G.R. No. 170446 ; March 23, 2011
EDGEWATER REALTY DEVELOPMENT, INC., Petitioner, vs. METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM and MANILA WATER COMPANY, INC., Respondents.

FACTS

Petitioner Edgewater Realty Development, Inc. (ERDI) owned parcels of land in Marikina City occupied by informal settlers. ERDI obtained a final court decision for the settlers’ eviction. To address the problem, ERDI and the Municipality of Marikina executed a Memorandum of Agreement (MOA) on April 14, 1994, designating one of ERDI’s properties as a relocation site. The MOA authorized the Municipality to lay groundwork for community infrastructures. Subsequently, ERDI rescinded the MOA due to the Municipality’s breaches, and the rescission was confirmed by final judgments from the Marikina RTC, the Court of Appeals, and the Supreme Court. The MTC also issued a break-open and demolition order against the settlers.
ERDI discovered that the settlers had water connections on its property. It wrote to respondent Metropolitan Waterworks and Sewerage System (MWSS) on September 13, 1995, requesting a hold on implementing a water distribution system until an agreement was signed. Despite this, some settlers had existing connections, and others had pending applications. ERDI filed a complaint for injunction against MWSS before the Quezon City RTC, which issued a writ of preliminary injunction. ERDI later amended its complaint to include respondent Manila Water Company, Inc. (MWCI), which had taken over operations under a concession agreement. MWCI stated it allowed settlers to apply for registration of connections based on clearances from the Marikina City Government but stopped processing applications upon receiving ERDI’s letter.
The RTC declared the water connections illegal and permanently enjoined MWSS and MWCI from installing new connections but refused to order the removal of existing ones, stating ERDI’s remedy was to await the execution of the eviction order. The RTC also allowed MWCI to collect payment for water used by settlers with connections existing prior to the injunction. The Court of Appeals affirmed the RTC decision.

ISSUE

1. Whether the Court of Appeals erred in failing to rule that MWSS and MWCI can be compelled to dismantle existing water connections on ERDI’s land occupied by informal settlers.
2. Whether MWCI can collect payment for water connections on that land.

RULING

1. The Court of Appeals did not err. The Supreme Court held that ERDI could not compel MWSS and MWCI to dismantle the existing water connections. First, ERDI’s invocation of Republic Act (R.A.) 8041 (the National Water Crisis Act) as a new legal basis was raised only on appeal and could not be entertained. Second, assuming R.A. 8041 applied, the water connections were not “illegal connections” under the law, as they were either installed by the water utilities themselves or illegally installed by settlers but subsequently ratified by the utilities; illegal connections under R.A. 8041 require lack of authorization from the water utility, not from a third party like the landowner. Third, ERDI could not invoke the MWSS Charter (R.A. 6234), as the rights and remedies for removing illegal connections thereunder belong to the water utilities, not to a private landowner.
The Court noted that the water connections were likely established when the MOA was still in force, as it authorized infrastructure development. While the MOA was later rescinded, the obligation to remove the structures fell on the Municipality of Marikina, not on the respondent water utilities who were not parties to that case. ERDI’s proper remedy is to seek execution of the final judgments in the ejectment case and the case for rescission of the MOA to evict the settlers and remove the structures.
2. MWCI can collect payment. The Supreme Court affirmed the RTC and CA rulings allowing MWCI to collect payment for water used by settlers with connections existing prior to the issuance of the writ of preliminary injunction. The Court found no error in this disposition.
The petition was denied, and the assailed Court of Appeals decision was affirmed.