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G.R. No. 92605 July 16, 1991

APEX MINING CO., INC., MT., DIWATA EXPLORATION AND MINING CORPORATION,
CAMILO BANAD, PRUDENCIO SUAREZ, AURORA SUAREZ, RODOLFO BOLO, LEONILA
VILLAFLOR, MAURICIA AMACIO, ANITA BITAGAN, APOLINARIO CANETE, ORLANDO
CASTILLO, PAUL GALICIA, and ROSARY V. GALICIA, petitioners,
vs.
HONORABLE CANCIO C. GARCIA ASSISTANT EXECUTIVE SECRETARY, OFFICE OF THE
PRESIDENT, HON. FULGENCIO S. FACTORAN, JR., SECRETARY OF ENVIRONMENT AND
NATURAL RESOURCES, and MARCOPPER MINING CORPORATION, respondents.

Martin T. Lu for petitioner-intervenor.

Gozon, Fernandez, Defensor & Parel for Marcopper Mining Corp.

PARAS, J.:

This is a petition for certiorari with prayer for the issuance of a wit of preliminary injunction and/or
restraining order seeking to nullify and set aside the July 27, 1989 decision of the Office of the
President * in O.P. Case No. 3728 dismissing the appeal of Apex Mining Co., Inc. and affirming
the April 15, 1987 decision and January 14, 1988 order of the Department of Environment and
Natural Resources (DENR), respectively, declaring that the respective mining claims of Apex
Mining Co., Inc., et al., as well as Small Scale Mining Permits Nos. (X-1) 04 (X-1), 05, are null
and void and/or inoperative and the Permit to Explore No. 133 of Marcopper Mining Corporation
as valid and subsisting; and denying the motion for reconsideration.

The controversy in this case involves conflicting mining claims between herein petitioners Apex
Mining Co., Inc., et al. (Apex for short) and private respondent Marcopper Mining Corporation
(MARCOPPER for short). The disputed area is inside a timberland area located at Moncayo,
Davao del Norte and Cateel, Davao Oriental, consisting of 4,941.0 hectares (Rollo, p. 64).

MARCOPPER was one of the first mining claimants in the disputed area, having registered its 16
claims on January 19 and 20, 1984 through the filing of declarations of location pursuant to
Presidential Decree No. 463, otherwise known as the Mineral Resources Development Decree.
MARCOPPER, allegedly, after registering its mining claim, learned from the central office of the
Bureau of Forest Development (BFD) that the disputed area is within an existing forest
reservation known as the "Agusan-Davao-Surigao Forest Reserve" established by Proclamation
No. 369 on February 27, 1931 by then Governor General Dwight F. Davis, and realizing the
invalidity of its mining claims for having availed of a wrong procedure, abandoned its 16 mining
claims and applied for a prospecting permit instead with the BFD on April 11, 1984. The area
covered by its application consisted of 4,941.0 hectares overlapping its abandoned mining
claims. On July 1, 1985, the BFD issued to it a Permit to Prospect No. 755-123185. Discovering
strong evidence of mineral deposits in the area, it applied for a permit to explore with the then
Bureau of Mines and Geo-Sciences (BMGS). On March 10, 1986, it was issued Permit to
Explore No. 133. However, upon verification from the records of the BMGS, Davao City Mineral
District Office, it found that the area covered by its Permit to Explore No. 133 is also the subject
of several claims/declarations of APEX. Thus, on August 11, 1986, MARCOPPER filed with the
BMGS a "Petition for Cancellation of Mining Claims and/or Small Scale Mining Permits" against
APEX, alleging, among others and in substance, that the area covered by its Permit to Explore
No. 133 and the declarations of locations/mining claims belonging to APEX are within an
established and existing forest reservation (Agusan-Davao-Surigao Forest Reserve) under
Proclamation No. 369, dated February 27, 1931, that the said mining claims/declarations of
location of APEX are invalid for being violative of Presidential Decree No. 463 and its
implementing rules and regulations since the acquisition of mining rights within a forest reserve is
 Page 2 of 20

through the filing of application for a permit to prospect with the BFD and not through registration
of declarations of location with the BMGS (Rollo, p. 65; O.P. Decision, p. 2).

On September 23, 1986, APEX filed a Motion to Dismiss Marcopper's petition, alleging, in
substance, that their mining claims are not within any established or proclaimed forest reserve,
and as such, the acquisition of mining lights thereto must be undertaken through the registration
of declaration of location with the BMGS and not through the filing of an application for permit to
prospect with the BFD; and that the permit to prospect and permit to explore issued to
MARCOPPER are inoperative and of no legal force and effect (Ibid., pp. 587-588).

On December 9, 1986, after COPPER filed its reply, the BMGS issued an order, the dispositive
portion of which reads:

VIEWED IN THE LIGHT OF THE FOREGOING, the motion to dismiss should be, as
hereby it is GRANTED. Accordingly, the Permit to Explore No. 133 of the MMC is hereby
declared null and void. (Rollo, P. 110).

MARCOPPER appealed the said order, and the DENR after due hearing, rendered the appealed
decision on April 15, 1987, the dispositive portion of which reads:

WHEREFORE, the Order dated 9 December 1986 of the Director, Bureau of Mines and
Geo-Sciences, is hereby REVERSED or SET ASIDE. Accordingly Permit to Explore No.
133 of appellant Marcopper Mining Corporation is hereby declared valid and subsisting.
The respective mining claims of appellees Apex Mining Corporation, et al., as well as
Small Scale Mining Permit Nos. (X-1), 04 and (X-1), 05, are hereby declared null and
void and/or inoperative. The Director, Bureau of Mines and Geo-Sciences, is hereby
directed to cancel the registered mining claims and to revoke Small Scale Mining Permit
Nos. (X-1) 04 (X-1), 05 of Apex Mining Co., et al. (Ibid., p. 100).

The motion for reconsideration of said decision having been denied by the DENR on January 4,
1988, APEX appealed the case to the Office of the President (Ibid., p. 591), which on July 27,
1989, through the Assistant Executive Secretary for Legal Affairs, Cancio C. Garcia, rendered a
decision, the dispositive portion of which reads:

IN VIEW OF THE FOREGOING, the instant appeal is hereby dismissed for lack of merit
and the appealed DENR decision and order, dated April 15, 1987 and January 4, 1988,
respectively, are hereby AFFIRMED, The stay-order issued by this Office on February
11, 1988 is accordingly LIFTED.

Further the Petition to Intervene As Party filed by Minfed dated May 21, 1988, is hereby
DENIED. (Ibid., pp. 74-75; O.P. Decision, pp. 11-12)

APEX filed a motion for reconsideration, but the same was denied on November 16, 1989.
Hence, this petition.

This Court, after the parties had submitted the required pleadings, in its resolution of August 7,
1990 (Ibid., p. 637), resolved to give due course to the petition.

The instant petition is devoid of merit.

