Nature and Purpose of Environmental Laws in the Philippines

WEST TOWER CONDOMINIUM v. FIRST PHILIPPINE INDUSTRIAL CORPORATION, Velasco J., GR No. 194239,
June 16, 2015
FACTS:
Respondent FPIC operates two pipelines, the White Oil Pipeline System (WOPL). These pipelines transport 60% of the
petroleum requirements of Manila, Bulacan, Laguna, and Rizal. However, a leakage from one of the pipelines was
suspected by residents of West Tower Condominium who started to smell the gas. A search was made and a fuel leak
was found from the wall in the basement. Eventually, the condominium was ordered shut down to prevent the discharge
of contaminated water into the drainage system of Barangay Bangkal. The fumes also compelled residents of West
Tower to abandon their units.
Thus, West Tower filed a Petition for the Issuance of a Writ of Kalikasan on behalf of its residents and the
surrounding communities of Barangay Bangkal. A Writ of Kalikasan with Temporary Environmental Protection Order
(TEPO) requiring respondents to desist from operation the WOPL.
Petitioners filed their Motion for Reconsideration asking that the TEPO be converted into a Permanent
Environmental Protection Order (TEPO), and that a trust fund be constituted for future similar contingencies.
Respondent, FPIC claims that regular testing as well as the measures that are already in place, will sufficiently
address any oil leaks from the WOPL. It claimed it has regular scraper runs, pipeline integrity gauge tests, in-line
inspections every five years, among others.

ISSUE/S:
 Whether a Permanent Environmental Protection Order (PEPO) should be issued to direct the respondents to
perform or desist from performing acts in order to protect, preserve, and rehabilitate the environment.
 Whether a special trust fund be created to answer for future contingencies.

RULING: Respondent FPIC is directed to restore and rehabilitate the affected Barangay Bangkal environment until
restored to its condition prior to the leakage. Petitioner’s request to create a special trust fund to answer for similar
contingencies in the future is denied.

On the issue of converting the TEPO to a PEPO

The tests and measures are inconclusive and insufficient for purposes of leak detection and pipeline integrity
maintenance. Thus, this Court required FPIC to obtain from DOE a certification that the WOPL is already safe for
commercial operation. This is proper considering the core issue of the case requires the specialized knowledge and
special expertise of the DOE and various other administrative agencies.
DOE thus issued a letter prescribing activities, and measures and the conditions for the resumption of the
commercial operations of the WOPL. This, coupled with the submission of the DOE of its activities and timetable is a
clear message from the DOE that the WOPL’s soundness is not yet determined. The Court leaves it to the DOE. If it
finds that it is satisfied with the results, the DOE shall issue an order allowing FPIC to resume operation of the WOPL.
ON the other hand, should it be found the pipeline is no longer safe, closure of the WOPL may be ordered.

On the issue of a trust fund

Rules of Procedure for Environmental Cases, a trust fund is limited solely for the purpose of restoring or
rehabilitating the environment that has presumably suffered. However, the petitioner’s prayer is but a claim for damages.
Thus, creation of a special trust fund is misplaced. Sec. 15(e), Rule 7 of the Rules for Procedure for Environmental Cases
expressly prohibits the grant of damages to petitioners in a petition for the issuance of a Writ of Kalikasan. Instead, the
reliefs under the writ include such other reliefs which relate to the right of the people to a balanced and healthful ecology
or to the protection, preservation, rehabilitation, or restoriation of the environment, except the award of individual damages
to individual petitioners.
BENGUET CORPORATION v. HON. LEVISTE, RTC Judge, HELEN DIZON-REYES

1. Helen Dizon-Reyes (“Reyes”) claims to be the claimowner of 11 mining claims in Zambales

2. 1967, Reyes executed a Special Power of Attorney granting her father Celestino full powers to "transfer, assign and
dispose of her 11 mining claims”
3. 1967, Celestino, thru the SPA, granted Dizon Mines right to explore, develop, exploit and operate 57 mining claims
(including Helen’s 11)
4. 1974, Reyes executed Deed of Ratification of Assignment confirming the transfer of rights to Dizon
5. March 1975, Helen revoked the Deed of Ratification, notified Dizon Mines of this fact
6. Sept. 1975, Dizon Mines and Benguet Corp. entered into an Operations Agreement — Dizon Mines transferred to
Benguet Corp. the mining claims
7. Reyes filed a complaint against Dizon Mines and Benguet Corp. before RTC Quezon City, praying to nullify the
Operations Agreement — ground, amongst others: since she already revoked the Ratification, the Operations
Agreement has no legal basis
8. 1980, Benguet filed Motion to Dismiss — on grounds:
1. TOPIC: RTC has no jurisdiction
2. NON-TOPIC: res judicata (there was this previous SENR decision upholding the Operations Agreement
which Reyes failed to appeal); laches; prescription; improper venue (filed with RTC QC, mining claims are in
Zambales)
9. RTC - DENIED Benguet’s Motion to Dismiss
10. Benguet filed instant Petition for Certiorari
11. Reyes defenses before SC -- pagsasadula: “yes I concede this involves a mining contract, but my ground for
cancellation is the mental incapacity of my father in transferring to Dizon Mines (in the first place) my 11 mining
claims, which invalidates the first and all subsequent transfers; Bureau of Mines and Geo-Sciences is not equipped to
determine the question of mental capacity of my papa.”

