ATLAS CONSOLIDATED MINING & DEVELOPMENT CORPORATION, petitioner, vs.

THE HONORABLE
COURT OF APPEALS, MALAYAN INTEGRATED INDUSTRIES CORPORATION, BIGA COPPER MINES
EXPLORATION COMPANY, PABLO B. GOROSIN, FRANCISCO B. GOROSIN, HEIR S OF PEDRO B. GOROSIN
and VICENTE T. GARAYGAY, respondents.

Justice Gancayco – 1st Division

“Adjudication of mining cases a purely administrative matter.”

Facts: ATLAS entered into an agreement with Cuenco and Velez granting ATLAS right to explore, develop
and operate 12 mining claims in exchange of royalties. ATLAS then entered into a same agreement with
BIGA Copper. 9 of the mining claims from Cuenzo-Velez and Biga Copper overlap and therein became
the subject of Mines administrative cases. Director of Mines resolved in favor of Cuenzo-Velez and it was
appealed with the Office of the President. During said appeal, Cuenzo-Velez and Biga Copper entered
into a compromise agreement which enabled Biga Copper to eventually lay claim over the 9 overlapping
mining claims. ATLAS then received numerous letters from 3rd parties that were assignees of Biga
Copper and Biga Partners over mining claims. The latter wants ATLAS to give them corresponding
royalties from the mining operation. ATLAS instituted declaratory relief since they found that BIGA
indeed sold their shares to third parties whilst Escano, an assignee with respect to the 3 mining claims of
Cuenco-Velez, which he himself alleges that Cuenco-Velez assigned him 50% of their shares but Cuenzo-
Velez denies since Escano failed to fulfill conditions. ATLAS then filed Declaratory Relief vs BIGA and
Cuenco-velez. Operating Agreement of ATLAS and BIGA has been revoked because trial court has lost
jurisdiction because of PD 1281. Sec 7 paragraph a and c and section 12. ATLAS argued that BIGA has no
right to unilaterally cancel agreement. Trial court averred that they have jurisdiction since the
controversy is a judicial pronouncement of obligations, Action from annulment of the OA filed by bureau
of mines is not identical with petition for declaratory relief. CA REVERSED.

Issue: WON the Trial court has jurisdiction? (NO)

Held: Declaratory is used to terminate uncertainties in an instrument or statute for persons of interest.
It cannot be disputed that ATLAS, being one of the parties to the operating agreements, has an interest
therein. A review of the record, in fact, reveals that ATLAS purports to be seeking a judicial
interpretation of its operating agreements with BIGA COPPER and CUENCO-VELEZ. But after evaluating
the lengthy arguments it presented to justify the declaratory action, this Court arrives at one logical
conclusion — the ambiguity is not in the operating agreements themselves but in the validity of the
assignments of mining rights made by BIGA COPPER and CUENCO-VELEZ to third parties. Obviously,
these third parties are not part of ATLAS' contract with either BIGA COPPER or CUENCO-VELEZ. In the
same vein, neither is ATLAS a party to the deeds of assignments executed by BIGA COPPER or CUENCO-
VELEZ. While this Court may concede that as a result of the numerous assignments made by both BIGA
COPPER and CUENCO-VELEZ, ATLAS is left in a quandary as to whom to pay the royalties in the course of
its mining operations, legally speaking however, the ambiguity or uncertainty is not of the character as
to call for the procedural remedy of a declaratory action — ATLAS not being a party to the said deeds of
assignment.

PD 1281 is a Decree which facilitates the immediate resolution of mining controversies by

granting jurisdiction to a body or agency more adept to the technical complexities of mining operations.
The inevitable conclusion is that the operative act which divested the trial court of jurisdiction to decide
the declaratory action is not respondents' act of filing an administrative suit for the cancellation of their
operating agreement with ATLAS. With or without such administrative action, the trial court is deemed
to have lost jurisdiction to proceed with the declaratory action immediately upon the effectivity of
Presidential Decree No. 1281 on January 16, 1978 .