The main issue in this case is whether or not the disputed area is within an established and
existing forest reservation.

The answer is in the affirmative.

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The thrust of the petitioners' argument is that the subject area is not situated within a forest
reserve and that Proclamation No. 369 did not establish a forest reservation. The said
proclamation merely withdrew from settlement or disposition certain tracts of land described
therein situated in the Province of Davao, Agusan and Surigao. It did so on the basis of Section 8
of Act No. 2874, otherwise known as "the Public Land Act" which was promulgated on November
29, 1919 (Rollo, pp. 654657). Proclamation No. 369 could not have, as a matter of law,
established a forest reserve for the simple reason that it was issued not on the basis of Chapter
XII, Title V of Act No. 2874 nor on the basis of Section 1826 of Act 2711 (the Revised
Administrative Code which took effect on June 15, 1939), but on the basis of Section 8 of Act
2874 which empowers the Governor-General only to reclassify lands of the public domain. In
confirmation, Proclamation No. 369 does not even use the word "reserve" or "forest reserve"
(Ibid., p. 24; Petition, p. 17).

Section 8 of Act No. 2874, the former Public Land Act, the basis of Proclamation No. 369,
provides —

Section 8. Only those lands shall be declared open to disposition or concession which
have been officially delimited and classified and, when practicable, surveyed, and which
have not been reserved for public or quasi-public uses, nor appropriated by the
Governor, nor in any manner become private property, not those on which a private right
authorized and recognized by this Act or any other valid law may be claimed, or which,
having been reserved or appropriated, have ceased to do so. However, the Governor-
General may, for reasons of public interest, declare lands of the public domain open to
disposition before the same have had their boundaries established or been surveyed, or
may, for the same reasons, suspend their concession or disposition by proclamation duly
published or by Act of Legislature. (Rollo, pp. 745-746).

From the above-quoted provision, the Governor-General was specifically empowered not only to
declare lands of public domain open to disposition but also to suspend their concession or
disposition. Accordingly, withdrawal of a certain area to establish a forest reserve is, without
question, within the power of the Governor-General. The then Governor-General Dwight F.
Davis, in issuing Proclamation No. 369, withdrew from settlement or disposition the tracts of land
described therein to establish a forest reserve. The intention can be gleaned from the last
paragraph of Proclamation No. 369, which reads:

From this reserve shall be considered automatically excluded all areas which had already
been certified and which in the future may be proclaimed as classified and certified by the
Director of Forestry as non-forest lands and approved by the Secretary of Agriculture and
Natural Resources. (Rollo, P. 768).

Moreover, then President Carlos P. Garcia confirmed that Proclamation No. 369 did establish a
forest reserve when he issued on May 8, 1959 Proclamation No. 583 entitled "Excluding From
the Operation of Proclamation No. 369, Dated February 27, 1931, Which Established The
Agusan-Davao-Surigao Forest Reserve, Certain Parcels of Land Embraced Therein, And
Declaring the Same Open to Disposition Under the Provisions of the Mining Act." (Emphasis
supplied). This proclamation was concurred in by the Congress of the Philippines on May 21,
1959 through Concurrent Resolution No. 17 entitled "Concurrent Resolution Concurring in
Proclamation Numbered Five Hundred Eighty-Three of the President of the Philippines, Dated
May Eight, Nineteen Hundred Fifty Nine, Excluding From the Operation of Proclamation
Numbered Three Hundred Sixty-Nine, which Established the Agusan-Davao-Surigao Forest
Reserve, Certain Parcels of Land Embraced Therein, and Declaring the Same Open to
Disposition Under the Provisions of the Mining Act." (Emphasis supplied).

In this connection, it should be stated that the findings of government agencies with respect to
the construction of statutes the implementation of which has been reposed in them, are
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controlling on the Court (Greenhills Mining Company v. Office of the President, 163 SCRA 350
[1988]).

The disputed areas, being clearly within a forest reserve, are not open to mining location.
Sections 8 and 13 of P.D. No. 463, as amended by P.D. No. 1385, provide:

Sec. 8. Prospecting, Exploration and Exploitation of Minerals in Reserved

Lands. Prospecting, exploration and exploitation of minerals in reserved lands other than
1âw phi 1

mineral reservations may be undertaken by the proper Government agencies. In the

event that said agencies Cannot undertake the prospecting, exploration and exploitation
of mineral in reserved lands, qualified persons may be permitted to undertake such
prospecting, exploration and exploitation in accordance with the rules and regulations
promulgated by the Secretary. The right to exploit the minerals found therein shag be
awarded by the President under such terms and conditions as recommended by the
Director and approved by the Secretary: Provided, That the party who undertook
prospecting, exploration and exploitation of said area shall be given priority.

Notwithstanding the provisions of the preceding paragraph, a special permit may be

issued by the Director to the exploration permittee to extract, remove and dispose of
minerals in limited quantities as verified by the Bureau of Mines.

Sec. 13. Areas Closed to Mining Location. No prospecting and exploration shall be
allowed:

a) In military, or other Government reservations except when authorized by the

proper Government agency concerned;

xxx xxx xxx

Pursuant to P.D. No. 463, as amended, one can acquire mining rights within forest reserves by
initially applying for a permit to prospect with the Bureau of Forest and Development (BFD) and
subsequently for a permit to explore with the Bureau of Mines and Geo-Sciences (BMGS). Such
procedural requisites were complied with and undertaken by MARCOPPER after it had
ascertained that its mining claims were found to be within the Agusan-Davao-Surigao Forest
Reserve. On the other hand, the mining claims and SSMPs of APEX being located within said
forest reserve, are in violation of the law and therefore result in a failure to validly acquire mining
rights.

Finally, invariable is the rule that in reviewing administrative decisions of the Executive Branch of
the government, the findings of fact made therein must be respected, as long as they are
supported by substantial evidence, even if not overwhelming or preponderant. It is not for the
reviewing court to weigh the conflicting evidence, determine the credibility of the witnesses, or
otherwise substitute its own judgment for that of the administrative agency on the sufficiency of
the evidence. The administrative decision in matters within the executive jurisdiction can only be
set aside on proof of gross abuse of discretion, fraud or error of law (Assistant Executive
Secretary for Legal Affairs of the Office of the President v. Court of Appeals, 169 SCRA 27
[1989]).

PREMISES CONSIDERED, the appealed decision of the Office of the President is AFFIRMED
and the petition for certiorari is DISMISSED.

SO ORDERED.

Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin,
Sarmiento, Griño-Aquino, Medialdea, Regalado and Davide, Jr., JJ., concur.
Gancayco, J., is on leave.
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G.R. No. L-65021 November 21, 1991

BENGUET CORPORATION, petitioner,

vs.
HON OSCAR L. LEVISTE, in his capacity as Presiding Judge of the Regional Trial Court
(National Capital Judicial Region, Branch XCVII, Quezon City) and HELEN DIZON-
REYES, respondents.