ISSUE: who has jurisdiction over the complaint?

HELD: The Bureau of Mines, not the RTC, has jurisdiction

JURISDICTION AND AUTHORITY

- Presidential Decree No. 1281 (took effect January 16, 1978) vests the Bureau of Mines 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 thereof, including mining service contracts and service contractors insofar as
their mining activities are concerned.
QUASI-JUDICIAL POWERS
- Section 7 of P. D. No. 1281 confers upon the Bureau quasi-judicial powers as follows:
"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 cases involving:
"(c) cancellation and/or enforcement of mining contracts due to the refusal of the
claimowner/operator to abide by the terms and conditions thereof.”
- Twin Peaks Mining Association (reiterated in Atlas Consolidated Mining Development Corp. vs. CA) — the
trend is to make the adjudication of mining cases a purely administrative matter.
IN THIS CASE:
- ELEMENTS to bring the action under SEC 7 are present
o agreement is a mining contract
o Helen wishes to nullify/cancel it
o in seeking its cancellation, Helen does not wish to abide by its terms and conditions
- The reason underlying such refusal is an irrelevant matter insofar as jurisdictional competence is
concerned — REASON why irrelevant:
o to make jurisdiction dependent thereon would not only be “ratifying two judicial bodies (split jurisdiction)
exercising jurisdiction over an essentially the same subject matter” and would “clearly ignore the object of
P.D. 1281 to make the adjudication of mining cases a purely administrative matter”
CONCLUSION: Petition granted. Helen’s complaint is DISMISSED.

OTHER ISSUES:
- question on venue — immaterial since RTC has no jurisdiction
- res judicata, laches, prescription — improper in petition for certiorari, also unsubstantiated
APEX MINING CO. VS. GARCIA

1. The controversy in this case involves conflicting mining claims between herein petitioners Apex Mining Co., Inc., et al.
(APEX) and private respondent Marcopper Mining Corporation (MARCOPPER).
a. disputed area is inside a timberland area located in Davao del Norte and Davao Oriental, consisting of 4,941
hectares
2. MARCOPPER was one of the first mining claimants in the disputed area, having registered its 16 claims through the
filing of declarations of location pursuant to the Mineral Resources Development Decree.
a. However, after registering its mining claims, MARCOPPER learned from the central office of the Bureau of
Forest Development (BFD) that the disputed area is within an existing forest reservation known as the
"Agusan-Davao-Surigao Forest Reserve"
b. Realizing the invalidity of its mining claims for having availed of a wrong procedure, abandoned its 16 mining
claims and applied for a prospecting permit instead with the BFD.
i. BFD issued to it a Permit to Prospect
c. Discovering strong evidence of mineral deposits in the area, it applied for a permit to explore with the then
Bureau of Mines and Geo-Sciences (BMGS).
i. It was issued Permit to Explore No. 133
3. However, upon verification from the records of the BMGS, Davao City Mineral District Office, it found that the area
covered by its Permit to Explore No. 133 is also the subject of several claims/declarations of APEX.
a. MARCOPPER filed with the BMGS a "Petition for Cancellation of Mining Claims and/or Small Scale Mining
Permits" against APEX, alleging that:
i. The area covered by its Permit to Explore No. 133 and the declarations of locations/mining claims
belonging to APEX are within an established and existing forest reservation
ii. said mining claims/declarations of location of APEX are invalid for being violative of PD. 463 since the
acquisition of mining rights within a forest reserve is through the filing of application for a permit to
prospect with the BFD and not through registration of declarations of location with the BMGS
4. APEX filed a Motion to Dismiss Marcopper's petition, alleging that:
a. their mining claims are not within any established or proclaimed forest reserve, and as such, the acquisitions
of mining rights thereto must be undertaken through the registration of declaration of location with the BMGS
and not through the filing of an application for permit to prospect with the BFD;
5. BMGS issued an Order granting the Motion to Dismiss filed by APEX
6. MARCOPPER appealed to DENR whereby the decision of BMGS was reversed and set aside and declared:
a. that Permit to Explore No. 133 of MARCOPPER is valid and subsisting
b. that the mining claims of appellees APEX, et al., as well as Small Scale Mining Permit Nos. (are hereby
declared null and void and/or inoperative.
7. APEX filed an Appeal to the Office of the President which was denied
8. Hence, this Petition.
9. APEX argues that:
a. the subject area is not situated within a forest reserve and that Proclamation No. 369 did not establish a forest
reservation.
b. The said proclamation merely withdrew from settlement or disposition certain tracts of land described therein
situated in the Province of Davao, Agusan and Surigao.
c. Proclamation No. 369 could not have, as a matter of law, established a forest reserve for the simple reason
that it was issued on the basis of Section 8 of Act 2874 which empowers the Governor-General only to
reclassify lands of the public domain.

ISSUE:
Whether or not the disputed area is within an established and existing forest reservation and is not within the jurisdiction
of BMGS

RULING:
YES.

