K & G Mining Corporation vs. Acoje Mining Company, Incorporated and Zambales Chromite Mining Company, Incorporated

The failure to perfect an appeal within the reglementary period and in the manner prescribed by law is jurisdictional and fatal, rendering the judgment final and executory; the mistake of counsel in choosing the wrong remedy binds the client, and certiorari cannot substitute for a lost appeal.

Petitioner K & G Mining Corporation (KGMC) and respondents Acoje Mining Company, Incorporated (AMCI) and Zambales Chromite Mining Company, Incorporated (ZCMCI) are mining corporations organized under Philippine laws. The dispute concerns overlapping mining claims and the validity of an MPSA executed between respondents and the government over mining claims in Sta. Cruz, Zambales. The regulatory backdrop includes Presidential Decree No. 463, P.D. No. 1214, Executive Order No. 279, and Department Administrative Orders 1989-57 and 1990-82, which govern the award of mineral production sharing agreements.

Petitioner K & G Mining Corporation (KGMC) and respondents Acoje Mining Company, Incorporated (AMCI) and Zambales Chromite Mining Company, Incorporated (ZCMCI) are mining corporations organized under Philippine laws. In 1970, ZCMCI acquired 60 mining claims of Spouses Gonzalo and Purificacion Nava located in Sta. Cruz, Zambales, which were registered under the Act of Congress of July 1, 1902. ZCMCI filed an application for patent and availment of rights and privileges over the claims pursuant to Presidential Decree (P.D.) No. 463, which was approved by the Bureau of Mines on July 13, 1977.

On October 14, 1977, P.D. No. 1214 was promulgated requiring holders of subsisting and valid patentable mining claims to file a mining lease application within one year. ZCMCI complied by filing a lease application under protest on October 11, 1978, and questioned the constitutionality of P.D. No. 1214 before the Court, which upheld its constitutionality in G.R. No. 49143 on August 21, 1989. In the interim, Executive Order No. 279 was issued on July 25, 1987, authorizing the DENR Secretary to negotiate and conclude joint venture, co-production, or production-sharing agreements for mineral resources.

On June 11, 1988, ZCMCI entered into an operating agreement with AMCI over its 60 mining claims. On October 24, 1988 and January 10, 1989, a certain Dominador Ilagan registered mining claims denominated "Bong 1 to Bong 4" and "Bong 5 to Bong 6" with the DENR Region III, which he assigned to KGMC on May 29, 1989 and August 17, 1989. On October 5, 1989, the Mines and Geo-Sciences Bureau (MGB) informed ZCMCI that its mining lease application should be converted into a Mineral Production Sharing Agreement (MPSA) pursuant to E.O. No. 279. On June 1, 1990, KGMC filed its letter of intent to avail of an MPSA over its "Bong 1 to Bong 6" claims covering approximately 1,620 hectares.

On November 20, 1990, the DENR Secretary issued Department Administrative Order No. 82, series of 1990 (DAO 1990-82), providing procedural guidelines on the award of MPSA through negotiation. On May 21, 1991, ZCMCI, AMCI, and the government executed an MPSA covering ZCMCI's 60 mining claims with an approximate area of 540 hectares, which was approved by the Office of the President on September 5, 1991. Claiming the issuance and approval of the MPSA was highly irregular, KGMC filed a letter/protest with the Office of the President, which was referred to the DENR Secretary on October 22, 1991. KGMC alleged that AMCI and ZCMCI failed to file their application before the appropriate DENR Regional Office, failed to comply with documentary requirements and payments mandated in DAOs 1989-57 and 1990-82, and that the area covered by the MPSA conflicted with KGMC's Prospecting Permit Application. KGMC's letter-protest was eventually forwarded to the DENR Panel of Arbitrators in Region III on November 25, 1996.

In their Position Paper, ZCMCI and AMCI reiterated that the MPSA had been approved by the President and had become final and executory, and that KGMC could no longer validly oppose it. The Panel of Arbitrators ruled in favor of KGMC on April 23, 2002, finding that ZCMCI's failure to file its MPSA proposal with the MGB-DENR Region III as required made the approval of its MPSA highly irregular, and recommending its cancellation. On appeal, the MAB reversed, holding that Article 3, paragraph 3.5(b) of DAO 1989-57 did not expressly prohibit direct filing of an MPSA proposal before the MGB Central Office, and that the Panel of Arbitrators gravely abused its discretion in recommending cancellation since such power is vested only in the Secretary. The MAB declared the MPSA valid. KGMC's motion for reconsideration was denied on December 18, 2008.

