April 2016 - Philippine Supreme Court Decisions/Resolutions
Philippine Supreme Court Jurisprudence
G.R. No. 174333, April 20, 2016 - PILIPINAS SHELL FOUNDATION, INC. AND SHELL PHILIPPINES EXPLORATION B.V., Petitioners, v. TOMAS M. FREDELUCES, MARCOS B. CORPUZ, JR., REYNALDO M. SAMONTE, NORMA M. SAMONTE, AMBROCIO VILLANUEVA, SALVACION A. BON, RAMIRO A. BON, LUZVIMINDA B. ANDILLO, LUDIVICO F. BON, ELMO AREGLO, ROSE A. SAN PEDRO, DANTE U. SANTOS, SR., MIGUEL SANTOS, EFREN U. SANTOS, RIC U. SANTOS, SIMON MARCE, JR., JOEL F. SALINEL, BEBIANA SAN PEDRO, AND MARINA SANTOS, Respondents.
SECOND DIVISION
G.R. No. 174333, April 20, 2016
PILIPINAS SHELL FOUNDATION, INC. AND SHELL PHILIPPINES EXPLORATION B.V., Petitioners, v. TOMAS M. FREDELUCES, MARCOS B. CORPUZ, JR., REYNALDO M. SAMONTE, NORMA M. SAMONTE, AMBROCIO VILLANUEVA, SALVACION A. BON, RAMIRO A. BON, LUZVIMINDA B. ANDILLO, LUDIVICO F. BON, ELMO AREGLO, ROSE A. SAN PEDRO, DANTE U. SANTOS, SR., MIGUEL SANTOS, EFREN U. SANTOS, RIC U. SANTOS, SIMON MARCE, JR., JOEL F. SALINEL, BEBIANA SAN PEDRO, AND MARINA SANTOS, Respondents.
D E C I S I O N
LEONEN, J.:
When a motion to dismiss is filed, only allegations of ultimate facts are hypothetically admitted. Allegations of evidentiary facts and conclusions of law, as well as allegations whose falsity is subject to judicial notice, those which are legally impossible, inadmissible in evidence, or unfounded, are disregarded.
This resolves a Petition for Review on Certiorari1 assailing the Court of Appeals Decision2 and Resolution3 in CA-G.R. CV No. 74791. Except for respondent Tomas M. Fredeluces, the Court of Appeals reinstated the Complaint4 for damages filed by respondents Marcos B. Corpuz, Jr., Reynaldo M. Samonte, Norma M. Samonte, Ambrocio Villanueva, Salvacion A. Bon, Ramiro A. Bon, Luzviminda B. Andillo, Ludivico F. Bon, Elmo Areglo, Rose A. San Pedro, Dante U. Santos, Sr., Miguel Santos, Efren U. Santos, Ric U. Santos, Simon Marce, Jr., Joel F. Salinel, Bebiana San Pedro, and Marina Santos against petitioners Pilipinas Shell Foundation, Inc. and Shell Philippines Exploration B.V.5 The Court of Appeals remanded the case to Branch 72 of the Regional Trial Court of Olongapo City, which had earlier dismissed the Complaint for damages on the grounds of litis pendentia, failure to state a cause of action, and lack of cause of action.6
With respect to Tomas M. Fredeluces, the Court of Appeals affirmed the dismissal of the Complaint on the ground of lack of cause of action.7
Pursuant to Presidential Decree No. 87, otherwise known as the Oil Exploration and Development Act of 1972, the Republic of the Philippines entered into Service Contract No. 38 and engaged the services of Shell Philippines Exploration B.V. "for the exploration, development[,] and production of petroleum resources in an . . . area offshore northwest of . . . Palawan[.]"8 The service contractors eventually discovered in offshore Malampaya-Camago at least 2.5 trillion cubic feet of natural gas deposits.9
Exploration and development of the Malampaya-Camago natural gas reservoir required the construction and operation of a shallow water platform off the coast of Palawan. The water platform further required a concrete gravity structure that would sit on the seabed, and a topside or the platform's deck which would sit on top of the concrete gravity structure.10
The topside was constructed in Singapore. As for the concrete gravity structure, Shell Philippines Exploration B.V. searched for possible construction sites here in the Philippines. Subsequently identified as a possible construction site was Subic, Zambales, and Shell Philippines Exploration B.V. met with representatives of the Subic Bay Metropolitan Authority.11
The Subic Bay Metropolitan Authority proposed a 40-hectare site in Sitio Agusuhin as a possible construction site for the concrete gravity structure.12 The site formed part of the military reservation of the former naval base of the United States in Subic, which, under Republic Act No. 7227,13 became part of the Subic Special Economic Zone.14
Results of a socio-economic survey commissioned by Shell Philippines Exploration B.V. showed that there were about 200 households living at or near the proposed construction site. Together with the Subic Bay Metropolitan Authority and Pilipinas Shell Foundation, Inc., Shell Philippines Exploration B.V. established contact with the occupants of Sitio Agusuhin. It was ultimately determined that 80 households would have to be relocated to nearby areas within the Subic Seaport Economic Free Zone to carry out the project.15
