Boracay Island Water Company v. Malay Resorts Holdings
REITERATIONFacts
The Antecedents: Petitioner Boracay Island Water Company (BIWC) operates water and sewerage utilities in Boracay Island. BIWC issued Terms and Conditions for its Factored Sewer Charging Program, imposing a five-time higher charge for customers connected to its sewer system but not its water system (sewer-only customers) or those with dual water sources. Procedural History: Ambassador in Paradise Corporation and Real Maris Resort & Hotel filed a civil case against BIWC before the Regional Trial Court (RTC) for declaration of nullity of the Program and damages. J. King and Sons Company, Inc., and respondent Malay Resorts Holdings, Inc. (MRHI) intervened. BIWC moved to dismiss, citing failure to state a cause of action and forum shopping, arguing it acted as an agent of the Philippine Tourism Authority (PTA). BIWC specifically claimed MRHI engaged in forum shopping by filing a letter-complaint with the National Water Resources Board (NWRB) regarding the increased sewerage charge, which was discussed in a public conference. The NWRB sought the Department of Justice's (DOJ) opinion on its regulatory power over sewerage utilities. The DOJ opined that the NWRB lacked legal basis to regulate sewerage businesses. The RTC dismissed the complaint and complaints-in-intervention for failure to comply with anti-forum shopping rules, finding that MRHI failed to disclose the NWRB proceedings. The Court of Appeals (CA) reversed, finding that the RTC committed grave abuse of discretion as the NWRB lacked jurisdiction over the subject matter, thus any NWRB judgment would not result in res judicata. The CA also noted that the NWRB's action was limited to the Certificate of Public Convenience (CPC) issue. The Petition: BIWC filed a petition for review on certiorari with the Supreme Court, arguing the CA erred in ruling that lack of NWRB jurisdiction negates forum shopping, and that MRHI committed willful and deliberate forum shopping. BIWC also argued the case was moot as the Program was no longer implemented.
Issue(s)
Whether the Court of Appeals erred in ruling that the Regional Trial Court committed grave abuse of discretion when it dismissed the complaint-in-intervention of MRHI on the ground of forum shopping. Whether the complaint-in-intervention of MRHI should be dismissed for being moot and academic.
Ruling
The petition is DENIED. The Decision dated 28 February 2017 and the Resolution dated 23 October 2017 by the Court of Appeals in CA-G.R. S.P. No. 08412 are AFFIRMED. Civil Case No. 8849 is REMANDED to the court of origin, which is DIRECTED to resolve the case with dispatch.
Ratio Decidendi
On the issue of forum shopping: The Court held that MRHI did not commit forum shopping. The test for forum shopping is the presence of the elements of litis pendentia or res judicata. For res judicata to exist, a prior judgment must have been rendered by a court with jurisdiction over the subject matter. In this case, the NWRB, as confirmed by the DOJ opinion, lacked jurisdiction over the regulation of sewerage utilities and services. Therefore, any proceeding before the NWRB, even if it had occurred, could not result in res judicata in the case before the RTC. The Court distinguished this case from precedents like Villanueva v. Adre, Joy Mart Consolidated, Corp. v. Court of Appeals, and Top Rate Construction & General Services v. Paxton Development Corp., where the potential for conflicting decisions, the grave evil sought to be prevented by the prohibition against forum shopping, was evident. Here, the NWRB did not assume jurisdiction over the issue of sewerage rates, and no order or issuance was presented to show otherwise. Furthermore, MRHI presented a certification from the NWRB stating no pending case. Thus, the RTC committed grave abuse of discretion in dismissing the case on the ground of forum shopping. On the issue of mootness: The Court agreed with MRHI that the issue on the increased sewer rates is capable of repetition yet evading review. The summary dismissal by the RTC prevented MRHI from fully ventilating its claim. The Court noted that the assailed imposition was still in place, and despite the alleged non-implementation of the Program and new rates, the issue persists and needs resolution. However, since factual determination is necessary, the Court remanded the case to the court of origin for resolution, as the Supreme Court is not a trier of facts.
Main Doctrine
Forum shopping requires the presence of litis pendentia or res judicata, which in turn necessitates jurisdiction over the subject matter. Without jurisdiction, the filing of a case in one forum, even if not disclosed in another, does not constitute forum shopping if the potential for conflicting decisions is absent.