SEMIRARA COAL CORPORATION (now SEMIRARA MINING CORPORATION), vs.HGL DEVELOPMENT CORPORATION and HON. ANTONIO BANTOLO, Presiding Judge, Branch 13, Regional Trial Court, 6th Judicial Region, Culasi, Antique, G.R. No. 166854 December 6, 2006

Case Digest 

SEMIRARA COAL CORPORATION (now SEMIRARA MINING CORPORATION), 

vs.HGL DEVELOPMENT CORPORATION and HON. ANTONIO BANTOLO, Presiding Judge, Branch 13, Regional Trial Court, 6th Judicial Region, Culasi, Antique, G.R. No. 166854 December 6, 2006

Petitioner Semirara Mining Corporation is a grantee by the Department of Energy (DOE) of a Coal Operating Contract under Presidential Decree No. 9723 over the entire Island of Semirara, Antique, which contains an area of 5,500 hectares more or less. 4

Private respondent HGL Development Corporation is a grantee of Forest Land Grazing Lease Agreement (FLGLA) No. 184 by the then Ministry of Environment and Natural Resources,5 over 367 hectares of land located at the barrios of Bobog and Pontod, Semirara, Caluya, Antique. The FLGLA No. 184 was issued on September 28, 19846for a term of 25 years, to end on December 31, 2009. Since its grant, HGL has been grazing cattle on the subject property.

Sometime in 1999, petitioner's representatives approached HGL and requested for permission to allow petitioner's trucks and other equipment to pass through the property covered by the FLGLA. HGL granted the request on condition that petitioner's use would not violate the FLGLA in any way. Subsequently, however, petitioner erected several buildings for petitioner's administrative offices and employees' residences without HGL's permission. Petitioner also conducted blasting and excavation; constructed an access road to petitioner's minesite in the Panaan Coal Reserve, Semirara; and maintained a stockyard for the coal it extracted from its mines. Thus, the land which had been used for cattle grazing was greatly damaged, causing the decimation of HGL's cattle.

On September 22, 1999, HGL wrote petitioner demanding full disclosure of petitioner's activities on the subject land as well as prohibiting petitioner from constructing any improvements without HGL's permission. Petitioner ignored the demand and continued with its activities.

On December 6, 2000, the Department of Environment and Natural Resources (DENR) unilaterally cancelled FLGLA No. 184 and ordered HGL to vacate the premises. The DENR found that HGL failed to pay the annual rental and surcharges from 1986 to 1999 and to submit the required Grazing Reports from 1985 to 1999 or pay the corresponding penalty for non-submission thereof.7

HGL contested the findings and filed a letter of reconsideration on January 12, 2001, which was denied by DENR Secretary Heherson Alvarez in a letter-order dated December 9, 2002. The DENR stated that it had coordinated with the DOE, which had jurisdiction over coal or coal deposits and coal-bearing lands, and was informed that coal deposits were very likely to exist in Sitios Bobog and Pontod. Hence, unless it could be proved that coal deposits were not present, HGL's request had to be denied.8

HGL sent a letter dated March 6, 2003 to DENR Secretary Alvarez seeking reconsideration. The DENR did not act on the letter and HGL later withdrew this second letter of reconsideration in its letter of August 4, 2003.

On November 17, 2003, HGL filed a complaint against the DENR for specific performance and damages with prayer for a temporary restraining order and/or writ of preliminary injunction, docketed as Civil Case No. 20675 (2003) with the Regional Trial Court of Caloocan City. A writ of preliminary injunction was issued by the Caloocan City RTC on December 22, 2003, enjoining the DENR from enforcing its December 6, 2000 Order of Cancellation.

Meanwhile, HGL had also filed on November 17, 2003, a complaint against petitioner for Recovery of Possession and Damages with Prayer for TRO and/or Writ of Preliminary Mandatory Injunction, docketed as Civil Case No. C-146 with the Regional Trial Court of Culasi, Antique, Branch 13.9

On December 1, 2003, the Antique trial court heard the application for Writ of Preliminary Mandatory Injunction in Civil Case No. C-146. Only HGL presented its evidence. Reception for petitioner's evidence was set to March 23-24, 2004. Petitioner was notified. But, on March 19, 2004, petitioner's President wrote the court asking for postponement since its counsel had suddenly resigned. The trial court refused to take cognizance of the letter and treated it as a mere scrap of paper since it failed to comply with the requisites for the filing of motions and since it was not shown that petitioner's President was authorized to represent petitioner. Because of petitioner's failure to attend the two scheduled hearings, the trial court, in an Order dated March 24, 2004, deemed the application for issuance of a Writ of Preliminary Mandatory Injunction submitted for decision. Meanwhile, petitioner had filed its Answer dated February 26, 2004, raising among others the affirmative defense that HGL no longer had any right to possess the subject property since its FLGLA has already been cancelled and said cancellation had already become final.