Sycip Salazar Feliciano & Hernandez for petitioner.

Laurel Law offices for private respondent.

FERNAN, C.J.:

At issue in this petition for certiorari and prohibition with preliminary injunction is the jurisdiction of
the regional trial court (RTC) to take cognizance of an action for annulment of operations
agreement entered into by and between two mining companies.

The action under consideration was commenced by private respondent Helen Dizon-Reyes
against herein petitioner Benguet Corporation and Dizon Copper-Silver Mines, Inc. 1 on June
20, 1980 before the Regional Trial Court of Quezon City. In her complaint,
docketed as Civil Case No. Q-30171, private respondent alleged that she is the
claimowner of 11 mining claims all located in the province of Zambales. On
January 15, 1967, she executed a Special Power of Attorney constituting her
father, Celestino M. Dizon, as her attorney-in-fact with full powers to "transfer,
assign and dispose of her 11 mining claims." 2

Soon thereafter on January 21, 1967, Celestino M. Dizon, acting as such attorney-in-fact
for private respondent and other claimowners, entered into an Agreement, 3 with Dizon
Mine whereby the latter was granted the right to explore, develop, exploit and
operate the 57 mining claims owned by the claimowners including the 11
claims of private respondent.

Seven (7) years later, on December 17, 1974, private respondent and the other
claimowners executed a Deed of Ratification of Assignment, 4 confirming the
assignment, transfer and conveyance unto Dizon Mines and its assigns and
successors of the rights to possess, occupy, explore, develop and operate all
the aforesaid mining claims.

On March 1, 1975, or almost three (3) months after the Deed of Ratification was executed,
private respondent revoked Special Power of Attorney of January 15, 1967, stating that
"while there is no question that I still have complete and full trust and confidence in the
judgment and wisdom of my father, it is not my wish to add any more to his already many
a mounting problems." 5 Notice of the revocation was served on Dizon Mines on
March 20, 1975 and on Benguet on August 26, 1975.

However, in spite of said notice, on September 6, 1975, Dizon Mines and Benguet entered
into an Operations Agreement 6 whereby the former transferred to the latter the
possession of the 57 mining claims for the purpose of exploring, developing
 Page 6 of 20

and operating them for production and marketing of marketable products

under the terms and conditions specified therein.

Claiming that the Operations Agreement lacked legal basis by reason of the revocation of
Celestino Dizon's special power of attorney; the obligation imposed by the Agreement of
January 21, 1967 on Dizon Mines to itself operate the mines after raising the capital
needed therefor, without authority to engage another corporation for this purpose; and
the inefficacy of the Deed of Ratification arising from the physiological incapacity of
Celestino Dizon to give his consent thereto, private respondent prayed that the
Operations Agreement be declared null and void and inoperative insofar as it covers her
eleven (11) lode mining claims. In the alternative, private respondent prayed that should
the validity of the Operations Agreement be upheld, defendants therein be ordered to
observe and comply with the sharing of profits stipulated in the Agreement of January 21,
1967. She further prayed for the award of attorney's fees and expenses of litigation as may
be proved during the trial.

On August 12, 1980, Benguet filed a Motion to Dismiss on the following grounds: 1) the
court is without jurisdiction over the subject matter and nature of the action; 2) the action
is barred by prior judgment and laches; 3) the action to declare invalid the Deed of
Ratification has prescribed; and 4) the venue of the action was improperly laid. Dizon
Mines filed its own motion to dismiss.

After private respondent has filed her consolidated opposition to the motions to dismiss
and Benguet, its reply to said consolidated opposition, the trial court issued an Order
dated March 26, 1982, denying the motions to dismiss for lack merit. 7

Its motion for reconsideration having been likewise denied in an Order dated June 20,
1983, 8 petitioner Benguet is now before this Court, reiterating the four (4)
grounds stated in its motion to dismiss.

Invoking Section 7 (c) of Presidential Decree No. 1281 and the ruling in Twin Peaks Mining
Association vs. Navarro and Philex Mining Corp., 9 petitioner contends that the RTC
has no jurisdiction over Civil Case No. 30171 as jurisdiction over actions to
cancel mining contracts is vested exclusively in the Bureau of Mines and Geo-
Sciences. It likewise adverts to the decision of the Secretary of Natural
Resources dated March 17, 1976 on the private respondent's opposition to the
registration of the subject Operations Agreement. It claims that that decision
had become final upon private respondent's failure to appeal to the Office of
the President, constitutes res judicata to the question of the validity of the
Operations Agreement. Besides, by failing to take seasonable action, private
respondent is guilty of laches in that she has led petitioner Benguet to believe
that she was amenable to the decision of the Secretary of Natural Resources
and to incur huge expenses in connection with the development of the mining
claims.

Moreover, petitioner maintains that the action to annul the Deed of Ratification upon
which private respondent thinks the validity of the Operations Agreement necessarily
depends, should have been brought within four (4) years from its execution on December
12, 1974. Thus, the complaint filed on June 20, 1980 came too late.

Lastly, petitioner theorizes that since the action to annul the mining contract necessarily
involves the recovery of possession of the mining claims which are located in Zambales,
venue of the action should have been laid in Zambales.
 Page 7 of 20

Private respondent in her Comment, later adopted as her Memorandum, 10 confined her
discussion to the issues of jurisdiction and venue, because in her opinion, the
other grounds involve questions of facts entailing the presentation of
evidence, which is premature and improper in a petition for certiorari. 11

While admitting that the contract sought to be annulled is a mining contract, private
respondent nonetheless opines that the action for its annulment does not fall under the
jurisdiction of the Bureau of Mines. The reason given is that Section 7 (c) of P.D. 1281
contemplates a mining contract, valid and binding in all respects, but either the
claimowner or operator refuses to comply with its terms and conditions. In the case at
bar, the contract is null and void because of the mental incapacity of the late Celestino
Dizon to execute the Deed of Ratification on the validity of which the validity of the
Operations Agreement is in turn dependent. Thus, the principal issue in this case
is not whether or not the claimowner or operator refuses to comply with the contract's
terms and conditions, but rather the mental capacity of the attorney-in-fact to execute a
prior agreement upon which the Operations Agreement is based. It is claimed that the
Bureau of Mines and Geo-Sciences is not equipped to determine the question of mental
capacity.

Anent the issue of venue, private respondent contends that the case does not affect title
to or possession of real property, and therefore, is not a real action but an action in
personam, for which venue is laid in the residence of the plaintiff.

We grant the petition. Presidential Decree No. 1281 which took effect on January 16,1978
vests the Bureau of Mines with jurisdictional supervision and control over all holders of
mining claims or applicants for and/or grantees of mining licenses, permits, leases and/or
operators thereof, including mining service contracts and service contractors insofar as
their mining activities are concerned. 12 To effectively discharge its task as the
Government's arm in the administration and disposition of mineral resources,
Section 7 of P.D. No. 1281 confers upon the Bureau quasi-judicial powers as
follows:

Sec. 7. In addition to its regulatory and adjudicative functions over companies,

partnerships or persons engaged in mining exploration, development and
exploitation, the Bureau of Mines shall have original and exclusive jurisdiction to
hear and decide case involving:

xxx xxx xxx

(c) cancellation and/or enforcement of mining contracts due to the refusal of the
claimowner/operator to abide by the terms and conditions thereof.

