BF NORTHWEST HOMEOWNERS ASSOCIATION, INC., PETITIONER, VS. INTERMEDIATE APPELLATE COURT AND BF HOMES, INC., RESPONDENTS.

The core issue for resolution is: which Court has jurisdiction
over actions to annul Orders, Resolutions and/or Decisions of the National
Water Resources Council (NWRC) relative to water rates — the Regional Trial
Court or the Court of Appeals?

The antecedent facts have been succinctly stated in the Solicitor
General’s Comment as follows:

“Respondent BF Homes, Inc. is a subdivision owner and
developer in Paranaque, Metro, Manila. In 1973, BF Homes, Inc. filed a petition for a certificate of public
convenience and for authority to charge water rates before the then Board of
Power and Waterworks (See records of Civil Case No. 6307, RTC, Makati, Branch
143). In 1977, the Board of Power and
Waterworks was abolished and its powers and functions relative to waterworks
were transferred to the National Water Resources Council (NWRC) (Sec. 11 [e],
PD No. 1206).

“On October 24, 1983, NWRC in its Resolution No. 22-A, series
of 1983, granted a Certificate of Public Convenience to respondent BF Homes,
Inc., for the operation and maintenance of waterworks system at the BF Homes
Subdivision in Paranaque, Metro Manila. In the same resolution, NWRC approved the Compromise Agreement dated May
24, 1983 entered into between BF Homes, Inc. and BF Paranaque Homeowners
Association, Inc., in NWRC Case No. 78-037, embodying the water rates
chargeable to customers.

On November 21, 1983 and December 16, 1983, NWRC issued two other
orders increasing the water rates in view of the increase in the costs of
electricity. x x x ” (Solicitor
General’s Comment, pp. 84-85, Rollo).

It is the foregoing
Resolution, Orders and Compromise Agreement that triggered the institution of
three separate cases set out herein below mainly by petitioner BF Northwest
Homeowners Association, Inc.

The First Suit

BF Northwest Homeowners Association

Inc. vs. BF Homes, Inc.

Civil Case No. 6307 below

AC-G. R. No. 02778

On February 1, 1984,
petitioner BF Northwest Homeowners Association, Inc., (the ASSOCIATION, for
brevity), filed a Petition for Certiorari, Prohibition and Mandamus
before the Regional Trial Court in Makati, Rizal, Branch 143 (docketed as Civil
Case No. 6307), to enjoin BF Homes, Inc. (HOMES, for short) from collecting
from ASSOCIATION members the adjusted water rates for being arbitrary and
unreasonable and praying that HOMES be ordered to refund monies it had
collected from consumers over and above the old water rates.

Regional Trial Court
Judge Zoilo Aguinaldo denied the Motion to Dismiss filed by HOMES and upheld
his jurisdiction to entertain the suit. However, on Certiorari, Prohibition
and Mandamus filed by HOMES before respondent Appellate Court (BF HOMES,
Inc. & NWRC vs. Hon. Zoilo Aguinaldo, etc., Northwest BF Homeowners
Association, Executive Villager’s Society and 5-H Club, Inc., AC-G.R. No.
SP-02778),^[1] the latter Court, on March 27, 1984,
reversed and held that the Regional Trial Court was without jurisdiction to
entertain the case since NWRC, which took over the functions of the Public
Service Commission, has the rank of a Regional Trial Court, hence, an NWRC
decision on water rates may only be reviewed by the Supreme Court (as then
provided by CA No. 146, [section 35] as amended),^[2] and now by the Court of Appeals, pursuant to
BP 129, Section 9 (3).^[3] Said Appellate Court Decision shall hereinafter
be referred to as the “SP 02778 Decision”.

The Second Case

Antonio Pedro vs. B.F. Homes, Inc.

Civil Case No. 7546 below

G.R. No. 68387

On June 13, 1984, suit
was filed by one Antonio Pedro, President of the ASSOCIATION, before the
Regional Trial Court of Makati, Branch 148 (Civil Case No. 7546) against HOMES
“to declare the Decision of the NWRC (increasing the rates chargeabale by
HOMES) null and void because it was rendered without hearing and, therefore,
without due process of law”, and to enjoin the enforcement by HOMES of
those “exhorbitant, confiscatory and discriminatory water rates”.