1. Section 8 of Act No. 2874, the former Public Land Act, the basis of Proclamation No. 369 provides that the Governor-
General was specifically empowered not only to declare lands of public domain open to disposition but also to
suspend their concession or disposition.
2. Accordingly, withdrawal of a certain area to establish a forest reserve is, without question, within the power of the
Governor-General.
 a. The then Governor-General Dwight F. Davis, in issuing Proclamation No. 369, withdrew from settlement or
disposition the tracts of land described therein to establish a forest reserve.
3. Moreover, then President Carlos P. Garcia confirmed that Proclamation No. 369 did establish a forest reserve when
he issued an May 8, 1959 Proclamation No. 583 entitled "Excluding From the Operation of Proclamation No. 369,
Dated February 27, 1931, Which Established The Agusan-Davao-Surigao Forest Reserve, Certain Parcels of Land
Embraced Therein, And Declaring the Same Open to Disposition Under the Provisions of the Mining Act."
4. Hence, The disputed areas, being clearly within a forest reserve, are not open to mining location.
5. Additionally, Sections 8 and 13 of P.D. No. 463, as amended by P.D. No. 1385, provides that: “No prospecting and
exploration shall be allowed:
a. In military, or other Government reservations except when authorized by the proper Government agency
concerned;”

IN THE CASE AT BAR—MARCOPPER COMPLIED WITH THE PROCEDURAL REQUISITES

6. Pursuant to P.D. No. 463, as amended, one can acquire mining rights within forest reserves by initially applying for a
permit to prospect with the Bureau of Forest and Development (BFD) and subsequently for a permit to explore with
the Bureau of Mines and Geo-Sciences (BMGS).
7. Such procedural requisites were complied with and undertaken by MARCOPPER after it had ascertained that
its mining claims were found to be within the Agusan-Davao-Surigao Forest Reserve.
8. On the other hand, the mining claims and SSMPs of APEX being located within said forest reserve are in violation of
the law and therefore result in a failure to validly acquire mining rights.
ATLAS CONSOLIDATED MINING & DEVELOPMENT CORPORATION vs CA - Mines and Geosciences Bureau

 An agreement was entered upon by Atlas Mining and the heirs of Manuel Cuenco and Jose P. Velez wherein Atlas,
in exchange of royalties, will be granted the right to develop, explore and operate 12 mining claims belonging to the
Cuenco-Velez located at Toledo, Cebu.
 Atlas also entered into an agreement with Biga Copper Mines Exploration Company for 31 mining claims of Biga
Copper, a partnership composed of the Biga Partners (Gorrosins and a Garaygay)
 It appears, however, that of the total mining claims "leased" by ATLAS from both the CUENCO-VELEZ and BIGA
COPPER, nine (9) mining claims overlap.
 These overlapping mines claims became a subject of Administrative Matter to which the Director of Mines resolved it
in favour of Cuenco-Velez. It was likewise affirmed by the Secretary Agriculture and Natural Resources upon appeal.
The latter’s decision was appealed to the Office of the President.
 During the pendency of the appeal in the Office of the President, Cuenco-Velez and Biga Copper entered into a
compromise agreement wherein it enabled Biga Copper to lay claim over the overlapping mining claims. (Lay claim
means to assert their right)
 Atlas received numerous letters from third parties claiming that they were assignee. They claim that as assignees
they are legally entitled to receive the corresponding royalties from the mining operation. In effect, they ask ATLAS
that they be substituted to the rights of BIGA COPPER and the BIGA PARTNERS under the operating agreement.
 A certain Escano likewise wrote Atlas informing the latter that he is an assignee of the 3 mining claims of Cuenco-
Velez. (SO TUNGOD SA KA DAGHAN NGA PARTIES AND SA AGREEMENTS NAG LIBOG SI ATLAS KUNG ASA
SIYA MO BAYAD SA ROYALTIES. WHETHER SA BIGA, CUENCO VELEZ OR SA THIRD PARTIES SO NI ASK
SIYA OG DECLARATORY RELIEF)
 Atlas filed a declaratory relief before the CFI to clarify:
(1) whom to pay the royalties
(2) should the compromise agreement entered into by Biga and Cuenco-Velez be honoured even before the
approval of the President.
(3) who of the assignees are entitled to royalties.
 The respondents (Biga, Cuenco-Velez and assignees) moved to dismissed on January 18, 1978 (2 days after the
promulgation of the PD) the declaratory relief on the ground that the court has no jurisdiction.
 In light of the promulgation of PD 1281, effective January 16, 1978, the defendants also moved to dismiss on the
grounds that the operating agreement between Atlas and Biga has already been rescinded and the trial court has lost
its jurisdiction.
They cited that under the PD:
The Bureau of Bureau of Mines shall have original and exclusive jurisdiction to hear and decide cases involving:
(1) Mining property of different agreements
(2) Cancellation or enforcement of mining contracts
 The court a quo clarified that the declaratory action is merely for a judicial pronouncement on the rights and
obligations of ATLAS under several operating agreements. It went on to state that the action for annulment of the
operating agreement filed with the Bureau of Mines is not Identical with the petition for declaratory relief and,
therefore, does not oust the trial court of its jurisdiction to hear the petition.

ISSUE:
1. Is the trial court divested of jurisdiction to hear and decide a mining controversy in view of the promulgation of
Presidential Decree No. 1281?

