CASE DIGEST: Pheschem vs. Surigao

A.C. No. 8269 : December 11, 2013




Pheschem has been operating a limestone quarry in Palompon, Leyte on a 25-year mining permit since 1985. Toward the end of its said permit, it allegedly encountered harassment from the town officials when it tried to renew the same, although it also surmised that its troubles began after it refused passage through its quarry to the logging trucks owned by the Chairman of Barangay Liberty. The chairman retaliated by charging them 100 pesos per truck that entered the quarry site. When Pheschem refused to pay, the chairman blockaded the quarry site.

Pheschem sought the help of Atty. Surigao, then Vice-Mayor of Palompon, but instead of helping the former, Atty. Surigao joined the blockade. Not only that, in a dialogue he called between Pheschem and the barangayofficials, Atty. Surigao harangued Pheschem with a litany of complaints from the barangay residents.

On June 2, 2008, the Sangguniang Bayan of Palompon, allegedly upon instigation of Atty. Surigao, passed Municipal Resolution No. 068-020608, entitled, An Omnibus Opposition to Any and all Re-application ofPheschem Industrial Corporation for Mining Permit or License, or Issuance of an Environmental Compliance Certificate, or Business License, or Mayors Permit, Inter Alia. Then, on June 27, 2008 Atty. Surigao even appeared as collaborating counsel in a labor case for a dismissed employee of Pheschem. Pheschem now insists that Atty. Surigao should have inhibited himself from the Sangguniang Bayans deliberations on Resolution No. 068-020608 due to conflict of interest.

Unable now to haul limestone from its present quarry site, it opened a new quarry. But again, Atty. Surigaoand other town officials blocked and stopped its operations. Undaunted, Pheschem opened a third quarry, but the attorney and other officials seized two of Pheschems dump trucks. Also, the mayor claimed thatPheschem violated its environmental compliance certificate. The mayor also claimed that the permit was for quarrying rock asphalt, and not limestone which was the type of mineral in the new vicinity.

On November 25, 2008, Pheschem pleaded with Atty. Surigao to release its trucks, but Atty. Surigaoresponded by furnishing Pheschem with a copy of Municipal Resolution No. 170-211008, which urged the Mayors office to cancel Pheschems business operations and pay its workers separation pay.

Pheschem filed a TRO against the municipal officials. On December 8, 2008, the RTC issued a 72-hour TRO as well as commanded the respondent town officials to release Pheschems trucks and to stop obstructing its quarrying operations. The next day, the respondents filed a motion for reconsideration, but on December 22, 2008, the RTC went on to issue a writ of preliminary injunction against the municipal officials of Palompon, including herein respondents, to stop interfering in Pheschems quarry operations.

In apparent defiance of the above writ, on January 6, 2009 Atty. Surigao and several policemen, enteredPheschems quarry site and seized three (3) of its dump trucks. On January 9, 2009, Surigao sought to cancelPheschems provincial quarry permit. But in a Resolution dated March 20, 2009, the Office of the Provincial Governor of Leyte dismissed the complaint.

On January 13, 2009, the day Pheschem was to resume its operations at the San Miguel quarry site, it obtained the release of its equipment, but again on January 16, 2009, the trucks were impounded for the third time.

On May 11, 2009, Pheschem filed the instant disbarment complaint against herein respondents, for gross, malicious and oppressive violation of their duties under the Code of Professional Responsibility. Meanwhile, on July 22, 2009, the RTC issued a resolution to lift the blockade at Pheschems San Miguel quarry and to release the trucks and their accessories impounded by the municipal and police officers. Then on January 15, 2010, the RTC granted Pheschems motion to enforce its December 22, 2008 and July 22, 2009 orders. On February 5, 2010, the RTC denied therein respondents motion to inhibit as well as affirmed its Order dated January 15, 2010.

From the above orders, three certiorari petitions were filed in the Court of Appeals for the same causes of action.

Meanwhile, on January 5, 2011, the IBP commissioner issued her report and recommendation in A.C. No. 8269, wherein she recommended that the disbarment complaint against the respondents be dismissed for lack of merit

On July 21, 2012, the IBP Board of Governors issued Resolution No. XX-2012-308 adopting and approving the IBP commissioners report.

On October 12, 2012, Pheschem moved for reconsideration of the dismissal of its disbarment complaint.