On August 6, 1984, Trial
Judge Jesus F. Guerrero dismissed the Complaint on the ground of lack of
jurisdiction guided by the “persuasive force and effect” of the pronouncement
of the Appellate Court in the “SP 02778 Decision”.

Antonio Pedro challenged
the Order of dismissal in a Petition for Review with Mandamus &
Preliminary Writ of Injunction filed before this Court on August 23, 1984. Originally, the case was referred by this
Court (Second Division) to the Appellate Court on September 3, 1984, but the
latter Court, in AC-G.R. No. SP 04197^[4] on September 27, 1985, returned the case to
this Court, on the ground that what is involved is a “purely legal
question, particularly, the issue of jurisdiction.”

On July 7, 1986, this Court (Second Division), dismissed the
petition for lack of merit. Antonio
Pedro’s Motion for Reconsideration was also denied, with the denial being
declared final on August 25, 1986.

The Third Suit and Present Petition

BF Northwest Homeowners’ Association Inc.

vs. BF Homes, Inc.

Civil Case No. 7584 below

AC-G.R. CV No. 04912

On June 18, 1984, or five
(5) days after the Second Case was filed, petitioner ASSOCIATION instituted
another ordinary civil suit (Civil Case No. 7584) with the Regional Trial Court
(RTC), National Capital Region, in Makati, Branch 143, against private
respondent HOMES geared towards the same objective of annulling the
Decision/Orders of the NWRC which granted HOMES authority to charge the
increased water rates on the ground that it was rendered without procedural due
process and without or in excess of jurisdiction and with grave abuse of
discretion; and that it is not bound by the Compromise Agreement since it was
not a party thereto.

The Trial Court, with Judge Zoilo Aguinaldo again presiding,
dismissed the suit, on the ground of lack of jurisdiction. On appeal, respondent Appellate Court, in
its Decision promulgated on August 16, 1985 in AC-G.R. CV No. 04912,^[5]
sustained the dismissal (1) because of the non-inclusion of the NWRC as an
indispensable party defendant, and (2) on the ground of res judicata,
the same issues raised having been previously litigated and decided by the Appellate Court in the “SP 02778
Decision”.

Hence, this Petition, with the ASSOCIATION assailing the
foregoing grounds of dismissal and seeking a re-examination of the
pronouncement in the “SP 02778 Decision” that:

“since the National Water Resources
Council was invested with the same powers and functions of the former Public
Service Commission in so far as waterworks is concerned it is reasonable to
conclude that the Commission and the Council that substituted it are identical,
hence, the Council is on equal footing with the Regional Trial Court.”

The re-examination sought
is impressed with merit.

The National Water Resources Council (NWRC) was created by P.D.
No. 424 on March 28, 1974 and was vested with the general power to coordinate
and integrate water resources development, and among others, to formulate and
promulgate rules and regulations for the exploitation and optimum utilization
of water resources, including the imposition on water appropriators of such fees or charges as may be deemed
necessary by the Council for water resources development.

P.D. No. 1067, which enacted the Water Code of the Philippines,
identified the NWRC as the administrative agency for the enforcement of its
provisions and was “authorized to impose and collect reasonable fees or
charges for water resources development from water appropriators” (Art.
83). The provisions of said statute pertinent to this case read:

“Art. 87. The Council
or its duly authorized representatives, in the exercise of its power to
investigate and decide cases brought to its cognizance, shall have the power to
administer oaths, compel the attendance of witnesses by subpoena and the
production of relevant documents by subpoena duces tecum.

“Non-compliance or violation of such orders of subpoena and
subpoena duces tecum shall be punished in the same manner as indirect contempt
of an inferior court upon application by the aggrieved party with
the proper Court of First Instance in accordance with the provision of Rule 71
of the Rules of Court.”

“Art. 89. The
decisions of the Council on water rights controversies may be appealed to
the Court of First Instance of the province where the subject matter of the
controversy is situated within fifteen (15) days from the date the party
appealing receives a copy of the decision, on any of the following grounds: (1) grave abuse of discretion; (2) question
of law; and (3) questions of fact and
law.” (all underscoring ours).