RULING:

Yes, the court is divested of that jurisidiction.

1. The declaratory action filed by ATLAS is within the ambit of Presidential Decree No. 1281. It is not an entirely different
or distinct cause of action. Were the court to rule otherwise, it would be ratifying two judicial bodies exercising
jurisdiction over an essentially the same subject matter.

The developments of PD 1281*:

(1) As early as January 15, 1973, PD 99-A provided where mining controversies should be litigated: Director of Mines
whose decision is appealable to the Secretary.
(2) The same procedure was reiterated in PD 309 (Sec. 5), issued on October 10, 1973, to accelerate disposition of
mining controversies with creation (sic) of a panel of investigators to submit a report to the Director of Mines
(3) PD 1281 issued on January 16, 1978, gives more teeth to the Bureau of Mines (Sec. 3) for its regulatory and
adjudicative powers and functions which becomes (sic) 'original and exclusive even over 'cancellation and/or
enforcement of mining contracts,' reiterating the same procedure laid down in PD 99-A and PD 309. Clearly, the three
Decrees—99-A, 309 and 1281—divested judicial tribunals of jurisdiction over mining controversies including
cancellation and enforcement of mining contracts by making the regulatory and adjudicative functions of the Bureau
'original and exclusive'

2. Presidential Decree No. 1281 is a remedial statute. It does not create new rights or take away rights that are already
vested. Thus, it shall apply to all actions pending at the time of its enactment except only with respect to those
cases which had already attained the character of a final and executory judgment

3. Furthermore, Presidential Decree No. 1281 is a special law and under a well-accepted principle in statutory
construction, the special law will prevail over a statute or law of general application.

4. The inevitable conclusion is that the operative act which divested the trial court of jurisdiction to decide the declaratory
action is not respondents' act of filing an administrative suit for the cancellation of their operating agreement with
ATLAS.

5. With or without such administrative action, the trial court is deemed to have lost jurisdiction to proceed with the
declaratory action immediately upon the effectivity of Presidential Decree No. 1281 on January 16, 1978.

*PRESIDENTIAL DECREE No. 1281 - Revising Commonwealth Act No. 136, Creating The Bureau Of Mines, And
For Other Purposes
"SECTION 7. In addition to its regulatory and adjudicative functions over companies, partnerships or persons engaged in
mining explorations, development, and exploitation, the Bureau of mines shall have original and exclusive jurisdiction to
hear and decide cases involving:
(a) a mining property subject of different agreements entered into by the claim holder thereof with several mining
operators;
xxx xxx xxx
(b) Cancellation and/or enforcement of mining contracts due to the refusal of the claim owner/operator to abide by the
terms and conditions thereof.
xxx xxx xxx
SECTION 12. All laws, executive orders, decrees, rules and regulations or parts thereof contrary to or inconsistent with
the provisions of this decree, are hereby repealed and amended or
modified accordingly. (Italics supplied.)

OTHER ISSUE :
Can a person who is not a party to a contract ile a petition for declaratory relief and seek a judicial interpretation of such
contract?
NO.
in United Central, We seriously doubted if a declaratory action can be FIiled in relation to a contract by persons who are
not parties thereto after considering that a substantive law, more specifiically Article 1311 of the Civil Code provides that
"[c]ontracts take effect only between the parties." Thus, "[i]t is quite plain that one who is not a party to a contract cannot
have the interest in it that the rule requires as basis for a declaratory relief."
IN THE CASE AT BAR, DI MAN PARTY SI ATLAS SA ASSIGNMENTS MADE BY CUENCO-VELEZ AND BIGA SO DI
SIYA KA FILE OG DECLARATORY RELIEF

