Earth Minerals Exploration, Inc. v. Deputy Executive Secretary Catalino Macaraig, Jr.
REITERATIONFacts
1. The Antecedents: Zambales Chromite Mining Co., Inc. (Zambales Chromite) owned ten chromite mining claims. On September 11, 1980, Zambales Chromite entered into a "Contract of Development, Exploitation and Productive Operation" with Philzea Mining and Development Corporation (Philzea Mining) for these claims. Subsequently, on August 10, 1984, Zambales Chromite entered into an "Operating Agreement" with Earth Minerals Exploration, Inc. (Earth Minerals) for the same mining area, creating a situation where two separate operators had agreements for the same property. 2. Procedural History: Earth Minerals filed a petition with the Bureau of Mines and Geo-Sciences (BMGS) to cancel the contract between Zambales Chromite and Philzea Mining, alleging violations such as failure to produce ore, pay taxes, and establish necessary facilities. Philzea Mining's motion to dismiss was denied, and its subsequent appeal to the Minister of Natural Resources (MNR) was also dismissed as interlocutory. Philzea Mining appealed to the Office of the President, but the MNR later dismissed Philzea Mining's appeal of the BMGS decision. Philzea Mining appealed this dismissal to the Office of the President. The Intermediate Appellate Court also dismissed Philzea Mining's petition for certiorari. The Deputy Executive Secretary, in a decision dated June 27, 1986, set aside the orders of the MNR and BMGS. A motion for reconsideration by Earth Minerals was denied by the Deputy Executive Secretary on May 5, 1987. 3. The Petition: This petition for Certiorari and Prohibition seeks to reverse the June 27, 1986 decision and May 5, 1987 resolution of the Deputy Executive Secretary. The core arguments revolve around whether Philzea Mining's appeal to the Office of the President was timely filed, considering the intervening weekend and holidays, and whether Earth Minerals, as a non-party to the original contract, had the legal standing to seek its cancellation. The petition also highlights Philzea Mining's alleged forum shopping by pursuing both an appeal and a certiorari petition simultaneously. The Supreme Court is asked to reinstate the orders of the BMGS and MNR that cancelled the operating agreement.
Issue(s)
Whether the appeal of Philzea Mining to the Office of the President from the MNR's November 7, 1985 decision was filed out of time. Whether Earth Minerals is the proper party to seek the cancellation of the operating agreement between Zambales Chromite and Philzea Mining. Whether the filing of a petition for certiorari with the Intermediate Appellate Court while an appeal was pending before the Office of the President constituted forum shopping.
Ruling
The petition is granted. The decision dated June 27, 1986, and resolution dated May 5, 1987, of the Deputy Executive Secretary are reversed and set aside. The orders of the Bureau of Mines and Geo-Sciences dated July 23, 1985, and the Minister of Natural Resources dated November 7, 1985, are reinstated.
Ratio Decidendi
On the timeliness of the appeal: The Court held that the appeal filed by Philzea Mining was timely. The MNR's decision was dated November 7, 1985, and Philzea Mining received it on November 11, 1985. The five-day reglementary period for appeal would have ended on November 16, 1985. However, November 16, 1985, was a Saturday, and November 17, 1985, was a Sunday. Pursuant to Section 31 of the Revised Administrative Code, when the last day for doing an act falls on a holiday, the act may be done on the next succeeding business day. Therefore, the appeal filed on November 18, 1985 (Monday) was within the reglementary period. The Court cited Atlas Consolidated Mining and Development Corporation v. Factoran, Jr. and other cases to support this interpretation of holiday rules. On whether Earth Minerals is the proper party: The Court found the contention that Earth Minerals is not the proper party to be untenable. While Article 1311 of the Civil Code states that a contract takes effect only between the parties, an exception exists where a person not bound by the contract is prejudiced in his rights by its existence. Earth Minerals, as a subsequent operator of the same mining area under a separate agreement with the claim owner, was prejudiced because the continued existence of the contract between Zambales Chromite and Philzea Mining prevented Earth Minerals from performing its own obligations and deriving benefits. The Court reiterated the ruling in Teves v. People's Homesite and Housing Corporation that a person prejudiced by a contract may seek its annulment even if not a party thereto. The BMGS's initial finding of a "color of right" on the part of Earth Minerals was also noted. On forum shopping: The Court found that Philzea Mining engaged in forum shopping. After filing a notice of appeal to the MNR from the BMGS decision on July 23, 1985, Philzea Mining also filed a petition for certiorari with the Intermediate Appellate Court on July 30, 1985, seeking to annul the same decision. Furthermore, after the MNR affirmed the BMGS decision on November 7, 1985, Philzea Mining appealed to the Office of the President while its certiorari petition was still pending, explicitly stating that the appeal was "without prejudice to the pending petition with the Intermediate Appellate Court." The Court defined forum shopping as seeking a favorable opinion in another forum as a result of an adverse opinion in one, and stated that it applies to cases where a court litigation is commenced while an administrative proceeding is pending, to defeat administrative processes. The Court cited Crisostomo v. Securities and Exchange Commission.
Main Doctrine
A party not directly bound by a contract may seek its annulment if prejudiced by its continued existence, and the filing of appeals in multiple forums for the same cause of action constitutes forum shopping.