Plainly, the NWRC is ranked with “inferior courts”,
which, under the Interim Rules and Guidelines promulgated by this Court on
January 11, 1983, are listed as the Metropolitan Trial Courts, Municipal Trial
Courts and Municipal Circuit Trial Courts. Explicit as well is the proviso that NWRC decisions on water rights
controversies are appealable to the Court of First Instance. In the light of those specific provisions,
we find no room for the pronouncement of the Appellate Court in the “SP
02778 Decision” that the NWRC is at par with the Regional Trial Court.

Nor is there basis for the conclusion in the SP “02778
Decision” that because the NWRC, which substituted the Public Service
Commission, is vested with the same powers and functions as said Commission in
so far as waterworks are concerned, they are identical. The Public Service Commission was abolished
and replaced by several specialized regulatory boards, namely, the Board of
Transportation, the Board of Communications, and the Board of Power and
Waterworks (P.D. No. 1 [Integrated Reorganization Plan; Letter of
Implementation No. 11. Rulings and
decisions of the Boards were appealable in the same manner as the rulings and
decisions of the Public Service Commission, that is, to the Supreme Court. It is those Boards therefore, which may be
considered at par with the
Public Service Commission.

Pursuant to P.D. No. 1206
creating the Department of Energy, the Board of Power and Waterworks was
abolished and its functions relative to waterworks were transferred to the
NWRC. The NWRC was not given the
stature of the Public Service Commission. On the contrary, its inferior status, vis-a-vis the Public Service Commission, is further
shown by the following considerations: 1) the Commissioners of the Public Service Commission were expressly
conferred the rank and privileges of Judges of Courts of First Instance (Sec.
2, CA No. 146, as amended by R.A. Nos. 178 and 2677). On the other hand, the NWRC is not composed of Commissioners. Its membership is confined to specified
officials headed by the Secretary of Public Works, Transportation and
Communications (Sec. 3, P.D. No. 424). 2) While the Commission may summarily punish for contempt (Sec. 29, CA
No. 146), the NWRC is not empowered to do so. The aggrieved party must file an application with the proper Regional
Trial Court (Art. 87, P.D. No. 1067). 3) It was the Supreme Court which was vested with jurisdiction to
review, modify or set aside any order, ruling, or decision of the Commission
(Sec. 35, CA No. 146). In contrast,
decisions of the NWRC on water rights controversies are appealable to the proper
Regional Trial Court (Art. 89, P.D. No.
1067).

The logical conclusion,
therefore, is that jurisdiction over actions for annulment of NWRC
decisions lies with the Regional Trial Courts, particularly, when we take note
of the fact that the appellate jurisdiction of the Regional Trial Court over NWRC
decisions covers such broad and all embracing grounds as grave abuse of
discretion, questions of law, and questions of fact and law (Art. 89, P.D. No.
1067. This conclusion is also in
keeping with the Judiciary Reorganization Act of 1980, which vests Regional
Trial Courts with original jurisdiction to issue writs of certiorari,
prohibition, mandamus, etc. (Sec. 21 [1], B.P. Blg. 129) relating to
acts or omissions of an inferior Court (Sec. 4, Rule 65, Rules of Court).

Considering the
specificity with which P.D. No. 1067, a special law, treats appeals from the
NWRC there is no room to apply Section 9[3] of B.P. Blg. 129, (supra), a
general law, which confers exclusive appellate jurisdiction to the Court of
Appeals over decisions of quasi-judicial agencies. The fact that one is special and the other is general creates a
presumption that the special (P.D. No. 1067) is to be considered as remaining
an exception to the general (B.P.
Blg. 129, section 9[3]), one as a general law of the land, the other as the
law of a particular case.^[6]
Neither would Section 9[2] of the same law^[7]
giving the Court of Appeals exclusive
original jurisdiction over actions
for annulment of judgments of Regional Trial Courts find applicability since
the NWRC is not on equal footing with the Regional Trial Court.

The distinction made in the “SP 02778 Decision” between
“water rights controversies” which it maintains are appealable to the
Regional Trial Courts, and “water rates disputes” which it says are
appealable to the Court of Appeals, is not, to our minds, well taken. Where the law makes no distinction, Courts
should neither make one.^[8]
Besides, considering that rate-fixing is merely an incident to the grant of a
certificate of public convenience, it would be lopsided, indeed, if disputes
over water rates, should be held appealable to the Court of Appeals while
controversies over water rights, the latter being the privilege granted by the
government to appropriate and use water (Art. 13, P.D. No. 1067) and,
therefore, a primary right, would be appealable only to the Regional Trial
Court. This would also inevitably
result in “split-jurisdiction” which is not favored, and in
multiplicity of suits, a situation obnoxious to the orderly administration of
justice.^[9]

As maintained, however, by the Solicitor General and upheld by
respondent Appellate Court since Decision/Orders of the NWRC are assailed, the
latter agency should be impleaded as an indispensable party defendant in order
that any judgment could be effective and binding on it, and so that complete relief may be accorded to the
parties.