The construction of numerous buildings and the blasting activities thereon by the petitioner undertaken without the consent of the private respondent blatantly violates the rights of the latter because it reduced the area being used for cattle-grazing pursuant to the "FLGLA".

From the foregoing it is clear that the three (3) indispensable requisites of a cause of action, to wit: (a) the right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (b) an obligation on the part of the named defendant to respect or not to violate such right; (c) an act or omission on the part of such defendant is violative of the right of plaintiff or constituting a breach of the obligation of defendant to the plaintiff for which the latter may maintain an action for recovery of damages, are PRESENT.

Hence, having established that private respondent herein has a cause of action under the principal action in Civil Case No. C-146, necessarily it also has a cause of action under the ancillary remedy of injunction.

This Court finds that the petitioner was not deprived of due process.

Even assuming arguendo that Atty. Hilario is the only one who is knowledgeable of the facts of the case, still, petitioners cannot claim that there was violation of due process because the "ESSENCE of due process is reasonable opportunity to be heard x x x. What the law proscribed is lack of opportunity to be heard." In the case at bar, petitioner was given two (2) settings to present its evidence but it opted not to.

Court of Appeals Decision dated January 31, 2005.16

Petitioner submits in the petition now the following grounds:

I.THE RESOLUTION DATED 16 SEPTEMBER 2004 AND THE WRIT OF PRELIMINARY MANDATORY INJUNCTION DATED 6 OCTOBER 2004 ISSUED BY PUBLIC RESPONDENT ARE A PATENT NULLITY AS PRIVATE RESPONDENT CLEARLY HAS NO LEGAL RIGHT OR CAUSE OF ACTION UNDER ITS PRINCIPAL ACTION OR COMPLAINT, MUCH LESS, TO THE ANCILLARY REMEDY OF PRELIMINARY MANDATORY INJUNCTION;

II.A WRIT OF PRELIMINARY MANDATORY INJUNCTION CANNOT BE USED TO TAKE PROPERTY OUT OF THE POSSESSION OF ONE PARTY AND PLACE IT INTO THAT OF ANOTHER WHO HAS NO CLEAR LEGAL RIGHT THERETO;

III.PRIVATE RESPONDENT'S COMPLAINT IN CIVIL CASE NO. C-146 IS IN THE NATURE OF AN ACCION PUBLICIANA, NOT FORCIBLE ENTRY; HENCE, A WRIT OF PRELIMINARY MANDATORY INJUNCTION IS NOT A PROPER REMEDY;

IV.PETITIONER WAS UNJUSTIFIABLY AND ARBITRARILY DEPRIVED OF ITS FUNDAMENTAL RIGHT TO DUE PROCESS WHEN IT WAS DENIED THE RIGHT TO PRESENT EVIDENCE IN OPPOSITION TO THE APPLICATION FOR PRELIMINARY MANDATORY INJUNCTION;

V.THE PUBLIC RESPONDENT DELIBERATELY WITHHELD THE RESOLUTION OF PETITIONER'S MOTION FOR RECONSIDERATION DATED 12 JULY 2004 AND PROCEEDED TO PREMATURELY ISSUE THE PRELIMINARY MANDATORY INJUNCTION IN VIOLATION OF PETITIONER'S RIGHT TO FAIR PLAY AND JUSTICE;

VI.PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION WHEN:

1) HE REFUSED OR FAILED TO ADMIT AND/OR CONSIDER THE CERTIFIED DENR RECORDS OF THE DENR ORDER CANCELLING PRIVATE RESPONDENT'S FLGLA;

2) HE REFUSED OR FAILED TO CONDUCT A HEARING ON THESE CERTIFIED PUBLIC DOCUMENTS WHICH CONCLUSIVELY PROVE PRIVATE RESPONDENT'S LACK OF CAUSE OF ACTION UNDER THE PRINCIPAL ACTION; AND

3) HE REFUSED OR FAILED TO DISMISS THE COMPLAINT OUTRIGHT FOR VIOLATING THE RULES ON FORUM SHOPPING BY PRIVATE RESPONDENT.17

Now on the merits of the instant petition.