In May 1998, the Subic Bay Metropolitan Authority and Shell Philippines Exploration B.V. entered into a Lease and Development Agreement for the construction of the concrete gravity structure in Sitio Agusuhin. The Subic Bay Metropolitan Authority undertook to relocate the affected households, while Shell Philippines Exploration B.V. undertook to give financial assistance to them.16
The undertakings of Shell Philippines Exploration B.V. were implemented through Pilipinas Shell Foundation, Inc. By the end of May 1998, Pilipinas Shell Foundation, Inc. concluded agreements with some of the affected households. In exchange for financial assistance, some of the claimants voluntarily dismantled their houses and relocated to nearby areas within the Subic Seaport Economic Free Zone. Other claims, however, were denied by Shell Philippines Exploration B.V. for the claimant's failure to show that he or she resided in Sitio Agusuhin prior to the construction project.17
With the assistance of the Subic Sangguniang Bayan, a Compensation Community Relations Study Group was organized to re-evaluate the claims that had been previously denied by Shell Philippines Exploration B.V.18 In the meantime, the construction of the concrete gravity structure was completed, and the shallow water platform was successfully installed in Palawan on June 2, 2000.19 Shell Philippines Exploration B.V. turned over Sitio Agusuhin to the Subic Bay Metropolitan Authority, cleared, leveled, and elevated, together with improvements "consisting of a finger pier, a fence and gate, a drainage system[,] and a berthing facility for ferry sea crafts or similar vessels along the southern bank of the basin."20
On December 1, 2000, a Complaint for damages was filed against Shell Philippines Exploration B.V. and Pilipinas Shell Foundation, Inc. before the Regional Trial Court of Olongapo City.21 Tomas M. Fredeluces, Marcos B. Corpuz, Jr., Reynaldo M. Samonte, Norma M. Samonte, Ambrocio Villanueva, Salvacion A. Bon, Ramiro A. Bon, Luzviminda B. Andillo, Ludivico F. Bon, Elmo Areglo, Rose A. San Pedro, Dante U. Santos, Sr., Miguel Santos, Efren U. Santos, Ric U. Santos, Simon Marce, Jr., Joel F. Salinel, Bebiana San Pedro, and Marina Santos (Fredeluces, et al.) alleged that having resided in the area even prior to 1998, they were lawful residents of Sitio Agusuhin.22 They allegedly constructed their houses and introduced improvements in Sitio Agusuhin, such as fruit trees and other seasonal plants.23
However, "[f]or the direct benefit of the defendants [Shell Philippines Exploration B.V. and Pilipinas Shell Foundation, Inc.],"24 Fredeluces, et al. were "effectively evicted"25 from their homes in "total disregard"26 of their rights. Admitting that some of the claimants were given financial assistance, Fredeluces, et al. alleged that the amounts given were "insufficient to compensate the damages they sustained[.]"27 Worse, they were allegedly "pressured, coerced or . . . 'sweet talked'"28 into signing quitclaims and waivers.
"In arbitrarily and unlawfully evicting [Fredeluces, et al.] from their place of abode and livelihood,"29 Shell Philippines Exploration B.V. and Pilipinas Shell Foundation, Inc. allegedly failed to act with justice, "did not give . . . [Fredeluces, et al.] their due[,] and acted in bad faith."30 The actions of Shell Philippines Exploration B.V. and Pilipinas Shell Foundation, Inc. were allegedly contrary to law, for which they should pay Fredeluces, et al. the following amounts representing actual damages:
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In addition to their allegations, Fredeluces, et al. moved that they be allowed to litigate as paupers considering that "[t]he gross income of each of [them] and the members of their [families] do not exceed P3,000.00[,]"32 and that none of them allegedly owned real property.33
1. Tomas Fredeluces P27,000,000.002. Marcos Corpuz, Jr. 905,000.003. Reynaldo Samonte 2,000,000.004. Norma Samonte 2,000,000.005. Ambrocio Villanueva 1,700,000.006. Salvacion Bon 750,000.007. Ramiro Bon 1,000,000.008. Luzviminda Andillo 500,000.009. Ludivico Bon 500,000.0010. Elmo Areglo 1,000,000.0011. Rose San Pedro 500,000.0012. Dante Santos, Sr., 12,000,000.0013. Miguel Santos 4,000,000.0014. Efren Santos 5,000,000.0015. Ric Santos 1,000,000.0016. Simon Marce, Jr. 4,000,000.0017. Joel Salinel (no amount)18. Bebiana San Pedro 1,500,000.0019. Marina Santos 3,000,000.00TOTAL P68,255,000.0031
Instead of answering the Complaint, Shell Philippines Exploration B.V. and Pilipinas Shell Foundation, Inc. moved to dismiss34 the complaint based on the grounds of litis pendentia, failure to state a cause of action, and lack of cause of action.35
Shell Philippines Exploration B.V. and Pilipinas Shell Foundation, Inc. alleged that five (5) of the plaintiffs