Benguet Corporation vs. Leviste

Actions seeking cancellation and/or enforcement of mining contracts due to the refusal of the claimowner/operator to abide by the terms and conditions thereof fall within the original and exclusive jurisdiction of the Bureau of Mines and Geo-Sciences under Section 7(c) of P.D. No. 1281, regardless of the ground invoked for cancellation. Applied to private respondent's suit to declare null and void the Operations Agreement between Dizon Mines and Benguet, jurisdiction pertained to the Bureau rather than the regional trial court.

Benguet Corporation and Dizon Copper-Silver Mines, Inc. are mining companies engaged in exploration, development and exploitation, while Helen Dizon-Reyes is the claimowner of eleven lode mining claims in Zambales covered by operating arrangements with Dizon Mines. 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 and operators insofar as mining activities are concerned, conferring upon it original and exclusive jurisdiction over specified mining disputes.

On January 15, 1967, Helen Dizon-Reyes, claimowner of eleven mining claims in Zambales, executed a Special Power of Attorney constituting her father, Celestino M. Dizon, as attorney-in-fact with full powers to transfer, assign and dispose of her claims. Soon thereafter, on January 21, 1967, Celestino M. Dizon, acting for private respondent and other claimowners, entered into an Agreement with Dizon Copper-Silver Mines, Inc. granting the latter the right to explore, develop, exploit and operate fifty-seven mining claims owned by the claimowners, including private respondent's eleven claims.

Seven years later, on December 17, 1974, private respondent and the other claimowners executed a Deed of Ratification of Assignment confirming the assignment, transfer and conveyance to Dizon Mines and its assigns and successors of the rights to possess, occupy, explore, develop and operate all the mining claims. On March 1, 1975, private respondent revoked the Special Power of Attorney of January 15, 1967, stating that while she retained complete trust in her father, she did not wish to add to his mounting problems. Notice of revocation was served on Dizon Mines on March 20, 1975 and on Benguet on August 26, 1975. Notwithstanding said notices, on September 6, 1975, Dizon Mines and Benguet entered into an Operations Agreement whereby the former transferred to the latter possession of the fifty-seven mining claims for exploration, development, operation, production and marketing under specified terms.

On June 20, 1980, private respondent commenced Civil Case No. Q-30171 before the Regional Trial Court of Quezon City against Benguet and Dizon Mines. She claimed the Operations Agreement lacked legal basis by reason of (a) the revocation of Celestino Dizon's special power of attorney, (b) the obligation imposed by the January 21, 1967 Agreement on Dizon Mines to itself operate the mines after raising needed capital, without authority to engage another corporation, and (c) the inefficacy of the Deed of Ratification arising from Celestino Dizon's physiological incapacity to consent thereto. She prayed that the Operations Agreement be declared null and void and inoperative insofar as her eleven lode mining claims, or in the alternative that defendants be ordered to observe the profit-sharing stipulated in the 1967 Agreement, plus attorney's fees and litigation expenses.

Benguet moved to dismiss on jurisdiction, prior judgment and laches, prescription, and improper venue, and Dizon Mines filed its own motion to dismiss. After opposition and reply, the trial court denied the motions for lack of merit and denied reconsideration, leading Benguet to seek relief from the Supreme Court reiterating the four dismissal grounds.

• Jurisdiction: Petitioner argued that the RTC has no jurisdiction over Civil Case No. Q-30171, as jurisdiction over actions to cancel mining contracts is vested exclusively in the Bureau of Mines and Geo-Sciences under Section 7(c) of P.D. No. 1281, as sustained in Twin Peaks Mining Association vs. Navarro and Philex Mining Corp.
• Res Judicata and Laches: Petitioner maintained that the March 17, 1976 decision of the Secretary of Natural Resources on private respondent's opposition to registration of the Operations Agreement had become final for failure to appeal to the Office of the President and constitutes res judicata on validity, and that private respondent's failure to take seasonable action led Benguet to believe she was amenable thereto and to incur huge development expenses.
• Prescription: Petitioner maintained that the action to annul the Deed of Ratification, upon which the validity of the Operations Agreement necessarily depends, should have been brought within four years from its execution on December 12, 1974, so the complaint filed June 20, 1980 came too late.
• Venue: Petitioner theorized that since annulment of the mining contract necessarily involves recovery of possession of mining claims located in Zambales, venue should have been laid in Zambales.

• Jurisdiction: Respondent countered that while the contract sought to be annulled is a mining contract, its annulment does not fall under Bureau jurisdiction because Section 7(c) contemplates a valid and binding mining contract where a party refuses to comply with its terms, whereas here the contract is null and void due to the mental incapacity of Celestino Dizon to execute the Deed of Ratification, a question of mental capacity the Bureau is not equipped to determine.
• Venue and Nature of Action: Respondent argued that the case does not affect title to or possession of real property and is therefore not a real action but an action in personam, for which venue is properly laid in plaintiff's residence.