Aside from the reason advanced herein above, this Court is in agreement with the observation made by respondent
appellate court at least insofar as the question of justiciability is concerned. Clearly then, other effective remedies are
available to ATLAS — such as an action for interpleader — to determine with Finality who among BIGA COPPER,
CUENCO-VELEZ and the latter's respective assignees is entitled to the royalties it will pay later on under the
operating agreements. ANA ANG COURT INTERPLEADER UNTA IMO GE FILE DILI DECLARATORY RELIEF
INDUSTRIAL ENTERPRISES, INC v. CA
1. Petitioner Industrial Enterprises Inc. (IEI) was granted a coal operating contract by the Government through the
Bureau of Energy Development (BED) for the exploration of two coal blocks in Eastern Samar. Subsequently, IEI also
applied with the then Ministry of Energy for another coal operating contract for the exploration of three additional coal
blocks which, together with the original two blocks, comprised the so-called "Giporlos Area."
2. IEI was later on advised that in line with the objective of rationalizing the country's over-all coal supply-demand
balance, the logical coal operator in the area should be the Marinduque Mining and Industrial Corporation (MMIC),
which was already developing the coal deposit in another area (Bagacay Area) and that the Bagacay and Giporlos
Areas should be awarded to MMIC.
3. Thus, IEI and MMIC executed a Memorandum of Agreement whereby IEI assigned and transferred to MMIC all its
rights and interests in the two coal blocks which are the subject of IEI's coal operating contract.
4. Subsequently, however, IEI filed an action for rescission of the Memorandum of Agreement with damages against
MMIC and the then Minister of Energy Geronimo Velasco before the RTC alleging that
a. MMIC took possession of the subject coal blocks even before the Memorandum of Agreement was finalized
and approved by the BED;
b. that MMIC discontinued work thereon; that MMIC failed to apply for a coal operating contract for the adjacent
coal blocks; and that MMIC failed and refused to pay the reimbursements agreed upon and to assume IEI's
loan obligation as provided in the Memorandum of Agreement.
5. IEI also prayed that the Energy Minister be ordered to approve the return of the coal operating contract from MMIC to
IEI, with a written confirmation that said contract is valid and effective, and, in due course, to convert said contract
from an exploration agreement to a development/production or exploitation contract in IEI's favor.
6. Strangely enough, Mr. Jesus S. Cabarrus is the President of both IEI and MMIC (ambot kinsa ni sya, gikalit ra nig
mention sa facts. Lol)
7. RTC:
a. ordered the rescission of the Memorandum of Agreement, declared the continued efficacy of the coal
operating contract in favor of IEI;
b. ordered the reversion of the two coal blocks covered by the coal operating contract; ordered BED to issue its
written affirmation of the coal operating contract and to expeditiously cause the conversion thereof from
exploration to development in favor of IEI;
c. directed BED to give due course to IEI's application for a coal operating contract; directed BED to give due
course to IEI's application for three more coal blocks; and ordered the payment of damages and rehabilitation
expenses.
8. CA: the rendition of the summary judgment was not proper since there were genuine issues in controversy between
the parties, and more importantly, that the RTC had no jurisdiction over the action considering that, under Presidential
Decree No. 1206, it is the BED that has the power to decide controversies relative to the exploration, exploitation and
development of coal blocks. (IMPORTANT NI MGA KAPATID)

ISSUE: WON the civil court has jurisdiction to hear and decide the suit for rescission of the Memorandum of Agreement
concerning a coal operating contract over coal blocks.

HELD: NO. - BED has jurisdiction! ez.

1. While the action filed by IEI sought the rescission of what appears to be an ordinary civil contract cognizable by a civil
court, the fact is that the Memorandum of Agreement sought to be rescinded is derived from a coal-operating contract
and is inextricably tied up with the right to develop coal-bearing lands and the determination of whether or not the
reversion of the coal operating contract over the subject coal blocks to IEI would be in line with the integrated national
program for coal-development and with the objective of rationalizing the country's over-all coal-supply-demand
balance, IEI's cause of action was not merely the rescission of a contract but the reversion or return to it of the
operation of the coal blocks. Thus it was that in its Decision ordering the rescission of the Agreement, the Trial
Court, inter alia, declared the continued efficacy of the coal-operating contract in IEI's favor and directed the BED to
give due course to IEI's application for three (3) IEI more coal blocks. These are matters properly falling within the
domain of the BED.
2. For the BED, as the successor to the Energy Development Board (abolished by Sec. 11, P.D. No. 1206, dated 6
October 1977) is tasked with the function of establishing a comprehensive and integrated national program for the
exploration, exploitation, and development and extraction of fossil fuels, such as the country's coal resources;
adopting a coal development program; regulating all activities relative thereto; and undertaking by itself or through
service contracts such exploitation and development, all in the interest of an effective and coordinated development of
extracted resources.
3. That law further provides that the powers and functions of the defunct Energy Development Board relative to the
implementation of P.D. No. 972 on coal exploration and development have been transferred to the BED, provided that
coal operating contracts including the transfer or assignment of interest in said contracts, shall require the approval of
the Secretary (Minister) of Energy (Sec. 12, P.D. No. 1206).
4. Considering the foregoing statutory provisions, the jurisdiction of the BED, in the first instance, to pass upon any
question involving the Memorandum of Agreement between IEI and MMIC, revolving as its does around a coal
operating contract, should be sustained.
5. Doctrine of primary jurisdiction -- It may occur that the Court has jurisdiction to take cognizance of a particular
case, which means that the matter involved is also judicial in character. However, if the case is such that its
determination requires the expertise, specialized skills and knowledge of the proper administrative bodies because
technical matters or intricate questions of facts are involved, then relief must first be obtained in an administrative
proceeding before a remedy will be supplied by the courts even though the matter is within the proper jurisdiction of a
court. It applies "where a claim is originally cognizable in the courts, and comes into play whenever enforcement of
the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special
competence of an administrative body, in such case the judicial process is suspended pending referral of such issues
to the administrative body for its view"
6. Doctrine of primary jurisdiction is applicable in this case -- the question of what coal areas should be exploited
and developed and which entity should be granted coal operating contracts over said areas involves a technical
determination by the BED as the administrative agency in possession of the specialized expertise to act on the matter.
The Trial Court does not have the competence to decide matters concerning activities relative to the exploration,
exploitation, development and extraction of mineral resources like coal. These issues preclude an initial judicial
determination. It behooves the courts to stand aside even when apparently they have statutory power to proceed in
recognition of the primary jurisdiction of an administrative agency.
7. The application of the doctrine of primary jurisdiction, however, does not call for the dismissal of the case below. It
need only be suspended until after the matters within the competence of the BED are threshed out and determined.
Thereby, the principal purpose behind the doctrine of primary jurisdiction is salutarily served.
8. Uniformity and consistency in the regulation of business entrusted to an administrative agency are secured, and the
limited function of review by the judiciary are more rationally exercised, by preliminary resort, for ascertaining and
interpreting the circumstances underlying legal issues, to agencies that are better equipped than courts by
specialization, by insight gained through experience, and by more flexible procedure (Far East Conference v. United
States, 342 U.S. 570).
9. With the foregoing conclusion arrived at, the question as to the propriety of the summary judgment rendered by the
Trial Court becomes unnecessary to resolve.
Lagua v Cusi

