G.R. No. 166854 - Semirara Coal Corp. vs. HGL Development Corp.

Petitioner: Semirara Mining Corporation (now Semirara Mining Corporation), a grantee by the Department of Energy of a Coal Operating Contract under Presidential Decree No. 972 covering approximately 5,500 hectares on Semirara Island, Antique.
Private Respondent: HGL Development Corporation, grantee of Forest Land Grazing Lease Agreement (FLGLA) No. 184 covering 367 hectares located at the barrios of Bobog and Pontod, Semirara, Caluya, Antique, with a lease term from its issuance (September 28, 1984) until December 31, 2009.

In 1999, petitioner’s representatives approached HGL seeking permission to allow its trucks and equipment access through the FLGLA-covered land.
HGL granted the request on condition that petitioner’s use would not violate any terms of the FLGLA.
Petitioner subsequently erected several buildings for administrative offices and employee residences without securing HGL’s further permission.
Additional unauthorized activities by petitioner included blasting and excavation, the construction of an access road to its minesite in the Panaan Coal Reserve, and the maintenance of a stockyard for extracted coal.
The petitioner’s activities caused significant damage to the land, which had been used for cattle grazing, resulting in the decimation of HGL’s cattle.

On September 22, 1999, HGL sent a letter demanding full disclosure of petitioner’s activities and prohibiting further unauthorized construction.
The petitioner ignored HGL’s demand and continued its operations.
On December 6, 2000, the Department of Environment and Natural Resources (DENR) unilaterally cancelled FLGLA No. 184 for HGL due to non-payment of annual rental and surcharges (from 1986 to 1999) and the failure to submit required grazing reports from 1985 to 1999.
HGL contested the cancellation by filing a letter of reconsideration on January 12, 2001, which DENR Secretary Heherson Alvarez denied on December 9, 2002.
A subsequent letter dated March 6, 2003 seeking reconsideration was eventually withdrawn by HGL on August 4, 2003.

A complaint for specific performance and damages against DENR, docketed as Civil Case No. 20675 (2003) at the RTC of Caloocan City, where a writ of preliminary injunction was issued on December 22, 2003.
A complaint against petitioner for Recovery of Possession and Damages (Civil Case No. C-146) with prayer for a temporary restraining order (TRO) or writ of preliminary mandatory injunction, filed in the RTC of Culasi, Antique, Branch 13.

In the Caloocan City case, petitioner filed an answer on February 26, 2004, asserting an affirmative defense that HGL’s rights had ceased due to the cancellation of FLGLA.
In Civil Case No. C-146, HGL presented its evidence at a hearing on December 1, 2003.

Petitioner’s request (filed March 19, 2004) for postponement due to its counsel’s resignation was dismissed by the trial court as a mere scrap of paper lacking proper form and authority.
Due to petitioner’s absence on scheduled hearings, the trial court, on March 24, 2004, rendered the application for the issuance of a writ of preliminary mandatory injunction.

Petitioner subsequently filed an Omnibus Motion on April 14, 2004, seeking reconsideration of the March 24 order and the admission of several documentary evidences (including DENR orders and HGL’s correspondence), but this motion was denied by a Resolution on June 21, 2004.
On September 16, 2004, the trial court granted the prayer for the issuance of a writ of preliminary mandatory injunction, which was executed on October 6, 2004, enjoining petitioner and its agents from further encroachment and commanding the restoration of possession to HGL.

Petitioner challenged the Resolution of September 16, 2004 and the writ of injunction before the Court of Appeals in a petition for certiorari raising several issues:

Whether private respondent had any legal right or cause of action justifying the ancillary remedy of a preliminary mandatory injunction.
Whether petitioner was denied an opportunity to present evidence, thereby being deprived of its due process rights.
Whether the lower court should have resolved the motion for reconsideration before granting the injunction.
The proper admissibility of the petitioner’s documentary evidence.
The applicability of Presidential Decree (PD) 605 in the context of the petitioner's coal operating contract.

On January 31, 2005, the Court of Appeals dismissed petitioner’s petition and affirmed the lower court’s Resolution and the writ of injunction.

Whether private respondent (HGL Development Corporation) had a valid legal right and cause of action under the FLGLA, thereby justifying the ancillary remedy of a preliminary mandatory injunction.
Whether petitioner was denied due process by not being given a proper and reasonable opportunity to present evidence in opposition to the injunction, despite its claims of unforeseeable circumstances (i.e., sudden resignation of its counsel).
Whether the trial court erred in issuing the writ of preliminary mandatory injunction without first resolving petitioner’s motion for reconsideration (including the motion filed on July 12, 2004).
Whether the trial court properly excluded the petitioner’s documentary evidence (attached to the Omnibus Motion) due to non-compliance with evidentiary rules, including proper identification and marking.
Whether the issuance of the writ of preliminary mandatory injunction was in violation of Presidential Decree 605, which prohibits courts from issuing preliminary injunctions in cases involving concessions, licenses, or permits for natural resource exploitation.