwasterminatingtheRAWOPonthefollowinggrounds:

a. ThefactthatyourcompanyhasfailedtoperformtheobligationssetforthintheRAWOP, i.e., toundertakedevelopmentworkswithin2years fromtheexecutionoftheAgreement

b.ViolationoftheContractbyallowinghighgraderstooperateonourclaim.

c.NostipulationwasprovidedwithrespecttothetermlimitoftheRAWOP.

d.NonpaymentoftheroyaltiesthereonasprovidedintheRAWOP.[7]

In response,BenguetsManager forLegalServices,ReynaldoP.Mendoza,wrote

J.G.RealtyaletterdatedMarch8,1999,[8]

thereinallegingthatBenguetcompliedwithitsobligationsundertheRAWOPbyinvestingPhP42.4milliontorehabilitatethemines,andthatthecommercialoperationwashamperedbythenonissuanceofaMinesTemporaryPermitbytheMinesandGeosciencesBureau(MGB)whichmustbeconsideredasforcemajeure, entitling Benguet to an extension of time to prosecute such permit. Benguetfurther claimed that the high graders mentioned by J.G. Realty were already operatingpriortoBenguetstakingoverofthepremises,andthatJ.G.Realtyhadtheobligationofejecting such small scale miners. Benguet also alleged that the nature of the miningbusinessmadeitdifficulttospecifyatimelimitfortheRAWOP.BenguetthenarguedthattheroyaltiesduetoJ.G.Realtywereinfactinitsofficeandreadytobepickedupatanytime.Itappearedthat,previously,thepracticebyJ.G.RealtywastopickupchecksfromBenguetrepresentingsuchroyalties.However,startingAugust1994,J.G.Realtyallegedlyrefused to collect such checks from Benguet. Thus, Benguet posited that there was novalidgroundfortheterminationoftheRAWOP.ItalsoremindedJ.G.RealtythatitshouldsubmitthedisagreementtoarbitrationratherthanunilaterallyterminatingtheRAWOP.

OnJune7,2000,J.G.RealtyfiledaPetitionforDeclarationofNullity/Cancellation

of theRAWOP[9]

with theLegaspiCityPOA,RegionV,docketedasDENRCaseNo.200001andentitledJ.G.Realtyv.Benguet.

OnMarch19,2001,thePOAissuedaDecision,[10]

dwellingupontheissuesof(1)whetherthearbitratorshadjurisdictionoverthecaseand(2)whetherBenguetviolatedtheRAWOP justifying the unilateral cancellation of the RAWOP by J.G. Realty. Thedispositiveportionstated:

WHEREFORE, premises considered, the June 01, 1987 [RAWOP] and its

SupplementalAgreement isherebydeclaredcancelledandwithouteffect.BENGUET isherebyexcludedfromthejointMPSAApplicationoverthemineralclaimsdenominatedasBONITOI,BONITOII,BONITOIIIandBONITOIV.

SOORDERED.

Therefrom,BenguetfiledaNoticeofAppeal[11]

withtheMABonApril23,2001,docketed asMinesAdministrativeCaseNo.RM200001.Thereafter, theMAB issuedtheassailedDecember2,2002Decision.BenguetthenfiledaMotionforReconsiderationoftheassailedDecisionwhichwasdeniedintheMarch17,2004ResolutionoftheMAB.Hence,Benguetfiledtheinstantpetition.

TheIssues

1.TherewasseriousandpalpableerrorwhentheHonorableBoardfailedtorulethat thecontractualobligationof theparties toarbitrateunder theRoyaltyAgreement ismandatory.

2. The Honorable Board exceeded its jurisdiction when it sustained the

cancellationoftheRoyaltyAgreementforallegedbreachofcontractdespitetheabsenceofevidence.

3. TheQuestionedDecisionoftheHonorableBoardincancellingtheRAWOP

prejudice[d]thesubstantialrightsofBenguetunderthecontracttotheunjustenrichment

ofJGRealty.[12]

Restated, the issuesare:(1)Should thecontroversyhavefirstbeensubmitted toarbitrationbeforethePOAtookcognizanceofthecase?(2)WasthecancellationoftheRAWOPsupportedbyevidence?and(3)DidthecancellationoftheRAWOPamounttounjustenrichmentofJ.G.RealtyattheexpenseofBenguet?