Analyzing the objectives of P.D. 1281, particularly said Section 7 thereof, the Court in Twin
Peaks Mining Association, 13 the case relied upon by petitioner, noted that the
trend is to make the adjudication of mining cases a purely administrative
matter. This observation was reiterated in the more
recent case of Atlas Consolidated Mining & Development Corp. vs. Court of
Appeals. 14

In the case at bar, it is not disputed that the subject agreement is a mining contract and
private respondent, in seeking a judicial declaration of its nullity, does not wish to abide
by its terms and conditions. These elements alone bring the action within the ambit of
Section 7 of P.D. 1281. Whatever the basis for the refusal to abide by the contract's terms
 Page 8 of 20

and conditions, the basic issue remains one of its cancellation, which is precisely what
P.D. No. 1281 places within the exclusive original jurisdiction for the Bureau.

The reason underlying such refusal is indeed an irrelevant matter insofar as jurisdictional
competence is concerned, for to make jurisdiction dependent thereon would not only be
"ratifying two judicial bodies exercising jurisdiction over an essentially the same subject
matter—a situation analogous to split jurisdiction which is obnoxious to the orderly
administration of justice" 15 but also clearly ignoring the object of P.D. 1281 to
make the adjudication of mining cases a purely administrative matter.

And if, perchance the law did intend to split jurisdiction, it could have done so by
providing exceptions to par. (c), Section 7 of P.D. No. 1281. Not having done so, there can
be no justification for restricting or limiting the Bureau's jurisdiction over "actions for
cancellation and/or enforcement of mining contracts due to the refusal of the
claimowner/operator to abide by the terms and conditions thereof."

In the light of our ruling that the jurisdiction over private respondent's action to annul the
Operations Agreement pertains to the Bureau of Mines and Geo-Sciences rather than the
regional trial court, the question of venue becomes immaterial.

Considering further that the other issues raised by petitioner, namely res judicata, laches
and prescription are factual matters which are not only improper in a petition
for certiorari but which, more importantly, petitioner failed to substantiate, no ruling on
these issues need be made.

WHEREFORE, the instant petition is GRANTED. The assailed orders of March 26, 1982 and
June 20, 1983 are set aside and Civil Case No. Q-30171 of the Regional Trial Court of
Quezon City, Branch XCVII, is ordered DISMISSED. This decision is immediately
executory. Costs against private respondent.

SO ORDERED.

Gutierrez, Jr., Bidin, Davide, Jr. and Romero, JJ., concur.

 Page 9 of 20

G.R. No. 88550 April 18, 1990

INDUSTRIAL ENTERPRISES, INC., petitioner,

vs.
THE HON. COURT OF APPEALS, MARINDUQUE MINING & INDUSTRIAL CORPORATION,
THE HON. GERONIMO VELASCO in his capacity as Minister of Energy and PHILIPPINE
NATIONAL BANK, respondents.

Manuel M. Antonio and Dante Cortez for petitioner.

Pelaez, Adriano & Gregorio for respondent MMIC.
The Chief Legal Counsel for respondent PNB.

MELENCIO-HERRERA, J.:

This petition seeks the review and reversal of the Decision of respondent Court of Appeals in CA-
G.R. CV No. 12660, 1 which ruled adversely against petitioner herein.

Petitioner Industrial Enterprises Inc. (IEI) was granted a coal operating contract by the
Government through the Bureau of Energy Development (BED) for the exploration of two coal
blocks in Eastern Samar. Subsequently, IEI also applied with the then Ministry of Energy for
another coal operating contract for the exploration of three additional coal blocks which, together
with the original two blocks, comprised the so-called "Giporlos Area."

IEI was later on advised that in line with the objective of rationalizing the country's over-all coal
supply-demand balance . . . the logical coal operator in the area should be the Marinduque
Mining and Industrial Corporation (MMIC), which was already developing the coal deposit in
another area (Bagacay Area) and that the Bagacay and Giporlos Areas should be awarded to
MMIC (Rollo, p. 37). Thus, IEI and MMIC executed a Memorandum of Agreement whereby IEI
assigned and transferred to MMIC all its rights and interests in the two coal blocks which are the
subject of IEI's coal operating contract.

Subsequently, however, IEI filed an action for rescission of the Memorandum of Agreement with
damages against MMIC and the then Minister of Energy Geronimo Velasco before the Regional
Trial Court of Makati, Branch 150, 2 alleging that MMIC took possession of the subject coal
blocks even before the Memorandum of Agreement was finalized and approved by the BED; that
MMIC discontinued work thereon; that MMIC failed to apply for a coal operating contract for the
adjacent coal blocks; and that MMIC failed and refused to pay the reimbursements agreed upon
and to assume IEI's loan obligation as provided in the Memorandum of Agreement (Rollo, p. 38).
IEI also prayed that the Energy Minister be ordered to approve the return of the coal operating
contract from MMIC to petitioner, with a written confirmation that said contract is valid and
effective, and, in due course, to convert said contract from an exploration agreement to a
development/production or exploitation contract in IEI's favor.

Respondent, Philippine National Bank (PNB), was later impleaded as co-defendant in an

Amended Complaint when the latter with the Development Bank of the Philippines effected extra-
judicial foreclosures on certain mortgages, particularly the Mortgage Trust Agreement, dated 13
July 1981, constituted in its favor by MMIC after the latter defaulted in its obligation totalling
around P22 million as of 15 July 1984. The Court of Appeals eventually dismissed the case
against the PNB (Resolution, 21 September 1989).

Strangely enough, Mr. Jesus S. Cabarrus is the President of both IEI and MMIC.
 Page 10 of 20

In a summary judgment, the Trial Court ordered the rescission of the Memorandum of
Agreement, declared the continued efficacy of the coal operating contract in favor of IEI; ordered
the reversion of the two coal blocks covered by the coal operating contract; ordered BED to issue
its written affirmation of the coal operating contract and to expeditiously cause the conversion
thereof from exploration to development in favor of IEI; directed BED to give due course to IEI's
application for a coal operating contract; directed BED to give due course to IEI's application for
three more coal blocks; and ordered the payment of damages and rehabilitation expenses (Rollo,
pp. 9-10).

In reversing the Trial Court, the Court of Appeals held that the rendition of the summary judgment
was not proper since there were genuine issues in controversy between the parties, and more
importantly, that the Trial Court had no jurisdiction over the action considering that, under
Presidential Decree No. 1206, it is the BED that has the power to decide controversies relative to
the exploration, exploitation and development of coal blocks (Rollo, pp. 43-44).