KGMC received the MAB Resolution on January 9, 2009, giving it until January 24, 2009 to file a petition for review under Rule 43. Instead, on March 9, 2009, KGMC, through its previous counsel, filed before the CA a Petition for Extension of Time to File Petition for Certiorari under Rule 65. The CA denied the extension, ruling that MAB decisions are appealable via petition for review under Rule 43, not certiorari under Rule 65, and that the reglementary period had already prescribed. KGMC's motion for reconsideration was denied on June 5, 2009, prompting the present petition.

• Error of Counsel: KGMC argued that its previous counsel's failure to timely file the correct mode of appeal constituted gross negligence, which should not bind the client, citing the counsel's failure to file a Petition for Review under Rule 43, the belated filing of a Petition for Certiorari under Rule 65, failure to explain the wrong remedy, and delayed notification of the denial of the motion for reconsideration.
• Substantive Validity of the MPSA: KGMC argued that the CA gravely erred in failing to grant due course to its petition, thereby validating a patently erroneous MAB decision that approved the MPSA permits of AMCI and ZCMCI despite their failure to file their MPSA proposal with the DENR-Mines Sector of DENR Region III as required by law.
• Abandonment of Mining Claims: KGMC argued that the MPSA was awarded to AMCI and ZCMCI despite the Supreme Court having ruled that ZCMCI's mining claims were deemed abandoned for failure to maintain and introduce mandated improvements.
• Breach of MPSA Terms: KGMC argued that the MPSA was awarded to AMCI and ZCMCI even though both had defaulted and breached the terms and conditions of the MPSA and had abandoned their mining operations.

• Finality of the MPSA: ZCMCI and AMCI argued that the MPSA had already been approved by the President on September 5, 1991 and had become final and executory, and that KGMC could no longer validly oppose it.
• Qualification of Applicants: ZCMCI and AMCI asserted that KGMC was given an opportunity to submit its application with the MGB, but it was their application that was recommended as the more qualified, with ZCMCI having filed its mining claim as early as 1934 while KGMC only appeared in 1989.

• Propriety of Remedy: Whether the Court of Appeals erred in dismissing KGMC's petition for certiorari on the ground that the proper remedy to appeal a Mines Adjudication Board decision is a petition for review under Rule 43, not certiorari under Rule 65.
• Effect of Counsel's Negligence: Whether KGMC should be excused from the failure to timely perfect its appeal on the ground that its counsel's negligence was so gross as to deprive it of due process of law.

• Propriety of Remedy: No. Decisions of the MAB are appealable via a petition for review under Rule 43 of the Rules of Court, not by way of a petition for certiorari under Rule 65. Certiorari is a limited form of review and cannot be made a substitute for an appeal where the latter remedy is available but was lost through fault or negligence.
• Effect of Counsel's Negligence: No. A counsel's failure to perfect an appeal within the reglementary period is simple negligence, not gross negligence, and the mistake of counsel binds the client. KGMC was not deprived of due process because it had the opportunity to be heard and actively participated in the proceedings before the Panel of Arbitrators and the MAB.

• Propriety of Remedy: The Court held that the perfection of an appeal within the period and in the manner prescribed by law is jurisdictional, and non-compliance with such legal requirements is fatal and has the effect of rendering the judgment final and executory. The special civil action for certiorari lies only where there is no appeal nor plain, speedy and adequate remedy in the ordinary course of law. It cannot be allowed when a party fails to appeal a judgment despite the availability of that remedy. Since KGMC had the remedy of appeal under Rule 43 available but failed to perfect it within the reglementary period, the MAB Decision and Resolution effectively lapsed into finality.
• Effect of Counsel's Negligence: The Court applied the settled rule that the mistake of counsel binds the client, citing the rationale that a counsel, once retained, holds implied authority to do all acts necessary to the prosecution of the suit, and any act or omission by counsel within the scope of that authority is regarded as the act or omission of the client. The recognized exception — where the lawyer's negligence is so gross that it results in grave injustice of depriving the client of due process — was held inapplicable. First, a counsel's failure to perfect an appeal within the reglementary period is simple negligence, not gross, palpable, and reckless negligence. Second, any alleged deprivation of due process is negated by the fact that the client had the opportunity to be heard or was actually heard in the lower tribunal. The Court found that KGMC was not deprived of due process because it had the opportunity to present its side, was so heard, and actively participated in the proceedings before the Panel of Arbitrators and the MAB, including filing a memorandum, a motion for reconsideration, and a supplement thereto.

