G.R. No. 78569 ; February 11, 1991
EARTH MINERALS EXPLORATION, INC., petitioner, vs. DEPUTY EXECUTIVE SECRETARY CATALINO MACARAIG, JR., OFFICE OF THE PRESIDENT, MALACAÑANG, MANILA, BUREAU OF MINES DIRECTOR BENJAMIN A. GONZALES, AND PHILZEA MINING AND DEV. CORP., respondents.

FACTS

Zambales Chromite Mining Co., Inc. owned ten patentable chromite mining claims. On September 11, 1980, it entered into a “Contract of Development, Exploitation and Productive Operation” with private respondent Philzea Mining and Development Corporation. During this contract’s term, Zambales Chromite also executed an “Operating Agreement” with petitioner Earth Minerals Exploration, Inc. on August 10, 1984, covering the same mining area. This created a situation where the mining property was subject to agreements with two different operators.
Consequently, Earth Minerals filed a petition with the Bureau of Mines and Geo-Sciences (BMGS) for the cancellation of the contract between Zambales Chromite and Philzea Mining, alleging that Philzea committed grave violations such as failure to produce the agreed ore volume, pay taxes, and develop the area. The BMGS, after Philzea failed to file an answer despite orders, rendered a decision on July 23, 1985, cancelling Philzea’s contract. Philzea appealed this BMGS decision to the Ministry of Natural Resources (MNR).

ISSUE

Whether the Office of the President acted with grave abuse of discretion in setting aside the orders of the MNR and BMGS that upheld the cancellation of Philzea’s mining contract.

RULING

Yes. The Supreme Court granted the petition, reversing the Office of the President. The legal logic centers on the doctrine of primary jurisdiction and the rule against forum-shopping. The BMGS had original and exclusive jurisdiction under Section 7 of P.D. 1281 to hear and decide cases involving a mining property subject to different agreements with several operators and the cancellation of mining contracts. The BMGS properly acquired jurisdiction and proceeded to decide the case on its merits after Philzea’s failure to file an answer. Philzea’s act of filing a petition for certiorari with the then Intermediate Appellate Court (now Court of Appeals) while its administrative appeal on the same matter was pending with the MNR constituted forum-shopping. This is a manipulative tactic seeking a favorable opinion in another forum in anticipation of an unfavorable ruling, which undermines administrative processes. The Court also found that the petition was not moot despite the expiration of Earth Minerals’ initial contract, as a subsequent mining agreement with a third party expressly obligated Earth Minerals to continue pursuing this case to assure peaceful possession of the properties. Therefore, the orders of the BMGS and MNR cancelling Philzea’s contract were reinstated.