Hence, this petition, to which we resolved to give due course and to decide.

Incidentally, the records disclose that during the pendency of the appeal before the Appellate
Court, the suit against the then Minister of Energy was dismissed and that, in the meantime, IEI
had applied with the BED for the development of certain coal blocks.

The decisive issue in this case is whether or not the civil court has jurisdiction to hear and decide
the suit for rescission of the Memorandum of Agreement concerning a coal operating contract
over coal blocks. A corollary question is whether or not respondent Court of Appeals erred in
holding that it is the Bureau of Energy Development (BED) which has jurisdiction over said action
and not the civil court.

While the action filed by IEI sought the rescission of what appears to be an ordinary civil contract
cognizable by a civil court, the fact is that the Memorandum of Agreement sought to be rescinded
is derived from a coal-operating contract and is inextricably tied up with the right to develop coal-
bearing lands and the determination of whether or not the reversion of the coal operating contract
over the subject coal blocks to IEI would be in line with the integrated national program for coal-
development and with the objective of rationalizing the country's over-all coal-supply-demand
balance, IEI's cause of action was not merely the rescission of a contract but the reversion or
return to it of the operation of the coal blocks. Thus it was that in its Decision ordering the
rescission of the Agreement, the Trial Court, inter alia, declared the continued efficacy of the
coal-operating contract in IEI's favor and directed the BED to give due course to IEI's application
for three (3) IEI more coal blocks. These are matters properly falling within the domain of the
BED.

For the BED, as the successor to the Energy Development Board (abolished by Sec. 11, P.D.
No. 1206, dated 6 October 1977) is tasked with the function of establishing a comprehensive and
integrated national program for the exploration, exploitation, and development and extraction of
fossil fuels, such as the country's coal resources; adopting a coal development program;
regulating all activities relative thereto; and undertaking by itself or through service contracts
such exploitation and development, all in the interest of an effective and coordinated
development of extracted resources.

Thus, the pertinent sections of P.D. No. 1206 provide:

Sec. 6. Bureau of Energy Development. There is created in the Department a Bureau of

Energy Development, hereinafter referred to in this Section as the Bureau, which shall
have the following powers and functions, among others:
 Page 11 of 20

a. Administer a national program for the encouragement, guidance, and whenever

necessary, regulation of such business activity relative to the exploration, exploitation,
development, and extraction of fossil fuels such as petroleum, coal, . . .

The decisions, orders, resolutions or actions of the Bureau may be appealed to the
Secretary whose decisions are final and executory unless appealed to the President.
(Emphasis supplied.)

That law further provides that the powers and functions of the defunct Energy Development
Board relative to the implementation of P.D. No. 972 on coal exploration and development have
been transferred to the BED, provided that coal operating contracts including the transfer or
assignment of interest in said contracts, shall require the approval of the Secretary (Minister) of
Energy (Sec. 12, P.D. No. 1206).

Sec. 12. . . . the powers and functions transferred to the Bureau of Energy Development
are:

xxx xxx xxx

ii. The following powers and functions of the Energy Development Board under PD No.
910 . . .

(1) Undertake by itself or through other arrangements, such as service contracts, the
active exploration, exploitation, development, and extraction of energy resources . . .

(2) Regulate all activities relative to the exploration, exploitation, development, and
extraction of fossil and nuclear fuels . . .

(P.D. No. 1206) (Emphasis supplied.)

P.D. No. 972 also provides:

Sec. 8. Each coal operating contract herein authorized shall . . . be executed by the
Energy Development Board.

Considering the foregoing statutory provisions, the jurisdiction of the BED, in the first instance, to
pass upon any question involving the Memorandum of Agreement between IEI and MMIC,
revolving as its does around a coal operating contract, should be sustained.

In recent years, it has been the jurisprudential trend to apply the doctrine of primary jurisdiction in
many cases involving matters that demand the special competence of administrative agencies. It
may occur that the Court has jurisdiction to take cognizance of a particular case, which means
that the matter involved is also judicial in character. However, if the case is such that its
determination requires the expertise, specialized skills and knowledge of the proper
administrative bodies because technical matters or intricate questions of facts are involved, then
relief must first be obtained in an administrative proceeding before a remedy will be supplied by
the courts even though the matter is within the proper jurisdiction of a court. This is the doctrine
of primary jurisdiction. It applies "where a claim is originally cognizable in the courts, and comes
into play whenever enforcement of the claim requires the resolution of issues which, under a
regulatory scheme, have been placed within the special competence of an administrative body,
in such case the judicial process is suspended pending referral of such issues to the
administrative body for its view" (United States v. Western Pacific Railroad Co., 352 U.S. 59,
Emphasis supplied).
 Page 12 of 20

Clearly, the doctrine of primary jurisdiction finds application in this case since the question of
what coal areas should be exploited and developed and which entity should be granted coal
operating contracts over said areas involves a technical determination by the BED as the
administrative agency in possession of the specialized expertise to act on the matter. The Trial
Court does not have the competence to decide matters concerning activities relative to the
exploration, exploitation, development and extraction of mineral resources like coal. These
issues preclude an initial judicial determination. It behooves the courts to stand aside even when
apparently they have statutory power to proceed in recognition of the primary jurisdiction of an
administrative agency.

One thrust of the multiplication of administrative agencies is that the interpretation of

contracts and the determination of private rights thereunder is no longer a uniquely
judicial function, exercisable only by our regular courts (Antipolo Realty Corp. vs.
National Housing Authority, 153 SCRA 399, at 407).

The application of the doctrine of primary jurisdiction, however, does not call for the dismissal of
the case below. It need only be suspended until after the matters within the competence of the
BED are threshed out and determined. Thereby, the principal purpose behind the doctrine of
primary jurisdiction is salutarily served.

Uniformity and consistency in the regulation of business entrusted to an administrative

agency are secured, and the limited function of review by the judiciary are more rationally
exercised, by preliminary resort, for ascertaining and interpreting the circumstances
underlying legal issues, to agencies that are better equipped than courts by
specialization, by insight gained through experience, and by more flexible procedure (Far
East Conference v. United States, 342 U.S. 570).

With the foregoing conclusion arrived at, the question as to the propriety of the summary
judgment rendered by the Trial Court becomes unnecessary to resolve.

WHEREFORE, the Court Resolved to DENY the petition. No costs.

SO ORDERED.

Paras, Padilla, Sarmiento and Regalado, JJ., concur.

 Page 13 of 20

G.R. No. L-54305 February 14, 1990

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, HEIRS OF PEDRO B. GOROSIN and VICENTE T.
GARAYGAY, respondents.

Belo, Ermitaño, Abiera & Associates for petitioner.

Jose T. Sumcad for respondent Malayan Integrated Industries, et al.

Ramon B. Ceniza for intervenor.