TheCourtsRuling

Beforewedwellon thesubstantive issues,wefind that the instantpetitioncanbe

deniedoutrightasBenguetresortedtoanimproperremedy.ThelastparagraphofSection79ofRepublicActNo.(RA)7942orthePhilippineMiningActof1995states,Apetitionforreviewbycertiorariandquestionoflawmaybe filed by the aggrieved party with the Supreme Court within thirty (30) days fromreceiptoftheorderordecisionofthe[MAB]. However, this Court has already invalidated such provision inCarpio v. Sulu

Resources Development Corp.,[13]

ruling that a decision of the MAB must first beappealed to the Court of Appeals (CA) under Rule 43 of the Rules of Court, beforerecoursetothisCourtmaybehad.Weheld,thus:

Tosummarize,therearesufficientlegalfootingsauthorizingareviewoftheMAB

DecisionunderRule43oftheRulesofCourt.First,Section30ofArticleVIofthe1987Constitution,mandatesthat[n]olawshallbepassedincreasingtheappellatejurisdictionoftheSupremeCourtasprovidedinthisConstitutionwithoutitsadviceandconsent.Ontheotherhand,Section79ofRANo.7942provides thatdecisionsof theMABmaybereviewedbythisCourtonapetitionforreviewbycertiorari.Thisprovisionisobviouslyanexpansionof theCourts appellate jurisdiction, anexpansion towhich thisCourthasnotconsented.IndiscriminateenactmentoflegislationenlargingtheappellatejurisdictionofthisCourtwouldunnecessarilyburdenit.

Second, when the Supreme Court, in the exercise of its rulemaking power,transferstotheCApendingcasesinvolvingareviewofaquasijudicialbodysdecisions,suchtransferrelatesonlytoprocedurehence,itdoesnotimpairthesubstantiveandvestedrightsoftheparties.Theaggrievedpartysrighttoappealispreservedwhatischangedisonlytheprocedurebywhichtheappealistobemadeordecided.Thepartiesstillhavearemedyandacompetenttribunaltograntthisremedy.

Third,theRevisedRulesofCivilProcedureincludedRule43toprovideauniform

ruleonappealsfromquasijudicialagencies.Undertherule,appealsfromtheirjudgmentsandfinalordersarenowrequiredtobebroughttotheCAonaverifiedpetitionforreview.Aquasijudicialagencyorbodyhasbeendefinedasanorganofgovernment,otherthanacourtorlegislature,whichaffectstherightsofprivatepartiesthrougheitheradjudicationor rulemaking.MABfallsunder thisdefinitionhence, it isnodifferent from theotherquasijudicial bodies enumerated under Rule 43. Besides, the introductory words inSection 1 of Circular No. 191among these agencies areindicate that theenumerationisnotexclusiveorconclusiveandacknowledgetheexistenceofotherquasijudicialagencieswhich,thoughnotexpresslylisted,shouldbedeemedincludedtherein.

Fourth,theCourtrealizesthatunderBatasPambansa(BP)Blg.129asamendedby

RA No. 7902, factual controversies are usually involved in decisions of quasijudicialbodiesandtheCA,whichislikewisetaskedtoresolvequestionsoffact,hasmoreelbowroomtoresolvethem.ByincludingquestionsoffactamongtheissuesthatmayberaisedinanappealfromquasijudicialagenciestotheCA,Section3ofRevisedAdministrativeCircularNo.195andSection3ofRule43explicitlyexpandedthelistofsuchissues.

AccordingtoSection3ofRule43,[a]nappealunder thisRulemaybetakento

theCourt ofAppealswithin the period and in themanner herein providedwhether theappeal involves questions of fact, of law, ormixed questions of fact and law. Hence,appealsfromquasijudicialagenciesevenonlyonquestionsoflawmaybebroughttotheCA.

Fifth, the judicial policy of observing the hierarchy of courts dictates that direct

resortfromadministrativeagenciestothisCourtwillnotbeentertained,unlesstheredressdesiredcannotbeobtainedfromtheappropriatelowertribunals,orunlessexceptionalandcompellingcircumstancesjustifyavailmentofaremedyfallingwithinandcallingforthe

exerciseofourprimaryjurisdiction.[14]

The above principle was reiterated inAsaphil Construction andDevelopment

Corporationv.Tuason,Jr.(Asaphil).[15]

However,theCarpiorulingwasnotappliedtoAsaphil as the petition in the latter case was filed in 1999 or three years before thepromulgationofCarpioin2002.Here,thepetitionwasfiledonApril28,2004whentheCarpiodecisionwasalreadyapplicable, thusBenguet shouldhave filed theappealwiththeCA.

