Collateral attack

The constitutionality of a presumably valid law can not be collaterally attacked. It can only be annulled in a direct proceeding. This is one of the pronouncements of the court in this case of a municipal water district (DWD).

DWD is a government owned and controlled corporation organized by the Sangguniang Bayan of a municipality as the exclusive franchise holder in the maintenance and operation of water supply and in the distribution thereof for domestic, commercial or industrial uses within its district.

Located and operating within its district is MFC, a domestic corporation engaged in livestock and agriculture business. MFC was issued water permits by the National Water Resources Board (NWRB) to put up two deep wells for drawing water to be used exclusively for its own business and not for purposes of selling it to third persons for profit.

Since DWD found that the operation of MFC’s two deep wells has adversely affected its financial condition, DWD invited MFC’s representative/s to discuss the matter of production assessment on the basis of the water extracted and consumed from the said deep wells. Thereafter, DWD also conducted inspection of the deep wells through its authorized inspectors who submitted its findings on the daily and average monthly consumption of said deep wells. Based on these findings the DWD approved a resolution requiring MFI to pay a monthly production assessment of P55,112.46 at the rate of P2 per cubic meter.

MFC however failed and refused and continued to fail and refuse DWD’s demands. Thus on March 30, 2004, DWD filed a complaint for payment of production assessment against MFC in the Regional Trial Court. DWD based its action on Section 39 of PD 198 otherwise known as the Provincial Water Utilities Act of 1973, under which it was given a franchise. Pursuant to said section, its board may adopt and levy a ground water production assessment in the event it finds after due notice and hearing, that production of ground water by other entities within its district for commercial and industrial uses is injuring or reducing the district’s financial condition.

MFC filed a motion to dismiss the action on the ground of lack of jurisdiction to hear the case allegedly because under PD 1067 (otherwise known as the Water Code of the Philippines) it was the NWRB that had jurisdiction over all disputes relating to the expropriation, utilization, exploitation, development, control, conservation and protection of water.

The RTC however denied the motion to dismiss, ruling that it had jurisdiction over the subject matter of the case because it referred to the right of DWD to collect production assessment.

In a petition for certiorari before the Court of Appeals (CA), MFC questioned this RTC ruling. But aside from the issue of jurisdiction, it also questioned the authority of DWD to impose the production assessment. It challenged the constitutionality of section 39, PD 198 and contended that said provision was an undue delegation of legislative power.

In its decision, the CA ruled not only on the issue of jurisdiction but also on the constitutionality of PD 198 section 39. Was the CA correct?

No. The constitutionality or validity of laws, orders or such other rules with the force of law cannot be attacked collaterally. There is a legal presumption of validity of these laws. Unless a law or rule is annulled in a direct proceeding, the legal presumption of its validity stands.

Besides a law is deemed valid unless declared null and void by a competent court; more so when the issue has not been duly pleaded in the trial court. The question of constitutionality must be raised at the earliest opportunity. Courts will not anticipate a question of constitutional law in advance of the necessity of deciding it (Dasmarinas Water District vs. Monterrey Foods Corp, G.R. 175550, September 17, 2008)

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