GANCAYCO, J.:

Can a person who is not a party to a contract file a petition for declaratory relief and seek a
judicial intepretation of such contract? Can a trial court which had already taken cognizance of an
action involving a mining controversy be divested of jurisdiction to hear and decide the case upon
the promulgation of Presidential Decree No. 1281? 1 These are the threshold issues brought
about by the long drawn legal battle between the conflicting parties in this case.

The facts are undisputed.

On June 5, 1973, Atlas Consolidated Mining & Development Corporation (ATLAS) entered into
an operating agreement with the heirs of Manuel Cuenco and Jose P. Velez (collectively referred
to herein as CUENCO-VELEZ) whereby in consideration of royalties to be paid by ATLAS to
CUENCO-VELEZ, the former was granted the right to explore, develop and operate twelve (12)
mining claims belonging to the latter located at Toledo City, Cebu.

On June 17, 1973, ATLAS entered into a similar agreement with the Biga Copper Mines
Exploration Company (BIGA COPPER), a partnership composed of Pablo B. Gorosin, Francisco
B. Gorosin, Pedro B. Gorosin and Vicente T. Garaygay (collectively referred to herein as the
BIGA PARTNERS). Subject of this Operating Agreement are thirty-one (31) mining claims of
BIGA-COPPER likewise located at Toledo City, Cebu.

It appears, however, that of the total mining claims "leased" by ATLAS from both the CUENCO-
VELEZ and BIGA COPPER, nine (9) mining claims overlap. These nine (9) overlapping mining
claims became the subject of Mines Administrative Cases Nos. V-727 and V-750 whereby under
date of February 12, 1974, the Director of Mines resolved the same in favor of CUENCO-VELEZ.
BIGA COPPER appealed this decision to the Secretary of Agriculture and Natural Resources
who, in a decision dated April 14, 1974, in DANR Cases Nos. 3936 and 3936-A, affirmed the
decision of the Director of Mines. This later decision was appealed to the Office of the President
under O.P. Case No. 0435.

During the pendency of this appeal in the Office of the President, the parties, namely, CUENCO-
VELEZ and BIGA COPPER, entered into a compromise agreement. 2 This compromise
agreement enabled BIGA-COPPER to eventually lay claim over the nine (9) overlapping mining
claims.

Earlier, ATLAS alleged that when it started the operation of its Carmen Project, which includes
some of the mining claims subject of the aforestated Operating Agreements with BIGA COPPER
 Page 14 of 20

and CUENCO-VELEZ ATLAS received numerous letters from third- parties claiming that they
were assignees of BIGA COPPER and the BIGA PARTNERS over the mining claims. These
third-parties claim that as such assignees, they are legally entitled to receive the corresponding
royalties from the mining operation. In effect, they ask ATLAS that they be substituted to the
rights of BIGA COPPER and the BIGA PARTNERS under the operating agreement.

ATLAS allegedly conducted a verification of the said demands and later on confirmed that before
the registration of the Articles of Partnership of BIGA COPPER, the BIGA PARTNERS sold
and/or assigned some of their respective shares, rights, interests and participations over the
mining claims to third parties 3 and that BIGA COPPER, acting separately from the BIGA
PARTNERS, likewise sold and/or assigned its undivided shares, interests and participations over
the mining claims to third parties. 4

On the other hand, a certain Alejandro T. Escano wrote ATLAS informing the latter that he is an
assignee of CUENCO-VELEZ with respect to the three (3) mining claims which CUENCO-VELEZ
retained under the compromise agreement with BIGA COPPER. Escano, alleged that CUENCO-
VELEZ had assigned to him fifty percent (50%) of their rights, interests and participations in the
said mining claims. 5 In turn, CUENCO-VELEZ advised ATLAS that their assignment to Alejandro
T. Escano was already revoked or rescinded for failure of the said assignee to fulfill the
conditions contained in their deed of assignment. 6

In the light of the foregoing situation, ATLAS instituted a petition for declaratory relief with the
then Court of First Instance of Cebu, Branch 8, and which was docketed as Civil Case No.
16669-R. Cited as respondents therein were BIGA COPPER, BIGA PARTNERS, CUENCO-
VELEZ and some thirty-one (31) assignees. 7

In their amended petition filed with the trial court, ATLAS raised the following issues for
resolution, to wit:

1. Since ATLAS is now in the process of developing and exploring the Carmen
project which includes the mining claims of the BIGA COPPER and CUENCO-
VELEZ, should it extract and sipose (sic) of ores from the BIGA COPPER and
CUENCO-VELEZ claims, to whom shall ATLAS pay the royalties due thereon?

2. Considering that a Compromise Agreement has been entered into by and

between BIGA COPPER and CUENCO- VELEZ on some claims contested by
them, which compromise agreement was already submitted to the President for
his final approval, should ATLAS respect the same before the final approval of
the President in paying royalties under the operating agreements with BIGA
COPPER and CUENCO-VELEZ, respectively?

3. Considering further that before the compromise agreement was entered into,
BIGA COPPER had already assigned a large part of its interest to third parties,
does the compromise agreement entered into by BIGA COPPER bind these
assignees? Can BIGA COPPER enter into a compromise agreement with the
CUENCO-VELEZ insofar as the shares of these assignees are concerned?

4. Considering finally that before and after the compromise agreement was
entered into, BIGA COPPER and/or its partners as signed and/or sold various
rights to royalties over the mining claims covered by its Operating Agreement
with ATLAS; on the other hand, CUENCO-VELEZ made assignments after the
compromise agreement was entered into, should ATLAS recognize these
assignments and pay royalties to the assignees?
 Page 15 of 20

5. Since the assignments made by BIGA COPPER and/or its PARTNERS

exceeded the participation and/or shares of the PARTNERS in the partnership,
which assignment or who of the assignees are entitled to royalties?

6. Considering that the PARTNERS made individual assignments of their

respective shares, rights, interests and/or participations in the so-called
partnership, the total of which together with the assignments made directly by the
said partnership itself, aggregated 37.5% of the interest therein as of the date the
PARTNERS registered the Articles of Partnership of BIGA COPPER, wherein the
PARTNERS represented that they own 25% each in the partnership, with the
Securities and Exchange Commission, is ATLAS, by law, bound to respect the
assignments by the PARTNERS and/or by the partnership itself prior to and/or
subsequent to said registration?

7. Considering that the PARTNERS have also made assignments of their

respective shares, rights, interests and/or participations after the registration of
the said partnership, are those assignments valid and binding upon ATLAS? 8

To this petition for declaratory relief, respondents filed a motion to dismiss dated January 18,
1978 stating as grounds therefor the following:

1. The Honorable Court has no jurisdiction over the subject of the action or suit;

2. The complaint states no cause of action;

3. The court has no jurisdiction over the nature of the suit. 9

ATLAS filed a written opposition thereto dated February 4, 1978. 10

Meanwhile, due to the promulgation of Presidential Decree No. 1281, effective January 16, 1978,
a number of the defendants in the court below filed a supplemental motion to dismiss dated
February 17, 1978. 11 They alleged in their supplemental motion that the operating agreement
which BIGA COPPER signed with ATLAS had already been revoked by a letter dated February
11, 1978, 12 and that by reason of this rescission, the trial court is deemed to have lost jurisdiction
pursuant to Section 7, paragraphs A and C and Section 12 of Presidential Decree No. 1281.