PetitionerhavingfailedtoproperlyappealtotheCAunderRule43,thedecisionoftheMABhasbecomefinalandexecutory.Onthisgroundalone,theinstantpetitionmustbedenied.

EvenifweentertainthepetitionalthoughBenguetskirtedtheappealtotheCAvia

Rule 43, still, the December 2, 2002 Decision and March 17, 2004 Resolution of theDENRMABinMABCaseNo.012401shouldbemaintained.

FirstIssue:Thecaseshouldhavefirstbeenbroughtto

voluntaryarbitrationbeforethePOA

Secs.11.01and11.02oftheRAWOPpertinentlyprovide:11.01ArbitrationAnydisputes,differencesordisagreementsbetweenBENGUETandtheOWNERwith reference to anything whatsoever pertaining to this Agreement that cannot beamicablysettledbythemshallnotbecauseofanyactionofanykindwhatsoeverinanycourtoradministrativeagencybutshall,uponnoticeofonepartytotheother,bereferredto a Board of Arbitrators consisting of three (3) members, one to be selected byBENGUET, another to be selected by theOWNER and the third to be selected by theaforementionedtwoarbitratorssoappointed.xxxx11.02CourtActionNoactionshallbeinstitutedincourtastoanymatterindisputeashereinabove

stated,excepttoenforcethedecisionofthemajorityoftheArbitrators.[16]

Thus,BenguetarguesthatthePOAshouldhavefirstreferredthecasetovoluntaryarbitrationbeforetakingcognizanceofthecase,citingSec.2ofRA876onpersonsandmatterssubjecttoarbitration.Ontheotherhand,indenyingsuchargument,thePOAruledthat:

Whilethepartiesmayestablishsuchstipulationsclauses,termsandconditionsastheymaydeemconvenient,thesamemustnotbecontrarytolawandpublicpolicy.Ataglance,thereisnothingwrongwiththetermsandconditionsoftheagreement.Buttostatethat an aggrieved party cannot initiate an action without going to arbitration would be

tyingoneshandevenifthereisalawwhichallowshimtodoso.[17]

TheMAB,meanwhile,deniedBenguets contentionon thegroundof estoppel,stating:

Besides,byitsownact,Benguetisalreadyestoppedinquestioningthejurisdictionof the Panel ofArbitrators to hear and decide the case.As pointed out in the appealedDecision,Benguet initiatedandfiledanAdverseClaimdocketedasMACRM200002overthesameminingclaimswithoutundergoingcontractualarbitration.Inthisparticularcase(MACRM200002)nowsubjectoftheappeal,BenguetislikewiseinestoppelfromquestioningthecompetenceofthePanelofArbitratorstohearanddecideinthesummaryproceedings J.G. Realtys petition, when Benguet itself did not merely move for thedismissal of the case but also filed an Answer with counterclaim seeking affirmative

reliefsfromthePanelofArbitrators.[18]

Moreover, theMAB ruled that the contractual provision on arbitrationmerelyprovidesforanadditionalforumorvenueanddoesnotdivestthePOAofthejurisdiction

tohearthecase.[19]

InitsJuly20,2004Comment,[20]

J.G.RealtyreiteratedtheaboverulingsofthePOA andMAB. It argued that RA 7942 or the PhilippineMining Act of 1995 is aspecial lawwhich should prevail over the stipulations of the parties and over a generallaw,suchasRA876.ItalsoarguedthatthePOAcannotbeconsideredasacourtunderthecontemplationofRA876andthatjurisprudencesayingthattheremustbepriorresorttoarbitrationbeforefilingacasewiththecourtsisinapplicabletotheinstantcaseasthePOAisitselfalreadyengagedinarbitration.

Onthisissue,weruleforBenguet.Sec.2ofRA876elucidatesthescopeofarbitration:

Section2.Personsandmatterssubjecttoarbitration.Twoormorepersonsor

partiesmay submit to the arbitration of one ormore arbitrators any controversyexistingbetweenthematthetimeofthesubmissionandwhichmaybethesubjectofan action, or the parties to any contract may in such contract agree to settle byarbitration a controversy thereafter arising between them. Such submission orcontractshallbevalid,enforceableandirrevocable,saveuponsuchgroundsasexistatlawfortherevocationofanycontract.

Such submission or contract may include question[s] arising out of valuations,

appraisals or other controversies which may be collateral, incidental, precedent orsubsequenttoanyissuebetweentheparties.(Emphasissupplied.)

