A bank acquired a large tract of land as the highest bidder in the foreclosure sale of the mortgaged assets of its borrower. It appears that the land has been originally registered under the Torrens system in 1922 pursuant to the provisions of the Philippine Bill of 1902, the organic act of the Philippine Islands as a colony of the USA. Sec. 21 of the Philippine Bill of 1902 provided that “all valuable mineral deposits in public lands in the Philippine Islands, both surveyed and unsurveyed, are hereby declared to be free and open to exploration, occupation and purchase, and the land in which they are found to occupation and purchase, by citizens of the United States, or of said Islands.” Sec. 27 of the law declared that a holder of the mineral claim so located was entitled to all the minerals that lie within his claim, but he could not mine outside the boundary lines of his claim.
The 1935 Constitution expressly prohibited the alienation of natural resources except agricultural lands. Sec. 2, Art. XII of the 1987 Constitution contains a similar prohibition, and proclaims that all lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. This provision enunciates the Regalian Doctrine.
May the Government, on the basis of the Regalian Doctrine enunciated in the constitutional provisions, deny the bank its right as owner to the mineral resources underneath the surface of its property as recognized under the Philippine Bill of 1902? Explain your answer. (5%)
Under jurisprudence, mining rights acquired under the Philippine Bill of 1902 and prior to the effectivity of the 1935 Constitution were vested rights that could not be impaired even by the Government. Further, the due process clause prohibits the annihilation of vested rights. Rule
In the case at bar, the bank acquired the large tract of land from the previous owner who acquired the land under the provisions of Philippine Bill of 1902. Accordingly, as a successor-in-interest, the rights of the previous owner transferred to the bank as the new owner. These are already vested rights that are protected by the due process clause of the 1987 Constitution. Apply
Thus, the Government may not deny the bank its right as owner to the mineral resources. Conclusion