On March 21, 2013, the IBP issued Resolution No. XX-2013-327 adopting IBP Governor Gerona-Romeos ruling to suspend the respondents for one month:

It was only on July 3, 2013 that the respondents received a copy of the IBP Resolution No. XX-2013-327 suspending them for one month from the practice of law. They forthwith filed a Manifestation with Motion for Reconsideration on July 11, 2013 wherein they reiterated, invoking the CA decision, that they were only genuinely motivated in their actuations against Pheschem to implement the environmental laws.

ISSUE: Whether or not respondents should be dismissed?

HELD: Disbarment complaint is dismissed.

We resolve to dismiss the complaint for disbarment against the respondents.

POLITICAL LAW: police power

The State, through the legislature, has delegated the exercise of police power to local government units, as agencies of the State, in order to effectively accomplish and carry out the declared objects of their creation. This delegation is embodied in the general welfare clause, Section 16, of R.A. No. 7160. Police power is essentially regulatory in nature, and the power to issue licenses or grant business permits, if exercised for a regulatory and not revenue-raising purpose, is within the ambit of this power. Consistent with this principle, the CA held in the aforesaid petitions that the quarry permit issued by the Governor of Leyte to Pheschem is contingent on its compliance with the terms and conditions of the ECC. Thus, the quarry permit cannot be said to have vested in Pheschem an absolute, unconditional right to quarry or to mine, such that if it fails to comply with any of the terms and conditions of the ECC, there would be no right to quarry or mine to speak of. The CA stressed that a license or permit is not a contract between the sovereign and the grantee, but a special privilege, a permission or authority to do what would be within its terms; that it is neither vested nor permanent that can at no time be withdrawn or taken back by the grantor.

The CA also cited Boracay Foundation, Inc. v. Province of Aklan, where it was held that although theSangguniang Barangay of Caticlan, Malay, Province of Aklan and the Sangguniang Bayan of the Municipality of Malay had passed resolutions favorably endorsing the project of the Province of Aklan to reclaim several hectares of foreshore land in Caticlan, Malay, the Province of Aklan must still comply with the terms and conditions contained in the said resolutions of the Sangguniang Barangay of Caticlan and Sangguniang Bayanof Malay. The Court invoked the duty of local governments to ensure the quality of the environment pursuant to Presidential Decree No. 1586, which established the Environmental Impact Statement System.

In Republic of the Philippines v. The City of Davao, invoked in Boracay, we affirmed that under Section 15 of R.A. No. 7160, a local government unit is endowed with powers to perform not just proprietary but also governmental functions which concern the health, safety and the advancement of the public good or welfare as affecting the public generally. The local government unit exercises governmental powers and performs governmental duties as an agency of the national government. Thus, in relation to Section 16 of R.A. No. 7160, Section 447 of the Local Government Code, which enumerates the powers, duties and functions of the municipality, grants the Sangguniang Bayan the power to, among other things, enact ordinances, approveresolutions and appropriate funds for the general welfare of the municipality and its inhabitants.

In the complaint before us, the Sangguniang Bayan of Palompon passed on June 2, 2008 Resolution No. 068-020608, wherein it manifested its opposition to any and all re -application by Pheschem for mining permit or license, or, issuance of an ECC, business permit, or mayors permit. Notwithstanding the same, on July 4, 2008, the DENR wrote the Sangguniang Bayan that although Pheschem could still re-apply for an ECC as long as it substantially complied with the pertinent requirements, they wish to emphasize that the nature of ECC is not a permit but more of a planning tool. As such, it does not exempt the proponent from securing other permits/clearances from other Government Agencies including LGUs. Instead, it may serve as guide for other GAs or LGUs whether or not to issue their respective permits and/or clearances. The DENR-EMB also assured Atty. Surigao that they fully respect his actions in manning his municipality including the granting or denial of Business and/or Mayors permit to anyone.

Also, the Court noted Pheschems violations of the permits and ECCs. The permits they possessed were for mining rock asphalt and not limestone. Also, the municipal councils certification disclose that the sitesPheschem used were not mining areas but residential zones. Also, another location has been declared as a forest reserve. Lastly, in addition to the violations by Pheschem of the terms and conditions of the ECC and quarry permit, the respondents alleged that its Mining Lease Agreement and quarry permit have expired, and there is no showing that they have been renewed.

In conclusion, rather than this Court penalizing the respondents for their supposed abusive and arbitrary actuations not befitting the moral character required of members of the bar, there is ample showing that their conduct was pursuant to the diligent performance of their sworn duties and responsibilities as duly elected officials of the Municipality of Palompon, Leyte. They therefore deserve commendation, instead of condemnation, and not just commendation but even encouragement, for their vigilance and prompt and decisive actions in helping to protect and preserve the environment and natural resources of their Municipality.