1. Nombrando, the legal counsel of Eastcoast issued a memorandum directing the Chief Security Guard of Eastcost to
prevent passage of Lagua’s hauling trucks loaded with logs on the M/S Kyofuku Maru.
2. The road was closed.
3. The loading of the logs to the M/S Kyofuku Maru was discontinued.
4. Lagua filed a complaint to the Bureau of Forest Development (BFD) about the problem.
5. BFP through Acting Station Officer-in-Change Aspiras instructed Eastcoast to open the closed road.
6. The hauling resumed but then the roads were then closed again by orders of Maglana from Eastcoast.
7. Lagua asked for the help of Provincial Commander of the Coast Guard to lift the illegal checkpoint.
8. Lagua filed a case in court for damages against Maglana following the illegal closure.
9. Maglana and Eastcoast filed a motion to dismiss the order for lack of jurisdiction and lack of cause of action.
10. CFI ruled in favor of Maglana and Eastcoast that the petition of Lagua be dismissed for lack of jurisdiction because:
the Bureau of Forest Development has the exclusive power to regulate the use of logging road and to determine
whether their use is in violation of laws. The question whether or not the road was illegally closed must first be
determined by the Bureau of Forest Development. If the said Bureau finds that the road was legally closed, an action
for damages may be filed in Court. Otherwise, no civil action would prosper, for there would be no tortious act.
11. Hence, this petition for mandamus which the SC treated as a petition for certiorari in the interest of justice.

Issue:

Whether the CFI had legal basis for holding that the Bureau of Forestry Development must first determine that the closure
of a logging road is illegal before an action for damages can be instituted in the regular courts.

Held:

No, there was no legal basis. P.D. No. 705 does not vest any power in the BFD to determine the legality of a road closure,
and to make such determination a pre-requisite before an action for damages. Not every activity inside a forest area is
subject to the jurisdiction of the Bureau of Forest Development (it’s not all about you Bobby).

PS. There were allegations of illegal timber logging against Lagua in this case that’s why the road was closed. However,
the SC remanded the case to the trial court for decision on the merits.
SUNVILLE TIMBER PRODUCTS v JUGDE ABAD GR NO. 85502
Facts:
1. The petitioner (sunville) was granted a Timber License Agreement (TLA), authorizing it to cut, remove and utilize
timber within the concession area.
2. private respondents filed a petition with DENR for the cancellation of the TLA on the ground of serious violations of its
conditions and the provisions of forestry laws and regulations.
3. The petitioner moved to dismiss this case on three grounds, to wit: 1) the court had no jurisdiction over the complaint;
2) the plaintiffs had not yet exhausted administrative remedies (The petitioner contends that the doctrine of exhaustion
of administrative remedies was not correctly applied and that the declaration of the unconstitutionality of Section 1 of
PD 605 was improper.); and 3) the injunction sought was expressly prohibited by Section 1 of PD 605.
4. Judge Alfonso G. Abad denied the motion to dismiss.
5. In his decision, Judge Abad found out that City Council of Pagadian in its Resolution No. 111 requested the Bureau of
Forest Development to reserve 1,000 hectares in Lison Valley. This request remained unacted upon. Instead, a TLA
covering 29,500 hectares, including the area requested, was given to petitioner.
6. The fear expressed by the City Council of Pagadian in its resolution became reality. “the erosion caused by the
logging operations of the defendant has caused heavy siltation xxx the adverse effects of the logging operations of
the defendant have already covered a wider area than that feared to lie adversely affected by the City Council of
Pagadian City.
7. Thus, it is urgent that indiscriminate logging be stopped. Irreparable damage would ensue unless the court intervenes.
8. The respondent court cited the case of De Lara v. Cloribel,where "irreparable damage and injury" was allowed as an
exceptional ground, and Arrow Transportation Corporation v. Board of Transportation,where the doctrine was waived
because of "the strong public interest in having the matter settled" as soon as possible.
9. The decision also declared invalid Section 1 of PD 605, which provides:
Section 1. No court of the Philippines shall have jurisdiction to issue any restraining order, preliminary
injunction or preliminary mandatory injunction in any case involving or growing out of the issuance, approval
or disapproval, revocation or suspension of, or any action whatsoever by the proper administrative official or
body on concessions, licenses, permits, patents, or public grants of any kind in connection with the
disposition, exploitation, utilization, exploration and/or development of the natural resources of the Philippines.
10. This was held to be an encroachment on the judicial power vested in the Supreme Court and the lower courts by
Article VIII, Section 1, of the Constitution.