InRA9285or theAlternativeDisputeResolutionActof2004, theCongressreiteratedtheefficacyofarbitrationasanalternativemodeofdisputeresolutionbystatinginSec.32thereofthatdomesticarbitrationshallstillbegovernedbyRA876.Clearly,acontractualstipulationthatrequirespriorresorttovoluntaryarbitrationbeforethepartiescangodirectlytocourtisnotillegalandisinfactpromotedbytheState.Thus,petitionercorrectlycitesseveralcaseswherebyarbitrationclauseshavebeenupheldbythisCourt.

[21]

Moreover,thecontentionthatRA7942prevailsoverRA876presupposesaconflictbetween the two laws. Such is not the case here. To reiterate, availment of voluntaryarbitrationbeforeresortismadetothecourtsorquasijudicialagenciesofthegovernmentisavalidcontractualstipulationthatmustbeadheredtobytheparties.AsstatedinSecs.6and7ofRA876:

Section 6. Hearing by court.A party aggrieved by the failure, neglect or

refusal of another to perform under an agreement in writing providing forarbitration may petition the court for an order directing that such arbitrationproceedinthemannerprovidedforinsuchagreement.Fivedaysnoticeinwritingofthehearingofsuchapplicationshallbeservedeitherpersonallyorbyregisteredmailuponthepartyindefault.Thecourtshallheartheparties,anduponbeingsatisfiedthatthemaking of the agreement or such failure to comply therewith is not in issue, shallmakeanorderdirectingthepartiestoproceedtoarbitrationinaccordancewiththeterms of the agreement. If themaking of the agreement or default be in issue thecourtshallproceedtosummarilyhearsuchissue.Ifthefindingbethatnoagreementin writing providing for arbitration was made, or that there is no default in theproceeding thereunder, the proceeding shall be dismissed. If the finding be that awritten provision for arbitration was made and there is a default in proceedingthereunder,anordershallbemadesummarilydirectingthepartiestoproceedwiththearbitrationinaccordancewiththetermsthereof.

xxxxSection7.Stayofcivilaction.Ifanysuitorproceedingbebroughtuponanissue

arisingoutofanagreementprovidingforthearbitrationthereof, thecourtinwhichsuchsuitorproceedingispending,uponbeingsatisfiedthattheissueinvolvedinsuchsuitorproceedingisreferabletoarbitration,shallstaytheactionorproceedinguntilanarbitrationhasbeenhadinaccordancewiththetermsoftheagreement:Provided,Thattheapplicant,forthestayisnotindefaultinproceedingwithsucharbitration.(Emphasissupplied.)

Inotherwords,intheeventacasethatshouldproperlybethesubjectofvoluntaryarbitrationiserroneouslyfiledwiththecourtsorquasijudicialagencies,onmotionofthedefendant, the court or quasijudicial agency shall determine whether such contractualprovision for arbitration is sufficient and effective. If in affirmative, the court or quasijudicial agency shall then order the enforcement of said provision. Besides, in BFCorporationv.CourtofAppeals,wealreadyruled:

Inthisconnection,itbearsstressingthatthelowercourthasnotlostitsjurisdiction

overthecase.Section7ofRepublicActNo.876providesthatproceedingsthereinhave

only been stayed. After the special proceeding of arbitration has been pursued and

completed,thenthelowercourtmayconfirmtheawardmadebythearbitrator.[22]

J.G.Realtyscontention,thatpriorresorttoarbitrationisunavailingintheinstantcasebecausethePOAsmandateistoarbitratedisputesinvolvingmineralagreements,ismisplaced.Adistinctionmustbemadebetweenvoluntaryandcompulsoryarbitration.InLudo and Luym Corporation v. Saordino, the Court had the occasion to distinguishbetweenthetwotypesofarbitrations:

Comparatively, inReformistUnionofR.B.Liner, Inc.vs.NLRC, compulsory arbitrationhas been defined both as the process of settlement of labor disputes by agovernmentagencywhichhastheauthoritytoinvestigateandtomakeanawardwhichisbindingonall theparties,andasamodeofarbitrationwherethepartiesarecompelledtoacceptthe resolution of their dispute through arbitration by a third party.While a voluntaryarbitrator isnotpartofthegovernmentalunitorlabordepartmentspersonnel, said

arbitrator renders arbitration services provided for under labor laws.[23]

(Emphasissupplied.)

