G.R. No. L-15809. August 30, 1961.
ATLAS CONSOLIDATED MINING AND DEVELOPMENT CORPORATION, petitioner, vs. THE HON. JOSE M. MENDOZA, Judge of the Court of First Instance of Cebu, 14th Judicial District, Branch VI, and CONSTANCIA D. VEGA, respondents.

FACTS

Petitioner Atlas Consolidated Mining filed a Lode Lease Application with the Director of Mines. Respondent Constancia D. Vega asserted an adverse claim over the same area, alleging ownership of prior mining claims. The Director of Mines advised Vega that her adverse filing was premature, as the statutory notice for Atlas’s application had not yet been published. The Director instructed her that the proper initial recourse was to file a verified protest under Section 61 of the Mining Act.
Instead of following this administrative procedure, Vega directly instituted a civil action in the Court of First Instance of Cebu against Atlas. Her complaint sought a declaration of her ownership, the nullity of Atlas’s claims, injunctive relief, and damages. Atlas moved to dismiss, arguing the court lacked jurisdiction because the dispute fell under the original and exclusive jurisdiction of the Bureau of Mines and Vega had failed to exhaust administrative remedies. The trial court denied the motion and set the case for trial, prompting Atlas to file this petition for prohibition.

ISSUE

Whether the Court of First Instance lacks jurisdiction over the civil case due to Vega’s failure to exhaust the administrative remedies provided under the Mining Act.

RULING

The Supreme Court dismissed the petition, ruling that the trial court possessed jurisdiction. The Court clarified the dual procedures under the Mining Act for resolving mining conflicts. Section 61 governs disputes arising before the publication of a lease application, requiring submission to the Director of Mines, with appeals to the Secretary of Agriculture and Natural Resources and then to the courts. Sections 72 and 73 govern adverse claims filed during the publication period, which, once filed, require the aggrieved party to commence a court action, thereby staying the administrative proceedings.
The case fell under the first scenario (Section 61), as Vega’s claim was asserted before publication. Consequently, Vega was legally bound to initially pursue the administrative protest procedure. Her failure to do so constituted a defect in her cause of action, not a jurisdictional flaw depriving the court of its authority over the subject matter. The Supreme Court reiterated established doctrine that the exhaustion of administrative remedies is a condition precedent for a cause of action; its non-compliance affects the plaintiff’s right to relief but does not oust the court of its inherent jurisdiction. Therefore, prohibition did not lie to restrain the trial court from proceeding with the case.