We realize that the
Second Division of this Court, in dismissing the Petition in the Second Case,
had affirmed, in effect, the “SP 02778 Decision” and that,
ordinarily, it is a final and executory judgment. Considering, however, that under governing laws, it is clearly
the Regional Trial Court which has jurisdiction over the subject matter
involved herein, and that when the question of jurisdiction is concerned there
is no res judicata nor
bar by prior judgment, and the issue can be raised at any stage of the
proceedings,^[10] particularly, where as in this case an
indispensable party, the NWRC, has not been impleaded, weightier legal
considerations and the broader interests of justice constrain us to grant the
re-examination prayed for.

WHEREFORE, the Decision of respondent Appellate Court
in AC-G.R. No. CV-04912 is SET ASIDE, and this case remanded to the Regional
Trial Court, National Capital Region, Branch 143, for trial on the merits of
Civil Case No. 7584. The National Water
Resources Council shall be deemed impleaded as a party defendant in the said
case. No costs.

SO ORDERED.

Teehankee, C.J., Yap, Fernan, Narvasa, Gutierrez, Jr., Cruz,
Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, and Cortes, JJ., concur.

^[1]
Justice Jose F. Racela, Jr., (ponente), concurred in by Justices Simeon M.
Gopengco and Lino M. Patajo.

^[2]
CA No. 146 x x x

SEC. 35. The Supreme Court is
hereby given jurisdiction to review any order, ruling, or decision of the Commission
and to modify or set aside such order, ruling, or decision when it clearly
appears that there was no evidence before the Commission to support reasonably
such order, ruling, or decision, or that the same is contrary to law, or that
it was without the jurisdiciton of the Commission. The evidence presented to the Commission, together with the
record of the proceedings before the Commission, shall be certified by the
secretary of the Commission to the Supreme Court. Any order, ruling, or decision of the Commission may likewise be
reviewed by the Supreme Court upon a writ of certiorari in proper cases. The procedure for review, except as herein
provided, shall be prescribed by rules of the Supreme Court.

^[3]
“Sec. 9. Jurisdiction, – The
Intermediate Appellate Court shall exercise: x x x

“(3) Exclusive appellate jurisdiction over all final judgments,
decisions, resolutions, orders, or awards of Regional Trial Courts and
quasi-judicial agencies, instrumentalities, boards or commissions, except those
falling within the appellate jurisdiction of the Supreme Court in accordance
with the Constitution, the provisions of this Act, and of subparagraph (1) of
the third paragraph and subparagraph (4) of the fourth paragraph of Section 17
of the Judiciary Act of 1948. x x x
“

^[4]
Third Special Cases Division, composed
of Justices Milagros A. German, Jose A. R. Melo, and Alfredo M. Lazaro
(ponente).

^[5]
Penned by Justice Jorge R. Coquia, with
the concurrence of Justices Mariano A. Zosa, Floreliana Castro Bartolome, and
Bienvenido C. Ejercito.

^[6]
Sto. Domingo vs. Delos Angeles,
96 SCRA 139 (1980).

^[7]
Sec. 9. Jurisdiction. – The Intermediate Appellate Court shall exercise; x x x

(2) Exclusive original jurisdiction over actions for annulment of
judgments of Regional Trial Courts; and x x x x

^[8]
Colgate-Palmolive Phil. Inc. vs.
Gimenez, 1 SCRA 267 (1961).

^[9]
Gonzales vs. Province of Iloilo,
38 SCRA 209 (1971).

^[10]
See Calimlim, et als., vs. Hon.
Pedro A. Ramirez, et als., No. L-34362, November 19, 1982, 118 SCRA 399;
Florendo, Jr., vs. Coloma, L-60544, May 19, 1984, 129 SCRA 304;
Encarnacion vs. Baltazar, L-16883, March 27,1961, 1 SCRA 860.