• Jurisdiction: Whether the RTC has jurisdiction over an action for annulment of an operations agreement between two mining companies, or whether exclusive jurisdiction lies with the Bureau of Mines and Geo-Sciences under Section 7(c) of P.D. No. 1281.
• Res Judicata and Laches: Whether the action is barred by the final decision of the Secretary of Natural Resources and by laches.
• Prescription: Whether the action to annul the Deed of Ratification has prescribed, having been filed more than four years after execution.
• Venue: Whether venue was improperly laid in Quezon City instead of Zambales where the mining claims are located.

• Jurisdiction: No. The action for annulment of the mining Operations Agreement falls within the original and exclusive jurisdiction of the Bureau of Mines and Geo-Sciences under Section 7(c) of P.D. No. 1281.
• Res Judicata and Laches: Unresolved. No ruling was made, these being factual matters improper in certiorari and unsubstantiated by petitioner.
• Prescription: Unresolved. No ruling was made, prescription being a factual matter improper in certiorari and unsubstantiated by petitioner.
• Venue: Immaterial. With jurisdiction found to pertain to the Bureau rather than the RTC, the question of venue need not be passed upon.

• Jurisdiction: P.D. No. 1281 vests the Bureau with supervision and control over mining claim holders and operators and confers quasi-judicial power over cancellation and/or enforcement of mining contracts due to refusal to abide by terms. The subject agreement is undisputedly a mining contract, and private respondent in seeking judicial declaration of nullity does not wish to abide by its terms, bringing the action within Section 7(c). Whatever the basis for refusal, the basic issue remains cancellation, precisely placed within Bureau exclusive original jurisdiction, consistent with the trend to make mining adjudication purely administrative.
• Res Judicata and Laches: The petition for certiorari was deemed an improper vehicle for resolving defenses turning on factual substantiation. Petitioner was found to have failed to substantiate res judicata and laches, so adjudication thereof was withheld.
• Prescription: Prescription was likewise treated as a factual matter not properly resolved in certiorari proceedings. In the absence of substantiation by petitioner, no determination on the four-year period was rendered.
• Venue: Once exclusive Bureau jurisdiction was established and dismissal of the RTC case ordered, determination of whether the action was real or personal and where venue properly lay was rendered unnecessary.

• Exclusive Bureau jurisdiction over mining contract cancellation/enforcement — Section 7(c) of P.D. No. 1281 grants the Bureau of Mines original and exclusive jurisdiction to hear and decide cases involving cancellation and/or enforcement of mining contracts due to refusal of the claimowner/operator to abide by terms and conditions thereof. Applied here, the RTC suit to nullify the Operations Agreement was ordered dismissed because the agreement was a mining contract and plaintiff sought non-compliance with its terms.
• Irrelevance of ground for refusal to jurisdictional competence — Whatever the basis for refusal to abide by a mining contract, the basic issue remains cancellation within Bureau jurisdiction; making jurisdiction depend on the reason invoked would ratify split jurisdiction and defeat the statutory objective. Applied here, allegations of revoked authority, non-delegable operation, and incapacity did not remove the case from the Bureau even though framed as nullity.
• Administrative adjudication of mining cases; proscription of split jurisdiction — The trend under P.D. No. 1281 is to make adjudication of mining cases a purely administrative matter, and dividing essentially the same subject matter between two judicial bodies is obnoxious to orderly administration of justice. Applied here, the absence of statutory exceptions to Section 7(c) precluded restricting Bureau jurisdiction to enforcement disputes over concededly valid contracts, as in Atlas Consolidated Mining and Development Corp. vs. Court of Appeals and Twin Peaks Mining Association vs. Navarro.

• "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:" — States the statutory grant of quasi-judicial power upon which exclusive Bureau jurisdiction rests.
• "(c) cancellation and/or enforcement of mining contracts due to the refusal of the claimowner/operator to abide by the terms and conditions thereof." — Defines the specific jurisdictional category held to embrace the annulment suit.
• "Whatever the basis for the refusal to abide by the contract's terms 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." — Articulates the ratio that the pleaded ground for nullity does not alter jurisdictional competence.
• "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" — States the policy against dividing mining disputes between regular courts and the Bureau.

• Twin Peaks Mining Association vs. Navarro and Philex Mining Corp., G.R. No. L-49835, December 18, 1979, 94 SCRA 768 — Followed as authority that the objectives of P.D. No. 1281, particularly Section 7, reflect a trend to make adjudication of mining cases a purely administrative matter.
• Atlas Consolidated Mining and Development Corp. vs. Court of Appeals, G.R. No. 54305, February 14, 1990, 182 SCRA 166 — Reiterated and followed for the same trend and for the proscription of split jurisdiction over essentially the same subject matter.
• Gonzales vs. Province of Iloilo, 38 SCRA 209 (1971) — Cited through Atlas for the proposition that split jurisdiction is obnoxious to the orderly administration of justice.

• Section 7(c), Presidential Decree No. 1281 — Confers upon the Bureau of Mines original and exclusive jurisdiction over cancellation and/or enforcement of mining contracts due to refusal to abide by terms; applied to hold that the RTC could not entertain the annulment of the Operations Agreement.
• Section 6, Presidential Decree No. 1281 — Vests the Bureau 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, including mining service contracts and contractors insofar as mining activities are concerned; cited as the general jurisdictional backdrop for Section 7 powers.

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