Our courts are basically courts of law, not courts of equity.[314]Furthermore, for all its conceded merits, equity is available only in the absence of law and not as its replacement.[315] As explained in the old case of Tupas v. Court of Appeals:[316]
Equity is described as justice outside legality, which simply means that it cannot supplant although it may, as often happens, supplement the law. We said in an earlier case, and we repeat it now, that all abstract arguments based only on equity should yield to positive rules, which preempt and prevail over such persuasions. Emotional appeals for justice, while they may wring the heart of the Court, cannot justify disregard of the mandate of the law as long as it remains in force. The applicable maxim, which goes back to the ancient days of the Roman jurists - and is now still reverently observed - is "aequetas nunquam contravenit legis."[317]In this case, there are applicable laws found in Section 7, Article X of the 1987 Constitution and in Sections 289 and 290 of the Local Government Code. They limit the LGUs' share to the utilization of national wealth located within their respective areas or territorial jurisdiction. As herein before-discussed, however, existing laws do not include the Camago-Malampaya reservoir within the area or territorial jurisdiction of the Province of Palawan.
The pertinent positive rules being present here, they should preempt and prevail over all abstract arguments based only on equity.[318]
The supposed presence of gas pipes through the northern part of Palawan cannot justify granting the province the 40% LGU share because both the Constitution and the Local Government Code refer to the LGU where the natural resource is situated. The 1986 Constitutional Commission referred to this area as "the locality, where God chose to locate his bounty," while the Senate deliberations on the proposed Local Government Code cited it as the area where the natural resource is "extracted." To hold otherwise, on the basis of equity, will run afoul of the letter and spirit of both constitutional and statutory law. It is settled that equity cannot supplant, overrule or transgress existing law.
Furthermore, as the Republic noted, any possible environmental damage to the province is addressed by the contractor's undertakings, under the ECC, to ensure minimal impact on the environment and to set up an Environmental Guarantee Fund that would cover expenses for environmental monitoring, as well as a replenishable fund that would compensate for any damage the project may cause.
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Contrary to the Republic's submission, the LGU's share under Section 7, Article X of the 1987 Constitution cannot be denied on the basis of the archipelagic and regalian doctrines.
The archipelagic doctrine is embodied m Article I of the 1987 Constitution which provides:
The national territory comprises the Philippine archipelago, with all the islands and waters embraced therein, and all other territories over which the Philippines has sovereignty or jurisdiction, consisting of its terrestrial, fluvial, and aerial domains, including its territorial sea, the seabed, the subsoil, the insular shelves, and other submarine areas. The waters around, between, and connecting the islands of the archipelago, regardless of their breadth and dimensions, form part of the internal waters of the Philippines.The regalian doctrine, in turn, is found in Section 2, Article XII of the 1987 Constitution which states:
Section 2. 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. x x xIt is at once evident that the foregoing doctrines find no application in this case which involves neither a question of what comprises the Philippine territory or the ownership of all natural resources found therein.
There is no debate that the natural resources in the Camago-Malampaya reservoir belong to the State. Palawan's claim is anchored not on ownership of the reservoir but on a revenue-sharing scheme, under Section 7, Article X of the 1987 Constitution and Section 290 of the Local Government Code, that allows LGUs to share in the proceeds of the utilization of national wealth provided they are found within their respective areas. To deny the LGU's share on the basis of the State's ownership of all natural resources is to render Section 7 of Article X nugatory for in such case, it will not be possible for any LGU to benefit from the utilization of national wealth.
Accordingly, the Court cannot subscribe to Atty. Bensurto's opinion[306] that the Province of Palawan cannot claim the 40% LGU share from the proceeds of the Camago-Malampaya project because the National Government "remains to have full dominium" (or ownership rights) over the gas reservoir.
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