Section 7, paragraphs A and C and Section 12 of the Decree provide:

SECTION 7. In addition to its regulatory and adjudicative functions over

companies, partnerships or persons engaged in mining explorations,
development and exploitation, the Bureau of Mines shall have original and
exclusive jurisdiction to hear and decide cases involving:

(a) a mining property subject of different agreements entered into by the claim
holder thereof with several mining operators;

xxx xxx xxx

(b) Cancellation and/or enforcement of mining contracts due to the refusal of the
claim owner/operator to abide by the terms and conditions thereof.

xxx xxx xxx

 Page 16 of 20

SECTION 12. All laws, executive orders, decrees, rules and regulations or parts
thereof contrary to or inconsistent with the provisions of this decree, are hereby
repealed and amended or modified accordingly. (Emphasis supplied.)

On March 13,1978, ATLAS filed a supplemental opposition to the supplemental motion to

dismiss arguing that BIGA COPPER had no right to unilaterally cancel their operating
agreement. 13

After considering the pleadings filed by the conflicting parties to the case, the trial court, then
presided by Judge Regino Hermosisima, Jr., issued an order dated May 29, 1978 requiring the
defendants therein to answer the petition for declaratory relief it appearing "[t]hat the ground
stated in the motion to dismiss does not appear to be indubitable." 14

Accordingly, the defendants filed their answer which reiterated the allegations contained in their
motion to dismiss filed earlier. 15

On December 29, 1978, some of the defendants in the court below, namely, BIGA COPPER,
BIGA PARTNERS, Malayan Integrated Industries Corp., Guillermo Ponce and Esmael Garaygay,
filed another motion to dismiss the proceedings reiterating, once again, the same allegations in
their previous motions to dismiss. 16 It was likewise alleged in that same motion that the trial court
had already lost jurisdiction over the case in view of an action for annulment of the operating
agreement between BIGA COPPER and ATLAS which had been filed with the Bureau of Mines
(docketed as Special Case No. V-95) and which was set for hearing on January 22, 1979.

In an order dated January 17, 1979, the trial court denied the above mentioned motion, ruling
that there is no mining controversy involved in the case before it. Further, the court a quo clarified
that the declaratory action is merely for a judicial pronouncement on the rights and obligations of
ATLAS under several operating agreements. It went on to state that the action for annulment of
the operating agreement filed with the Bureau of Mines is not Identical with the petition for
declaratory relief and, therefore, does not oust the trial court of its jurisdiction to hear the
petition. 17

Respondents herein sought reconsideration of the immediately preceding order but failed in their
attempt. Thus, a petition for certiorari was filed with the Court of Appeals, docketed as CA-G.R.
No. SP-09773, assailing the orders of the court a quo as having been issued with grave abuse of
discretion amounting to lack or excess of jurisdiction.

The issues presented before the Court of Appeals were as follows:

(1) Whether or not the trial court had jurisdiction to try the action for declaratory
relief, and assuming it had, whether it was divested of said jurisdiction by the
subsequent enactment of PD 1281 ... and

(2) Whether or not respondent Judge committed grave abuse of discretion ... in
issuing the assailed orders. 18

In its decision, 19 the appellate court ruled in favor of herein respondents and ordered the trial
court to dismiss the declaratory action. We quote the pertinent portions of that decision, to wit:

But while we hold that respondent Judge has jurisdiction over the declaratory
action of which he was not divested by the promulgation of PD 1281, he should
have precisely exercised his jurisdiction by sustaining petitioners' motion to
dismiss grounded on lack of cause of action primordially because the allegations
of the complaint patently present no justiciable controversy. ...
 Page 17 of 20

xxx xxx xxx

Considering then that the declaratory suit calls for resolution of questions which
necessarily involve the validity and enforcement of the operating and deeds of
assignment, now subject of pending administrative cases before the Bureau of
Mines from which adequate and exclusive relief may be obtained, and the fact
that Atlas' right to file the suit is even questionable, the ineluctable conclusion is
that respondent Judge gravely abused his discretion ...

xxx xxx xxx

Here, We are confronted with a situation where the declaratory action should not
have been allowed xxx, the allegations of the complaint clearly suggesting more
of a request for an advisory opinion or the more proper remedy of
interpleader. ... 20

Claiming to be adversely affected by the decision of the Court of Appeals, ATLAS interposed the
present petition for review on certiorari.

After requiring respondents herein to file their comments to the petition, 21 Epifanio A. Anoos,
claiming to have a legal interest over the matter in litigation, filed with this Court a motion to admit
his petition in intervention dated September 12, 1980. In support thereof, Anoos alleges that he is
one of the defendants in the proceedings for declaratory relief; and that the trial court in the same
case, under date of February 21, 1979, had already rendered a summary judgment in his favor. 22

Anoos, in effect, joins ATLAS in its prayer to have the decision of the respondent appellate court
set aside and additionally, as arguments peculiar only to him, asserts that (1) the Court of
Appeals violated the due process clause of the Constitution when it rendered the questioned
decision without notice to the rest of the parties in the proceeding below; and (2) that the
summary judgment in his favor dated February 21, 1979 had already become final and executory
by reason of the failure of private respondents herein to take steps to appeal therefrom. 23

On December 8, 1980, Milagros Cuenco, Antonio V. Cuenco, Ramon V. Cuenco, Manuel V.

Cuenco, Jr., Jose V. Cuenco, Filomena Cuenco, Jesus V. Cuenco and Jose P. Velez, earlier
referred to herein as CUENCO-VELEZ, filed with this Court a similar petition in
intervention 24 alleging that (1) their right to both substantive and procedural due process was
violated, inasmuch as they were not impleaded before the respondent appellate court; and (2)
that the decision of the appellate court is not in accordance with law. 25

In a resolution dated July 1, 1981 this Court finally resolved to give due course to the petition for
review filed by ATLAS. In that same resolution, the motions for intervention of both Efifanio A.
Anoos and CUENCO-VELEZ were granted. 26

We now proceed to the discussion of the merits of this petition. To reiterate the first issue—can a
person who is not a party to a contract file a petition for declaratory relief and seek a judicial
interpretation of such contract?

We rule in the negative.

