October 2007 - Philippine Supreme Court Decisions/Resolutions

Philippine Supreme Court Jurisprudence

G.R. No. 162124 - Polomolok Water District v. Polomolok General Consumers Asso., Inc.

FIRST DIVISION

[G.R. NO. 162124 : October 18, 2007]

POLOMOLOK WATER DISTRICT, Petitioner, v. POLOMOLOK GENERAL CONSUMERS ASSOCIATION, INC., Respondent.

D E C I S I O N

SANDOVAL-GUTIERREZ, J.:

For the Court's resolution is the instant Petition for Review on Certiorari seeking to reverse the Decision¹ of the Court of Appeals (Third Division) dated August 29, 2003 in CA-G.R. SP No. 66037.

Polomolok Water District (PWD), petitioner, is a government-owned and controlled corporation engaged in producing and supplying potable water to the residents of the Municipality of Polomolok, South Cotabato.

Polomolok General Consumers Association, Inc., respondent, is a non-stock, non-profit corporation organized and existing under Philippine laws.

In October 1994, petitioner passed PWD Resolution No. 94-023, S. 1994 imposing new and higher water rates upon its customers.

Respondent and its members vigorously opposed petitioner's Resolution, hence, they filed an administrative complaint with the National Water Resources Board (NWRB). But in an Order dated October 13, 1999, the NWRB dismissed the complaint for having been filed out of time.

On November 3, 1999, respondent filed with the Regional Trial Court, Branch 39, Polomolok, South Cotabato, a class suit for declaration of nullity of PWD Resolution No. 94-023, with prayer for a temporary restraining order and preliminary injunction, docketed as Civil Case No. 281. Respondent alleged that the Resolution was passed without due notice to its members and hearing as required by Presidential Decree (P.D.) No. 198, as amended.

In its answer, petitioner claimed that it posted notices at various conspicuous public places at least one week before the public hearing; that it conducted two public hearings on March 2 and June 22, 1994; and that during the second hearing, 187 residents of Polomolok were present.

On December 3, 1999, the trial court issued a writ of preliminary injunction enjoining petitioner from disconnecting the water supply of respondent's members.

Meanwhile, on June 23, 2000, through the earnest efforts of the Mayor of Polomolok, the parties entered into a "Memorandum of Agreement." Respondent agreed to submit a list of all its members, the amounts of dues and the dates of payments. Petitioner, in turn, committed to accept the payments of respondent's members at the rate of P60.00 for the first 10 cubic meters of water consumption or any amount as may be decreed by the trial court in Civil Case No. 281. The parties also agreed that payments of water dues would be made directly to petitioner rather than coursed through respondent; and that the "Memorandum of Agreement" would be without prejudice to the final outcome of Civil Case No. 281.

However, both parties violated their stipulations.

Meanwhile, on January 18, 2001, the trial court rendered an Order² which reads:

In view of the foregoing, the Court finds that plaintiff has established sufficient proof of violation of its rights to justify the issuance of a writ of preliminary injunction in its favor during the pendency of the main suit for declaration of nullity of defendant's Resolution No. 94-023.

Correspondingly, let therefore a writ of preliminary injunction be issued restraining the defendant from disconnecting the water meter/connection of the plaintiff and its members.

The injunction bond is hereby fixed at P200,000.00 which the plaintiff will pay to such defendant all damages that it may sustain by reason of the injunction if the Court should finally decide that the said plaintiff was not entitled thereto.

The Court Sheriff is hereby directed to serve this Order and the Writ of Preliminary Injunction to the defendant Polomolok Water District immediately upon receipt thereof and to make his return with proceeding thereon.

SO ORDERED.

Petitioner filed a motion for reconsideration, but this was denied by the trial court in its Order dated May 10, 2001.

Thereupon, petitioner filed with the Court of Appeals a Petition for Certiorari, contending that the trial court committed grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the Orders dated January 18 and May 10, 2001 directing the issuance of a writ of preliminary injunction; that respondent failed to exhaust all administrative remedies before seeking judicial relief; and that, therefore, the trial court has no jurisdiction over Civil Case No. 281.

In its Decision of August 29, 2003, the Court of Appeals dismissed petitioner's Petition for Certiorariand affirmed the trial court's questioned Orders, thus:

WHEREFORE, the assailed orders dated January 18, 2001 and May 10, 2001 are AFFIRMED. The case is remanded to the Regional Trial Court of Polomolok, South Cotabato, Branch 39. The said court is ordered to resolve with deliberate dispatch the class suit for declaration of nullity of Polomolok Water District Resolution No. 94-023. Accordingly, the instant petition is DISMISSED.