• Mistake of Counsel Binds the Client — A counsel, once retained, holds the implied authority to do all acts necessary or, at least, incidental to the prosecution and management of the suit in behalf of his client, such that any act or omission by counsel within the scope of the authority is regarded, in the eyes of the law, as the act or omission of the client himself. The exception applies only where the lawyer's negligence is so gross that it results in the grave injustice of depriving the client of due process of law. The Court applied this doctrine to hold that KGMC's counsel's failure to timely file the correct mode of appeal bound the client.
• Perfection of Appeal is Jurisdictional — The perfection of an appeal within the period and in the manner prescribed by law is jurisdictional, and non-compliance with such legal requirements is fatal and has the effect of rendering the judgment final and executory. The Court applied this doctrine to hold that the MAB Decision and Resolution had lapsed into finality due to KGMC's failure to perfect its appeal.
• Certiorari Not a Substitute for Appeal — The special civil action for certiorari is a limited form of review and is a remedy of last recourse. It lies only where there is no appeal nor plain, speedy and adequate remedy in the ordinary course of law, and cannot be allowed when a party to a case fails to appeal a judgment despite the availability of that remedy. The Court applied this doctrine to reject KGMC's attempt to resuscitate its lost appeal.

• "It is settled rule that the mistake of a counsel binds the client." — This passage states the controlling doctrine on the effect of counsel's negligence, which the Court applied to deny KGMC's petition.
• "[A] counsel, once retained, holds the implied authority to do all acts necessary or, at least, incidental to the prosecution and management of the suit in behalf of his client, such that any act or omission by counsel within the scope of the authority is regarded, in the eyes of the law, as the act or omission of the client himself." — This passage, quoted from Lagua v. Court of Appeals, articulates the rationale for the doctrine that counsel's mistake binds the client.
• "The question is not whether petitioner succeeded in defending its rights and interests, but simply, whether it had the opportunity to present its side of the controversy." — This passage defines the standard for determining whether there was a denial of due process, which the Court applied to find that KGMC was not deprived of due process.
• "Certiorari is not and cannot be made a substitute for an appeal where the latter remedy is available but was lost through fault or negligence." — This passage, quoted from Dycoco v. Court of Appeals, states the rule that certiorari cannot substitute for a lost appeal, which the Court applied to reject KGMC's remedy.

• Lagua vs. Court of Appeals, G.R. No. 173390, June 27, 2012, 675 SCRA 176 — Cited as the source of the doctrine that a counsel's act or omission is regarded as the act or omission of the client, and that the exception applies only for gross negligence.
• Building Care Corporation/Leopard Security & Investigation Agency vs. Macaraeg, G.R. No. 198357, December 10, 2012, 687 SCRA 643 — Cited for the ruling that no deprivation of due process occurs where the client was able to fully present and argue her case before the lower tribunal.
• Sofio vs. Valenzuela, G.R. No. 157810, February 15, 2012, 666 SCRA 55 — Cited for the ruling that parties who were able to participate in proceedings before lower tribunals cannot complain of denial of due process.
• Producers Bank of the Philippines vs. Court of Appeals, 430 Phil. 812 (2002) — Cited for the doctrine that rules prescribing the time within which certain acts must be done are indispensable to the orderly and speedy discharge of business, and that failure to perfect an appeal within the reglementary period is fatal.
• Dycoco vs. Court of Appeals, G.R. No. 147257, July 31, 2013, 702 SCRA 566 — Cited for the rule that certiorari cannot be made a substitute for an appeal where the latter remedy is available but was lost through fault or negligence.
• Torres vs. China Banking Corp., 624 Phil. 131 (2010) — Cited for the settled rule that the mistake of counsel binds the client.

• Rule 43, 1997 Rules of Civil Procedure — The Court held that decisions of the Mines Adjudication Board are appealable via a petition for review under Rule 43, not by certiorari under Rule 65.
• Rule 45, 1997 Rules of Civil Procedure — The provision under which KGMC filed the present petition for review on certiorari before the Supreme Court.
• Rule 65, 1997 Rules of Civil Procedure — The provision under which KGMC erroneously filed its petition for certiorari before the Court of Appeals, which the Court held was not the proper remedy.
• Presidential Decree No. 463 — The Mineral Resources Development Decree of 1974, pursuant to which ZCMCI filed its application for patent and availment of rights and privileges over its mining claims.
• Presidential Decree No. 1214 — The decree requiring holders of subsisting and valid patentable mining claims to file a mining lease application, which ZCMCI complied with under protest.
• Executive Order No. 279 — The order authorizing the DENR Secretary to negotiate and conclude joint venture, co-production, or production-sharing agreements for mineral resources, which served as the basis for the conversion of ZCMCI's mining lease application into an MPSA.
• DAO 1989-57 — The guidelines on MPSA under E.O. No. 279, which the MAB interpreted as not expressly prohibiting the direct filing of an MPSA proposal before the MGB Central Office.
• DAO 1990-82 — The procedural guidelines on the award of MPSA through negotiation, which KGMC alleged respondents failed to comply with.

Presbitero J. Velasco, Jr. (Chairperson), Lucas P. Bersamin, Martin S. Villarama, Jr., and Francis H. Jardeleza concurred in the decision.