Declaratory relief has been defined as an action by any person interested under a deed, will,
contract or other written instrument or whose rights are affected by a statute, ordinance,
executive order or regulation to determine any question of construction or validity arising under
the instrument, executive order or regulation, or statute and for a declaration of his rights and
duties thereunder. 27 The only question that may be raised in such kind of petition is the question
of "construction' or "validity" arising under an instrument or statute. 28
 Page 18 of 20

Corollary to this is the general rule that such an action must be justified such that no other
adequate relief or remedy is available under the circumstances. 29 This, in turn, can be explained
by the fact that the only object of a declaratory action is merely to terminate uncertainties in an
instrument or a statute. The judgment of the court concerned cannot extend beyond a declaration
of the rights and duties of the parties to the action or provide for corrective relief. 30

In the case at bar, ATLAS wants Us to sustain its position that under the factual backdrop
narrated earlier, it is entitled, as a matter of law, to proceed with its petition for declaratory relief.

After a careful analysis of the arguments presented by the parties herein, this Court rules that
there is no legal ground to sustain the contention of ATLAS.

ATLAS cannot be considered as an interested party under the deeds of assignment and,
therefore, has no standing to institute the declaratory action.

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.

While this issue cannot find a square precedent in existing jurisprudence, however,
pronouncements made by this Court in Tadeo vs. Provincial Fiscal of Pangasinan 31 and United
Central & Cellulose Labor Association (PLUM) vs. Santos 32 are of great significance in the
resolution of this legal question.

In Tadeo, this Court ruled that a notary public before whom the execution of a deed of sale was
acknowledged is not entitled to file an action for declaratory judgment. "None of his rights or
duties thereunder need be declared." 33 On the other hand, in United Central, We seriously
doubted if a declaratory action can be filed in relation to a contract by persons who are not
parties thereto after considering that a substantive law, more specifically Article 1311 of the Civil
Code provides that contracts take effect only between the parties." Thus, "[i]t is quite plain that
one who is not a party to a contract cannot have the interest in it that the rule requires as basis
for a declaratory relief." 34

Aside from the reason advanced herein above, this Court is in agreement with the observation
made by respondent appellate court at least insofar as the question of justiciability is concerned
Clearly then, other effective remedies are available to ATLAS—such as an action for
interpleader—to determine with finality who among BIGA COPPER, CUENCO-VELEZ and the
latter's respective assignees is entitled to the royalties it will pay later on under the operating
agreements. At this juncture, it is worthy to recall that courts should refuse to exercise its
prerogative to declare rights and to construe instruments where it would not terminate the
uncertainty or controversy which gave rise to the action or where it is not necessary and proper
at the time under all circumstances. 35

We now come to the second issue. Is the trial court divested of jurisdiction to hear and decide a
mining controversy in view of the promulgation of Presidential Decree No. 1281?
 Page 19 of 20

The answer is in the affirmative.

Tracing the development of Presidential Decree No. 1281, Justice Nocon, now Presiding Justice
of the Court of Appeals, in his separate concurring opinion on the assailed decision, thus,
correctly noted the following:

As early as January 15, 1973, PD 99-A provided where mining controversies

should be litigated: Director of Mines whose decision is appealable to the
Secretary of Agriculture and Natural Resources and finally to the President (Sec.
2). All laws in conflict or inconsistent therewith were repealed (Sec. 3). ...

The same procedure was reiterated in PD 309 (Sec. 5), issued on October 10,
1973, to accelerate disposition of mining controversies with creation (sic) of a
panel of investigators to submit a report to the Director of Mines within five days
(Sec. 1). Exclusive jurisdiction of the Bureau of Mines is implicit from Section 3
thereof which give parties in pending litigations "before any judicial tribunal" 15
days to file 'an adverse claim of any nature whatsoever with the Bureau of Mines.'

PD 1281 issued on January 16, 1978, gives more teeth to the Bureau of Mines
(Sec. 3) for its regulatory and adjudicative powers and functions which becomes
(sic) 'original and exclusive even over 'cancellation and/or enforcement of mining
contracts,' reiterating the same procedure laid down in PD 99-A and PD 309.
Clearly, the three Decrees—99-A, 309 and 1281—divested judicial tribunals of
jurisdiction over mining controversies including cancellation and enforcement of
mining contracts by making the regulatory and adjudicative functions of the
Bureau 'original and exclusive' (Sec. 7, PD 1281). 36 (Emphasis supplied).

This Court agrees with the conclusion espoused by the respondent appellate court as to this
aspect of the case.

The declaratory action flied by ATLAS is within the ambit of Presidential Decree No. 1281. It is
not an entirely different or distinct cause of action. Were We to rule otherwise it would be ratifying
two judicial bodies exercising jurisdiction over an essentially the same subject matter—a situation
analogous to split jurisdiction which is obnoxious to the orderly administration of justice. 37

Presidential Decree No. 1281 is a remedial statute. It does not create new rights or take away
rights that are already vested. It only operates in furtherance of a remedy or confirmation of rights
already in existence. It does not come within the legal purview of a prospective law. As such, it
can be applied retroactively independent of the general rule against the retrospective application
of statutes. 38 Being procedural in nature, it shall apply to all actions pending at the time of its
enactment except only with respect to those cases which had already attained the character of a
final and executory judgment. 39 Were it not so, the purpose of the Decree, which is to facilitate
the immediate resolution of mining controversies by granting jurisdiction to a body or agency
more adept to the technical complexities of mining operations, would be thwarted and rendered
meaningless. Litigants in a mining controversy cannot be permitted to choose a forum of
convenience. Jurisdiction is imposed by law and not by any of the parties to such proceedings.

Furthermore, Presidential Decree No. 1281 is a special law and under a well-accepted principle
in statutory construction, the special law will prevail over a statute or law of general
application. 40 Jurisdiction having been conferred by a special statute therefore prevails over the
jurisdiction granted by a general law. 41

Finally, as aptly observed by the respondent appellate court, it is a rule oft repeated by this Court
that the construction placed upon a law by the officials in charge of enforcing the same deserves
great and considerable weight. Unless the same would result in legal absurdity, the same should
be respected. 42
 Page 20 of 20

From the foregoing, 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.

The case of Twin Peaks Mining Association vs. Navarro, 43 while not squarely applicable to the
present case in view of the difference in the dates when the respective declaratory actions were
commenced, 44 nevertheless bolsters the conclusion We have reached thus far when it pointed
out that the promulgation of Presidential Decree No. 1281 is indicative of "[t]he trend to make the
adjudication of mining cases a purely administrative matter." 45

WHEREFORE, inasmuch as the trial court has lost jurisdiction to proceed, hear and decide the
action for declaratory relief filed by ATLAS, the summary judgment in favor of herein intervenor
Efifanio A. Anoos is declared null and void, having been rendered on February 21, 1979 when
Presidential Decree No. 1281 was already in full force and effect. The petition in intervention of
CUENCO-VELEZ is hereby dismissed for lack of merit. And, finally, the decision of the Court of
Appeals in CA-G.R. No. SP-09773 is affirmed insofar as it declared that the trial court acted with
grave abuse of discretion in proceeding with the declaratory action. No pronouncement as to
costs.

SO ORDERED.

Narvasa, Cruz, Griño-Aquino and Medialdea, JJ., concur.