The pivotal issue confronting this Court is whether the Court of Appeals seriously erred or committed grave abuse of discretion in affirming the September 16, 2004 Resolution of the Regional Trial Court of Antique granting the writ of preliminary mandatory injunction.

Under Article 539 of the New Civil Code, a lawful possessor is entitled to be respected in his possession and any disturbance of possession is a ground for the issuance of a writ of preliminary mandatory injunction to restore the possession.20 Thus, petitioner's claim that the issuance of a writ of preliminary mandatory injunction is improper because the instant case is allegedly one for accion publiciana deserves no consideration. This Court has already ruled in Torre, et al. v. Hon. J. Querubin, et al.21 that prior to the promulgation of the New Civil Code, it was deemed improper to issue a writ of preliminary injunction where the party to be enjoined had already taken complete material possession of the property involved. However, with the enactment of Article 539, the plaintiff is now allowed to avail of a writ of preliminary mandatory injunction to restore him in his possession during the pendency of his action to recover possession.22

It is likewise established that a writ of mandatory injunction is granted upon a showing that (a) the invasion of the right is material and substantial; (b) the right of complainant is clear and unmistakable; and (c) there is an urgent and permanent necessity for the writ to prevent serious damage.23

In the instant case, it is clear that as holder of a pasture lease agreement under FLGLA No. 184, HGL has a clear and unmistakable right to the possession of the subject property. Recall that under the FLGLA, HGL has the right to the lawful possession of the subject property for a period of 25 years or until 2009. As lawful possessor, HGL is therefore entitled to protection of its possession of the subject property and any disturbance of its possession is a valid ground for the issuance of a writ of preliminary mandatory injunction in its favor. The right of HGL to the possession of the property is confirmed by petitioner itself when it sought permission from HGL to use the subject property in 1999. In contrast to HGL's clear legal right to use and possess the subject property, petitioner's possession was merely by tolerance of HGL and only because HGL permitted petitioner to use a portion of the subject property so that the latter could gain easier access to its mining area in the Panaan Coal Reserve.

The urgency and necessity for the issuance of a writ of mandatory injunction also cannot be denied, considering that HGL stands to suffer material and substantial injury as a result of petitioner's continuous intrusion into the subject property. Petitioner's continued occupation of the property not only results in the deprivation of HGL of the use and possession of the subject property but likewise affects HGL's business operations. It must be noted that petitioner occupied the property and prevented HGL from conducting its business way back in 1999 when HGL still had the right to the use and possession of the property for another 10 years or until 2009. At the very least, the failure of HGL to operate its cattle-grazing business is perceived as an inability by HGL to comply with the demands of its customers and sows doubts in HGL's capacity to continue doing business. This damage to HGL's business standing is irreparable injury because no fair and reasonable redress can be had by HGL insofar as the damage to its goodwill and business reputation is concerned.

Petitioner posits that FLGLA No. 184 had already been cancelled by the DENR in its order dated December 6, 2000. But as rightly held by the Court of Appeals, the alleged cancellation of FLGLA No. 184 through a unilateral act of the DENR does not automatically render the FLGLA invalid since the unilateral cancellation is subject of a separate case which is still pending before the Regional Trial Court of Caloocan City. Notably, said court has issued a writ of preliminary injunction enjoining the DENR from enforcing its order of cancellation of FLGLA No. 184.

The Court of Appeals found that the construction of numerous buildings and blasting activities by petitioner were done without the consent of HGL, but in blatant violation of its rights as the lessee of the subject property. It was likewise found that these unauthorized activities effectively deprived HGL of its right to use the subject property for cattle-grazing pursuant to the FLGLA. It cannot be denied that the continuance of petitioner's possession during the pendency of the case for recovery of possession will not only be unfair but will undeniably work injustice to HGL. It would also cause continuing damage and material injury to HGL. Thus, the Court of Appeals correctly upheld the issuance of the writ of preliminary mandatory injunction in favor of HGL.

WHEREFORE, the instant petition is DENIED. The Decision dated January 31, 2005, of the Court of Appeals in CA G.R. CEB SP No. 00035, which affirmed the Resolution dated September 16, 2004 of the Regional Trial Court of Culasi, Antique, Branch 13, as well as the Writ of Preliminary Mandatory Injunction dated October 6, 2004 issued pursuant to said Resolution, is AFFIRMED. The temporary restraining order issued by this Court is hereby lifted. No pronouncement as to costs.