TWIN PEAKS MINING ASSOCIATION, JOSE SANTIAGO, ROGELIO SANTIAGO, OSCAR S. TIONGCO AND BLITHAM WAGAYEN, PETITIONERS, VS. HON. PEDRO C. NAVARRO, PRESIDING JUDGE OF THE COURT OF FIR…

This certiorari and prohibition case is about the jurisdiction
of a Court of First Instance to entertain a dispute as to the enforcement of
mining contracts, a matter allegedly falling within the exclusive province of
the Bureau of Mines under section 7(c) of Presidential Decree No. 1281.

On September 1, 1978,
Philex Mining Corporation filed in the Court of First
Instance of Rizal, Pasig
Branch II a complaint against the Twin Peaks Mining Association and its four
partners.  It prayed for a judgment
declaring as valid and binding on Twin Peaks the two
agreements dated May 22, 1970
and June 25, 1971 for the
exploration, operation and exploitation of two hundred ninety lode mineral
claims located at Tuba, Benguet.  The agreements were entered into between Philex and the late geodetic engineer, Andres K. Espiritu, who represented himself to be the general manager
of Twin Peaks but who was not a partner thereof.

The firm and its four partners filed a motion to dismiss on the
grounds of lack of jurisdiction and cause of action.

The movants argued that the subject
matter of the action was outside the jurisdiction of the lower court because
the afore-cited section 7(c) of Presidential Decree No. 1281 provides that the
Bureau of Mines has “original and exclusive jurisdiction to hear and
decide cases involving” “enforcement of mining contracts due to the
refusal of the claimowner x x
x to abide by the terms and conditions thereof”.

The contention as to lack of cause of action is predicated on the
allegations in paragraphs 19 and 21 of the complaint that “Philex submitted to the Bureau of Mines an application for availment of rights and privileges under Presidential
Decree No. 463 in respect of the Twin Peaks claims” and that because
defendant firm does not recognize the binding force of the said agreements,
“the Bureau of Mines has refused to act favorably on the application of Philex for availment of rights
and privileges”.

The trial court denied the motion to dismiss.  It sustained plaintiff’s stand that the
validity of the said mining contracts is a justiciable
question that should be resolved by the courts and that the complaint states a
cause of action against the defendants.

After filing a verified answer, wherein Twin Peaks
denied having executed the said two agreements, Twin Peaks
and its four partners filed the instant special civil actions of certiorari
and prohibition, assailing the order denying their motion to dismiss.  The petition was given due course.  Vicente M. Conlu,
the officer-in-charge of the legal division of the Bureau of Mines, was asked
to appear as amicus curiae.

He agreed with petitioners’ view that the lower court has no
jurisdiction over the case, that it falls within the original and exclusive
jurisdiction of the Bureau of Mines and that the dispute in the lower court has
become moot and academic because the Assistant Director of Mines in his order
of August 16, 1978 rejected the applications of Philex
for availment of rights and privileges under
Presidential Decree No. 463 with respect to the two hundred forty-two mining
claims of the petitioners involved in the aforementioned two mining
contracts.  The Assistant Director said
that the mining claims had lapsed.

The applications were rejected because Espiritu
(who signed the contracts) was not the general manager nor a partner of Twin
Peaks and because Philex was not able to
comply with the Bureau’s demand to submit the authority of Espiritu
to sign the contracts and the authority to file the availment
applications (pp. 83-84, Rollo).

In view of the failure of Philex to
appeal from that rejection order, the Director of Mines considered it already
final and executory (pp. 85-86, Rollo).

We hold that the trial court has no jurisdiction over the case
and that the issue of whether the two contracts are valid falls within the
exclusive competence of the Bureau of Mines as clearly indicated in section
7(c) of Presidential Decree No. 1281 which took effect on January 16, 1978.

That decree revised Commonwealth Act No. 136 (the law creating
the Bureau of Mines) for the purpose of making that agency “a more potent
and effective arm of the Government in the administration and disposition of
our mineral resources and responsive to the needs of the Filipino people, in
general, and the
mining industry, in particular”.

Another objective of the revision is to clothe the Bureau of
Mines “with adequate powers to enable it to vigorously implement
Presidential Decree No. 463, otherwise known as the ‘Mineral Resources
Development Decree of 1974′” and to give it “functions, powers and
duties consistent with changing situations and existing conditions”.