SO ORDERED.

The Court of Appeals held that the issue before the trial court was the validity of PWD Resolution No. 94-023, S. 1994 which is incapable of pecuniary estimation. Hence, the doctrine of exhaustion of administrative remedies is inapplicable.

Petitioner seasonably filed its motion for reconsideration, but this was denied by the Court of Appeals in its Resolution³ dated January 21, 2004.

Hence, this petition.

Petitioner contends that based upon the allegations of the complaint, it is the National Water Rights Board, created under P.D. Nos. 700 and 744, which has jurisdiction over Civil Case No. 281. Its decision is appealable to the National Water Resources Council and the latter's ruling should be appealed to the Office of the President. As respondent failed to exhaust all these administrative remedies, its complaint with the trial court was premature and should have been dismissed.

It is well settled that jurisdiction of the court is determined on the basis of the material allegations of the complaint and the character of the relief prayed for irrespective of whether plaintiff is entitled to such relief.⁴ The pertinent allegations in the complaint in Civil Case No. 281 are:

x x x

4. Sometime in October 1994, the defendant imposed new water rates, allegedly through PWD Resolution No. 94-023, Series of 1994. A photocopy of the said Resolution is hereto attached as Annex "D.";

5. PWD Resolution No. 94-023 was passed without complying with the provisions of PD 198, Letter of Instruction No. 700, Par (c), Section 1, as well as Letter of Instruction No. 744, and other related laws;

6. The non-compliance on the requirements of public hearing, posting, publication and other requirements, as required by the said law and Letters of Instruction would render Resolution No. 94-023 null and void;

7. Plaintiff originally filed before this Honorable Court Civil Case No. 115 for damages and Preliminary Injunction, but since the issue in the said case intertwined with the proper rates that will be imposed, the Honorable Court dismissed the said case for lack of cause of action for clearly the issue of water rates pertain to the National Water Rights Board (NWRB, for brevity);

8. The case filed by the plaintiff before the NWRB has already been withdrawn by the plaintiff. A photocopy of the withdrawal is hereto attached as Annex "E" as the NWRB resolved that it has no jurisdiction to pass on the legality of Resolution No. 94-023;

9. The present action is based only on the legality of the adoption of Resolution No. 94-023 (stress supplied);

x x x

WHEREFORE, foregoing premises considered, it is respectfully prayed that a Temporary Restraining Order And/Or Writ of Preliminary Injunction be issued after summary hearing restraining the defendant from disconnecting the water connection of the members of the plaintiff until further orders from the Honorable Court;

AND AFTER DUE NOTICE AND HEARING

1. Declaring as null and void, PWD Resolution No. 94-023, Series of 1994 for failure to comply with existing laws and Letters of Instruction;

2. Ordering the defendant to pay attorney's fees in the amount of P100,000.00;

3. Ordering the defendant to pay exemplary damages in the amount of P100,000.00;

4. Ordering the defendant to pay the cost of suit.

From respondent's allegations and relief prayed for in its complaint, the issue raised is whether PWD Resolution No. 94-023, S. 1994 is valid. Respondent alleged that petitioner did not comply with the requisites of notice, publication and public hearing. Verily, the Court of Appeals did not err in holding that the subject of litigation is incapable of pecuniary estimation.ςηαñrοblεš �νιr†υαl �lαω �lιbrαrÿ

Section 19 of Batas Pambansa Blg. 129 provides that the Regional Trial Courts shall exercise exclusive original jurisdiction in "all civil actions in which the subject of the litigation is incapable of pecuniary estimation."

WHEREFORE, we DENY the petition. The assailed Decision of the Court of Appeals (Third Division) in CA-G.R. SP No. 66037 is AFFIRMED. Costs against the petitioner.

SO ORDERED.

Endnotes:

---

¹ Rollo, pp. 30-41. Ponencia by Associate Justice Regalado E. Maambong and concurred in by Associate Justice Eubolo G. Verzola (now deceased) and Associate Justice Andres B. Reyes, Jr.

² Id., pp. 111-113.

³ Id. at 42-44.

⁴ Ramos v. Stateland Investment Corp., G.R. No. 161973, November 11, 2005, 474 SCRA 726, 737, citing Morta, Sr. v. Ocidental, 308 SCRA 167 (1999).

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