ISSUE:
 What is the correct application of the doctrine of exhaustion of administrative remedies?

SC RULING:
 The doctrine of exhaustion of administrative remedies calls for resort first to the appropriate administrative
authorities in the resolution of a controversy falling under their jurisdiction before the same may be elevated to the
courts of justice for review. Non-observance of the doctrine results in lack of a cause of action, which is one of the
grounds allowed in the Rules of Court for the dismissal of the complaint. The deficiency is not jurisdictional.
Failure to invoke it operates as a waiver of the objection as a ground for a motion to dismiss and the court may
then proceed with the case as if the doctrine had been observed.
 One of the reasons for the doctrine of exhaustion is the separation of powers.
 the administrative authorities are in a better position to resolve questions addressed to their particular expertise
and that errors committed by subordinates
 administrative decisions are usually questioned in the special civil actions of certiorari, prohibition and mandamus,
which are allowed only when there is no other plain, speedy and adequate remedy available to the petitioner.
 As correctly suggested by the respondent court, however, there are a number of instances when the doctrine may
be dispensed with and judicial action validly resorted to immediately. (the exception raised by the respondents is
that the question raised is purely legal.)
 The private respondents now submit that their complaint comes under the exceptions because forestry laws do
not require observance of the doctrine as a condition precedent to judicial action; the question they are raising is
purely legal; application of the doctrine will cause great and irreparable damage; and public interest is involved.
 the reasons for the doctrine above given, if nothing else, would suffice to still require its observance
 the Forest Management Bureau (formerly the Bureau of Forest Development) the responsibility for the
enforcement of the forestry laws and regulations[21] here claimed to have been violated.
  This conferment clearly implies at the very least that the BUREU OF FOREST DEVELOPMENTS/DENR should
be allowed to rule in the first instance on any controversy coming under its express powers before the courts of
justice may intervene.
 The argument that the questions raised in the petition are purely legal is also not acceptable.The charge involves
factual issues calling for the presentation of supporting evidence.
 As for the alleged urgent necessity for judicial action and the claimed adverse impact of the case on the national
interest, the record does not show that the petitioners have satisfactorily established these extraordinary
circumstances to justify deviation from the doctrine.
 The wrong alleged in the Civil Case complaint was supposedly committed as a result of the unlawful logging
activities of the petitioner, it will be necessary first to determine whether or not the TLA and the forestry laws and
regulations had indeed been violated. To repeat for emphasis, determination of this question is the primary
responsibility of the Forest Management Bureau of the DENR.
 there was no need for the respondent court to declare the unconstitutionality of Section 1 of PD 605. The rule is
that a question of constitutionality must be avoided where the case can be decided on some other available
ground.

CONCLUSION:
 PETITION GRANTED
PAAT v. CA
FACTS:
1. The controversy started when the truck of private respondent Victoria de Guzman while on its way to Bulacan from
Cagayan, was seized by DENR personnel in Aritao, Nueva Vizcaya because the driver could not produce the required
documents for the forest products found concealed in the truck.
2. Petitioner Jovito Layugan, the Community Environment and Natural Resources Officer (CENRO) in Aritao, Cagayan,
issued an order of confiscation of the truck and gave the owner 15 days within which to submit an explanation why the
truck should not be forfeited. Private respondents, however, failed to submit the required explanation.
3. Regional Executive Director Rogelio Baggayan of DENR sustained petitioner Layugans action of confiscation
and ordered the forfeiture of the truck invoking Section 68-A of Presidential Decree No. 705 as amended by Executive
Order No. 277.
4. De Guzman filed a letter of reconsideration – denied
5. Subsequently, the case was brought by the petitioners to the Secretary of DENR pursuant to private respondents
statement in their letter that in case their letter for reconsideration would be denied then this letter should be
considered as an appeal to the Secretary.
6. Pending resolution however of the appeal, a suit for replevin was filed by the private respondents against petitioner
Layugan and Executive Director Baggayan with the RTC which issued a writ ordering the return of the truck to private
respondents.
7. Petitioner Layugan and Executive Director Baggayan filed a motion to dismiss with the trial court contending that
private respondents had no cause of action for their failure to exhaust administrative remedies. The trial court denied
the motion to dismiss.
8. Petitioners’ arguments before SC: Invoking the doctrine of exhaustion of administrative remedies, petitioners aver
that the trial court could not legally entertain the suit for replevin because the truck was under administrative seizure
proceedings pursuant to Section 68-A of P.D. 705, as amended by E.O. 277.
9. Private respondents’ argument before SC: the instant case falls within the exception of the doctrine upon the
justification that (1) due process was violated because they were not given the chance to be heard, and (2) the
seizure and forfeiture was unlawful on the grounds: (a) that the Secretary of DENR and his representatives
have no authority to confiscate and forfeit conveyances utilized in transporting illegal forest products, and (b)
that the truck as admitted by petitioners was not used in the commission of the crime.

ISSUE: (1) WON the trial court could entertain a suit for replevin while the truck was under administrative seizure
proceedings. (exhaustion of admin remedies ang issue ani)
(2) WON the Sec of DENR and his representatives have authority to confiscate and forfeit conveyances utilized in
transporting illegal forest products.

HELD: ISSUE#1 -- NO!