Under Presidential Decree No. 1281, the Bureau of Mines has
“direct charge in the administration and disposition of the mineral lands
and mineral resources of the country” (Sec. 3[a]).*

The decree authorizes the Bureau of Mines to oversee the mining
operations of holders and operators of mining claims and to keep records of
mining locations, leases, patents, permits and licenses, and all documents and
instruments related thereto (Sec. 3[n] and [p]).

The Bureau is invested 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” (Sec. 6).

Section 7 of the same decree, already cited, confers upon the
Bureau the following quasi-judicial powers:

“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
cases involving:

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

“(b)   complaints from claimowners
that the mining property subject of an operating agreement has not been placed
into actual operations within the period stipulated therein; and

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

“All actions and decisions of the Director of Mines on the
above cases are subject to review, motu proprio or upon appeal by any person aggrieved
thereby, by the Secretary of Natural Resources whose decision shall be final
and executory after the lapse of thirty (30) days
from receipt by the aggrieved party of said decision, unless appealed to the
President in accordance with the applicable provisions of Presidential Decree
No. 309 and Letter of Instructions Nos. 119 and 135.”**

In the instant case, it is apparent that Philex
wants a judicial declaration as to the validity of the said agreements in order
that it would be able to enforce the same against Twin Peaks notwithstanding
the death of Espiritu who had signed the agreements
in behalf of Twin Peaks but who, according to the latter, was not authorized to
do so.

Thus, in a letter dated May
19, 1978, counsel for Twin Peaks advised Philex that Espiritu “was
not the general manager of Twin Peaks” and was
never authorized by the partnership to sign the contract dated May 22, 1970.

We have already stated that the Assistant Director of Mines in
his order of August 16, 1978
rejected the applications of Philex for availment of rights with respect to the mining claims in
question of Twin Peaks.

Instead of directly litigating in the Bureau of Mines the
enforceability of its mining contracts with Twin Peaks
(assuming that that remedy is still available), Philex
filed a complaint for declaratory relief and damages against Twin
Peaks.  The form of that
action cannot camouflage the fact that the ultimate objective of Philex is to enforce the said contracts.

It should be underscored that Philex’s
initial attempt to attain that objective failed when the Assistant Director of
Mines rejected its applications for availment of
rights with respect to the said claims under Presidential Decree No. 463.  That application of Philex
is an implied admission that the Bureau of Mines is the proper agency vested
with adjudicatory jurisdiction for the enforcement of the disputed mining
contracts.

And it is noteworthy that the trend is to make the adjudication
of mining cases a purely administrative matter. 
Thus, it cannot escape notice that under section 61 of the Mining Law,
Commonwealth Act No. 137, as amended by Republic Acts Nos. 746 and 4388,
appeals from the decision of the Secretary of Agriculture and Natural Resources
(now Minister of Natural Resources) on conflicts and disputes arising out of
mining locations may be made to the Court of Appeals or the Supreme Court, as
the case may be.

In contrast, under the decrees issued since the onset of martial
law, it is expressly provided that the decisions of the same
Secretary (now Minister) in mining cases are now appealable
to the President of the Philippines under Section 50 of the Mineral
Resources Development Decree of 1974 and section 7 of Presidential Decree No.
1281 in relation to Presidential Decree No. 309.

WHEREFORE, the writ of prohibition is granted and the
lower court’s order denying the motion to dismiss is reversed and set
aside.  It is directed to dismiss the
complaint in Civil Case No. 30672 for lack of jurisdiction.  No costs.

SO ORDERED.

Barredo, (Chairman), Antonio, Santos,
and Abad
Santos, JJ., concur.

Concepcion, Jr., J., no part.

* See Presidential Decree No. 99-A,
69 O. G. 2668-23, which took effect on January 15, 1973, as to the power of the
Director of Mines to issue an order for the original locator’s right to possess
and exploit a mining claim notwithstanding the pendency
in the court of a case involving conflicting or overlapping mining claims.

** Presidential Decree No. 309,
which took effect on October 10, 1973, and Letters of Instructions Nos. 119 and
135, dated August 25 and October 11,
1973, respectively, provide for the creation of a panel of
investigators in the Bureau of Mines and in the Department of Agriculture and
Natural Resources (now Ministry of Natural Resources) for the adjudication of
conflicts regarding mining claims.