There is a clear distinction between compulsory andvoluntary arbitration.Thearbitration provided by the POA is compulsory, while the nature of the arbitrationprovisionintheRAWOPisvoluntary,notinvolvinganygovernmentagency.Thus,J.G.Realtysargumentonthismattermustfail. AstoJ.G.RealtyscontentionthattheprovisionsofRA876cannotapplytotheinstantcasewhichinvolvesanadministrativeagency,itmustbepointedoutthatSection11.01oftheRAWOPstatesthat:

[Anycontroversywithregardtothecontract]shallnotbecauseofanyactionofanykindwhatsoeverinanycourtoradministrativeagencybutshall,uponnoticeofonepartyto theother,bereferredtoaBoardofArbitratorsconsistingof three(3)members,onetobeselectedbyBENGUET,anothertobeselectedbytheOWNERandthethirdto

beselectedbytheaforementionedtwoarbiterssoappointed.[24]

(Emphasissupplied.)TherecanbenoquibblingthatPOAisaquasijudicialbodywhichformspartoftheDENR,anadministrativeagency.Hence,theprovisiononmandatoryresorttoarbitration,

freelyenteredintobytheparties,mustbeheldbindingagainstthem.[25]

Insum,ontheissueofwhetherPOAshouldhavereferredthecasetovoluntaryarbitration, we find that, indeed, POA has no jurisdiction over the dispute which isgovernedbyRA876,thearbitrationlaw. However,wefindthatBenguet isalreadyestoppedfromquestioningthePOAsjurisdiction.Asitwere,whenJ.G.RealtyfiledDENRCaseNo.200001,BenguetfileditsanswerandparticipatedintheproceedingsbeforethePOA,RegionV.Secondly,whentheadverseMarch19,2001POADecisionwasrendered,itfiledanappealwiththeMABin Mines Administrative Case No. RM200001 and again participated in the MABproceedings.When the adverse December 2, 2002MABDecision was promulgated, itfiled a motion for reconsideration with theMAB. When the adverseMarch 17, 2004MABResolutionwasissued,BenguetfiledapetitionwiththisCourtpursuanttoSec.79ofRA7942 impliedly recognizingMABs jurisdiction. In this factualmilieu, theCourtrules that the jurisdiction of POA and that of MAB can no longer be questioned byBenguetatthislatehour.WhatBenguetshouldhavedonewastoimmediatelychallengethePOAsjurisdictionbyaspecialcivilactionforcertiorariwhenPOAruledthatithasjurisdictionoverthedispute.ToredotheproceedingsfullyparticipatedinbythepartiesafterthelapseofsevenyearsfromdateofinstitutionoftheoriginalactionwiththePOAwouldbeanathematothespeedyandefficientadministrationofjustice.

SecondIssue:ThecancellationoftheRAWOPwassupportedbyevidence

The cancellation of the RAWOP by the POA was based on two grounds: (1)

BenguetsfailuretopayJ.G.Realtysroyaltiesfortheminingclaimsand(2)BenguetsfailuretoseriouslypursueMPSAApplicationNo.APSAV0009overtheminingclaims.

As to the royalties,Benguet claims that the checks representingpayments for theroyaltiesof J.G.Realtywereavailable forpickup in itsofficeand it is the latterwhichrefusedtoclaimthem.BenguetthenthusconcludesthatitdidnotviolatetheRAWOPfornonpayment of royalties. Further, Benguet reasons that J.G. Realty has the burden ofproving that the former did not pay such royalties following the principle that thecomplainantsmustprovetheiraffirmativeallegations.

WithregardtothefailuretopursuetheMPSAapplication,Benguetclaimsthatthe

lengthytimeofapprovaloftheapplicationisduetothefailureoftheMGBtoapproveit.Inotherwords,BenguetarguesthattheapprovaloftheapplicationissolelyinthehandsoftheMGB.

Benguetsargumentsarebereftofmerit.Sec.14.05oftheRAWOPprovides:14.05BankAccountOWNERshallmaintainabankaccountat___________oranyotherbankfromtimetotimeselectedbyOWNERwithnoticeinwritingtoBENGUETwhereBENGUETshall deposit to the OWNERs credit any and all advances and payments which maybecomeduetheOWNERunderthisAgreementaswellasthepurchasepricehereinagreeduponintheeventthatBENGUETshallexercisetheoptiontopurchaseprovidedforintheAgreement.AnyandalldepositssomadebyBENGUETshallbeafullandcompleteacquittanceandreleaseto[sic]BENGUETfromanyfurtherliabilitytotheOWNERoftheamountsrepresentedbysuchdeposits.(Emphasissupplied.)

