G.R. No. 175550, September 17, 2008
DASMARIÑAS WATER DISTRICT, Petitioner, vs. MONTEREY FOODS CORPORATION, Respondent.

FACTS

Respondent Monterey Foods Corporation, a domestic corporation engaged in livestock and agriculture, was issued water permit nos. 17779 and 17780 by the National Water Resources Board (NWRB) for two deep wells in Dasmariñas, Cavite. The water drawn was used solely for its business operations and not for resale. Petitioner Dasmariñas Water District, a government-owned corporation organized under Presidential Decree (PD) No. 198 (the Provincial Water Utilities Act of 1973), filed a complaint for payment of production assessment against respondent in the Regional Trial Court (RTC) of Imus, Cavite. Petitioner invoked Section 39 of PD 198, which authorizes a water district to levy a groundwater production assessment on entities whose commercial or industrial well use injures or reduces the district’s financial condition. It prayed for monthly assessments, actual expenses, and attorney’s fees.
Respondent moved to dismiss the complaint, contending that the RTC lacked jurisdiction. It argued that under PD 1067 (the Water Code of the Philippines), the NWRB had original jurisdiction over disputes relating to water appropriation, utilization, and control. The RTC denied the motion, ruling that the case involved petitioner’s right to collect assessments under PD 198, not a water rights dispute. Respondent then filed a petition for certiorari with the Court of Appeals (CA), which granted the petition and dismissed the complaint. The CA held that the NWRB had original jurisdiction under Articles 88 and 89 of PD 1067, as the complaint pertained to the appropriation and utilization of water, and that petitioner lacked authority to impose assessments without prior NWRB approval. Petitioner elevated the case to the Supreme Court via a petition for review on certiorari.

ISSUE

Whether the RTC or the NWRB has jurisdiction over petitioner’s complaint for collection of water production assessments under Section 39 of PD 198.

RULING

The Supreme Court granted the petition, reversed the CA decision, and reinstated the RTC orders denying the motion to dismiss. It held that the RTC has jurisdiction over the complaint.
The Court emphasized that jurisdiction is determined by the allegations in the complaint. Petitioner’s complaint sought to enforce its right under Section 39 of PD 198 to levy a production assessment due to alleged financial injury caused by respondent’s groundwater extraction. It did not question the validity of respondent’s water permits from the NWRB, nor did it involve a dispute over water appropriation or rights under the Water Code. The Court distinguished this case from NWRB v. CA, where the NWRB’s jurisdiction was upheld over disputes directly involving water rights and permits. Here, the core issue was the collection of a compensatory assessment—a monetary claim arising from a statutory privilege granted to water districts under PD 198. This is essentially a collection suit, a matter inherently within the jurisdiction of regular courts.
The Court clarified that the NWRB’s jurisdiction under Article 88 of PD 1067 is limited to controversies relating to the “appropriation, utilization, exploitation, development, control, conservation and protection of waters.” It does not extend to all water-related conflicts, especially those that are essentially contractual or collection matters stemming from a special law like PD 198. Since the complaint was based on petitioner’s alleged statutory right to compensation for financial injury, not a challenge to respondent’s water permit or use, it fell within the RTC’s general jurisdiction. The Court also noted that PD 198 provides its own enforcement mechanism in Section 39, allowing a water district to seek an injunction and damages for non-payment, which implies judicial recourse to the courts.

DOCTRINES

1. Jurisdiction by Allegations: Jurisdiction over the subject matter is determined by the material allegations in the complaint and the character of the relief sought, not by the defenses or assertions in the answer or motion to dismiss.
2. Limited Jurisdiction of NWRB: The National Water Resources Board has original jurisdiction under Article 88 of PD 1067 only over disputes directly involving water rights, appropriation, utilization, exploitation, development, control, conservation, and protection of waters. It does not encompass all water-related suits, particularly those that are essentially collection or enforcement actions based on a separate statutory right.
3. Collection Suits as Judicial Matters: An action for the collection of a monetary assessment or compensation, even if arising from a water-related statute, is inherently a civil action within the jurisdiction of regular courts when it does not directly challenge or require adjudication of water rights or permits under the Water Code.
4. Statutory Enforcement Mechanism: When a special law, such as PD 198, provides a specific right and a remedy for its enforcement (e.g., injunction and damages), the regular courts are presumed to have jurisdiction to adjudicate claims arising from the violation of that right, absent a clear legislative intent to vest exclusive jurisdiction in a quasi-judicial body.