1. Before a party is allowed to seek the intervention of the court, it is a pre-condition that he should have availed of
all the means of administrative processes afforded him. Hence, if a remedy within the administrative machinery
can still be resorted to by giving the administrative officer concerned every opportunity to decide on a matter that
comes within his jurisdiction then such remedy should be exhausted first before courts judicial power can be
sought. The premature invocation of courts intervention is fatal to ones cause of action.
APPLICATION:
In the case at bar, there is no question that the controversy was pending before the Secretary of DENR when it was
forwarded to him following the denial by the petitioners of the motion for reconsideration of private respondents through
the order of July 12, 1989. In their letter of reconsideration, private respondents clearly recognize the presence of an
administrative forum to which they seek to avail, as they did avail, in the resolution of their case. The letter, reads, thus: “If
this motion for reconsideration does not merit your favorable action, then this letter should be considered as an appeal to
the Secretary.”
It was easy to perceive then that the private respondents looked up to the Secretary for the review and disposition of
their case. By appealing to him, they acknowledged the existence of an adequate and plain remedy still available and
open to them in the ordinary course of the law. Thus, they cannot now, without violating the principle of exhaustion of
administrative remedies, seek courts intervention by filing an action for replevin for the grant of their relief during the
pendency of an administrative proceedings.
Moreover, it is important to point out that the enforcement of forestry laws, rules and regulations and the protection,
development and management of forest lands fall within the primary and special responsibilities of the DENR. By the very
nature of its function, the DENR should be given a free hand unperturbed by judicial intrusion to determine a controversy
which is well within its jurisdiction. The assumption by the trial court, therefore, of the replevin suit filed by private
respondents constitutes an unjustified encroachment into the domain of the administrative agencys prerogative. The
doctrine of primary jurisdiction does not warrant a court to arrogate unto itself the authority to resolve a controversy the
jurisdiction over which is initially lodged with an administrative body of special competence.
ISSUE#2 --- YES!
SECTION 68. xxx
The court shall further order the confiscation in favor of the government of the timber or any forest
products cut, gathered, collected, removed, or possessed, as well as the machinery, equipments, implements and
tools illegaly [sic] used in the area where the timber or forest products are found. (Underline ours)
A reading, however, of the law persuades us not to go along with private respondents thinking not only because the
aforequoted provision apparently does not mention nor include conveyances that can be the subject of confiscation by the
courts, but to a large extent, due to the fact that private respondents interpretation of the subject provision unduly restricts
the clear intention of the law and inevitably reduces the other provision of Section 68-A , which is quoted herein below:
SECTION 68-A. Administrative Authority of the Department or His Duly Authorized Representative To Order
Confiscation. In all cases of violation of this Code or other forest laws, rules and regulations, the Department Head or his
duly authorized representative, may order the confiscation of any forest products illegally cut, gathered, removed, or
possessed or abandoned, and all conveyances used either by land, water or air in the commission of the offense and to
dispose of the same in accordance with pertinent laws, regulations and policies on the matter. (Underline ours)
It is, thus, clear from the foregoing provision that the Secretary and his duly authorized representatives are given the
authority to confiscate and forfeit any conveyances utilized in violating the Code or other forest laws, rules and
regulations. The phrase to dispose of the same is broad enough to cover the act of forfeiting conveyances in favor of the
government. The only limitation is that it should be made in accordance with pertinent laws, regulations or policies on the
matter
It is interesting to note that Section 68-A is a new provision authorizing the DENR to confiscate, not only
conveyances, but forest products as well. On the other hand, confiscation of forest products by the court in a criminal
action has long been provided for in Section 68. If as private respondents insist, the power on confiscation cannot be
exercised except only through the court under Section 68, then Section 68-A would have no purpose at all.

CONCLUSION:
1. a suit for replevin cannot be sustained against the petitioners for the subject truck taken and retained by them for
administrative forfeiture proceedings in pursuant to Section 68-A of the P. D. 705, as amended. Exhaustion of the
remedies in the administrative forum, being a condition precedent prior to ones recourse to the courts and more
importantly, being an element of private respondents right of action, is too significant to be waylaid by the lower
court.
2. Private respondents miserably failed to convince this Court that a wrongful detention of the subject truck obtains
in the instant case. It should be noted that the truck was seized by the petitioners because it was transporting
forest products with out the required permit of the DENR in manifest contravention of Section 68 of P.D. 705 as
amended by E.O 277. Section 68-A of P.D. 705, as amended, unquestionably warrants the confiscation as well as
the disposition by the Secretary of DENR or his duly authorized representatives of the conveyances used in
violating the provision of forestry laws. Evidently, the continued possession or detention of the truck by the
petitioners for administrative forfeiture proceeding is legally permissible, hence , no wrongful detention exists in
the case at bar.
3. Moreover, the suit for replevin is never intended as a procedural tool to question the orders of confiscation and
forfeiture issued by the DENR in pursuance to the authority given under P.D.705, as amended. Section 8 of the
said law is explicit that actions taken by the Director of the Bureau of Forest Development concerning the
enforcement of the provisions of the said law are subject to review by the Secretary of DENR and that courts may
not review the decisions of the Secretary except through a special civil action for certiorari or prohibition.