Evidently,theRAWOPitselfprovidesforthemodeofroyaltypaymentbyBenguet.The fact that therewas thepreviouspracticewhereby J.G.Realtypickedup the checksfromBenguetisunavailing.Themodeofpaymentisembodiedinacontractbetweentheparties. As such, the contract must be considered as the law between the parties and

bindingonboth.[26]

Thus,afterJ.G.RealtyinformedBenguetofthebankaccountwheredepositsof its royaltiesmaybemade,Benguethad theobligation todeposit thechecks.J.G.RealtyhadnoobligationtofurnishBenguetwithaBoardResolutionconsideringthattheRAWOPitselfprovidedforsuchpaymentscheme.

Notably,BenguetsclaimthatJ.G.Realtymustprovenonpaymentofitsroyaltiesisbothillogicalandunsupportedbylawandjurisprudence.

The allegationof nonpayment is not a positive allegation as claimedbyBenguet.

Rather,such isanegativeallegation thatdoesnot requireproofand in fact transfers theburdenofprooftoBenguet.Thus,thisCourtruledinJimenezv.NationalLaborRelations

Commission:As a general rule, one who pleads payment has the burden of proving it. Even

wheretheplaintiffmustallegenonpayment,thegeneralruleisthattheburdenrestsonthedefendant to prove payment, rather than on the plaintiff to prove nonpayment. Thedebtorhas theburdenof showingwith legal certainty that the obligationhasbeen

dischargedbypayment.[27]

(Emphasissupplied.)

Intheinstantcase,theobligationofBenguettopayroyaltiestoJ.G.RealtyhasbeenadmittedandsupportedbytheprovisionsoftheRAWOP.Thus,theburdentoprovesuchobligationrestsonBenguet.ItshouldalsobeborneinmindthatMPSAApplicationNo.APSAV0009hasbeenpending with the MGB for a considerable length of time. Benguet, in the RAWOP,obligated itself to perfect the rights to the mining claims and/or otherwise acquire themining rights to the mineral claims but failed to present any evidence showing that itexertedeffortstospeedupandhavetheapplicationapproved.Infact,BenguetneverevenallegedthatitcontinuouslyfolloweduptheapplicationwiththeMGBandthatitwasinconstantcommunicationwiththegovernmentagencyfortheexpeditiousresolutionoftheapplication.Suchallegationswouldshowthat,indeed,BenguetwasremissinprosecutingtheMPSAapplicationandclearlyfailedtocomplywithitsobligationintheRAWOP.

ThirdIssue:ThereisnounjustenrichmentintheinstantcaseBasedontheforegoingdiscussion,thecancellationoftheRAWOPwasbasedonvalidgroundsandis,therefore,justified.ThenecessaryimplicationofthecancellationisthecessationofBenguetsrighttoprosecuteMPSAApplicationNo.APSAV0009andtofurtherdevelopsuchminingclaims. InCarCoolPhilippines,Inc.v.UshioRealtyandDevelopmentCorporation,wedefinedunjustenrichment,asfollows:

Wehaveheldthat[t]hereisunjustenrichmentwhenapersonunjustly retainsa

benefit to the loss of another, or when a person retains money or property of anotheragainst thefundamentalprinciplesof justice,equityandgoodconscience.Article22ofthe Civil Code provides that [e]very person who through an act of performance by

another, or any other means, acquires or comes into possession of something at theexpense of the latter without just or legal ground, shall return the same to him. TheprincipleofunjustenrichmentunderArticle22requirestwoconditions:(1)thatapersonisbenefited without a valid basis or justification, and (2) that such benefit is derived atanothersexpenseordamage.

There isnounjust enrichmentwhen thepersonwhowillbenefithasavalid

claimtosuchbenefit.[28]

(Emphasissupplied.)

Clearly,thereisnounjustenrichmentintheinstantcaseasthecancellationoftheRAWOP,which leftBenguetwithoutany legal right toparticipate infurtherdevelopingtheminingclaims,wasbroughtaboutbyitsviolationoftheRAWOP.Hence,Benguethasnoonetoblamebutitselfforitspredicament.WHEREFORE,weDISMISSthepetition,andAFFIRMtheDecember2,2002DecisionandMarch17,2004ResolutionoftheDENRMABinMABCaseNo.012401upholdingthecancellationoftheJune1,1987RAWOP.Nocosts.SOORDERED.

PRESBITEROJ.VELASCO,JR.AssociateJustice

WECONCUR:

LEONARDOA.QUISUMBINGAssociateJustice

ChairpersonANTONIOT.CARPIOCONCHITACARPIOMORALESAssociateJusticeAssociateJustice