Title
Manila Electric Co. vs. Castillo
Case
G.R. No. 182976
Decision Date
Jan 14, 2013
Meralco disconnected Permanent Light's power over alleged meter tampering without due process; courts ruled defective meter caused inflated bills, awarding damages to respondents.

Case Digest (G.R. No. 182976)
Expanded Legal Reasoning Model

Facts:

  • Parties and Background
    • Petitioner: Manila Electric Company (Meralco), a public electric utility.
    • Respondents: Atty. Pablito M. Castillo and Guia S. Castillo, spouses operating under the trade name Permanent Light Manufacturing Enterprises, engaged in manufacturing and selling fluorescent fixtures, office steel cabinets, and related metal fabrications.
    • Contractual Background:
      • On March 2, 1994, the GSIS awarded a contract to Permanent Light for the supply and installation of 1,200 lateral steel filing cabinets worth P7,636,800.
      • Permanent Light accelerated production to secure a contract for an additional 500 units.
  • Discovery of a Tampered Meter and Subsequent Events
    • Inspection and Findings on April 19, 1994:
      • Meralco’s Fully Phased Inspectors, Joselito Ignacio and Peter Legaspi, inspected Permanent Light’s electric meter.
      • Findings included:
        • Deformation of the terminal seal.
ii. Presence of fake lead covering the meter seal. iii. Misalignment of the 100th dial pointer, suggesting tampering.
  • Based on the Special Investigation Report, Ignacio concluded that the meter was tampered with and initiated an immediate disconnection of the electric service.
  • Subsequent Laboratory Verification and Meter Testing:
    • The disputed meter was taken to Meralco’s laboratory where further tests revealed:
      • Tampering with the ST-5 seal and fake lead cover seals.
ii. Alteration of the meshing adjustment between the gears, causing the meter to fail in registering energy consumption. iii. Intentional realignment of the dial pointer to manipulate readings.
  • Billing Controversies and Payments:
    • Meralco billed Permanent Light an amount (initially P61,709.11) for the unregistered consumption from September 20, 1993, to March 22, 1994, later adjusting the amount after a 10% discount and crediting an initial down payment of P50,000 made by respondents.
    • Additional bills were issued for subsequent periods:
      • A bill for P38,693.53 (March 22, 1994 to April 21, 1994) which respondents refused to pay.
ii. Another bill for P192,009.64 covering November 19, 1993 to April 21, 1994, leading to further contestation.
  • Respondents maintained that there was an unexplainable increase in billed amounts following the installation of a replacement meter on April 20, 1994.
  • Litigation and Procedural History
    • Initiation of Legal Action:
      • On August 2, 1995, respondents filed a Petition for Injunction, Recovery of a Sum of Money, and Damages, seeking:
        • A permanent injunction to prevent disconnection and further billing for unrecorded consumption.
ii. Reimbursement for what they claimed as overpayments, as well as the reinstatement of the original meter which they alleged accurately recorded consumption.
  • The case was initially assigned to Branch 162 of the Pasig RTC and later reassigned to Branch 168 after procedural changes, including recusal and reassignment of judges.
  • Trial Court Decision (July 9, 2003):
    • The RTC ruled in favor of respondents on several grounds:
      • Found that Meralco disconnected electricity without affording due process.
ii. Determined that despite evidence of meter tampering, the discovery did not meet the statutory requirement of being witnessed by a law enforcement officer or authorized ERB representative (as required by Section 4 of RA 7832). iii. Awarded respondents P1,138,898.86 for alleged overpayments; P200,000 as moral damages; P100,000 as exemplary damages; and P100,000 as attorney’s fees. iv. Ordered respondents to refund a differential bill of P38,693.53 to Meralco.
  • Court of Appeals Decision (May 21, 2008):
    • The appellate court modified the RTC ruling by:
      • Deleting the award of overpayments (P1,138,898.86) in favor of respondents.
ii. Instead, ordering Meralco to pay temperate damages of P500,000 to respondents for the wrongful disconnection and failure to provide the legally mandated 48-hour notice prior to disconnection. iii. Affirming the imposition of moral and exemplary damages (although, later on, the Supreme Court later adjusted these amounts).
  • Supreme Court Considerations and Final Outcome
    • Grounds for the Petition:
      • Meralco contended that the immediate disconnection was justified on the basis of meter tampering, which should serve as prima facie evidence of illegal use of electricity.
      • Argued that the 48-hour notice requirement should not apply since the disconnection was due to alleged tampering and fraudulent use, not nonpayment.
      • Contested the awards of moral, exemplary, and temperate damages, as well as the methodology used to compute alleged overbilling.
    • Key Factual Findings Relied Upon:
      • Inconsistencies in the inspection report evidencing meter tampering (no authorized government officer was present).
      • The subsequent replacement meter and abrupt increase in recorded consumption, raising questions as to whether the meter was functioning correctly even after replacement.

Issues:

  • Whether respondents were entitled to claim damages for Meralco’s act of disconnecting electricity to Permanent Light on April 19, 1994 without observing due process, specifically the 48-hour written notice as required by law.
  • Whether respondents were entitled to recover actual damages (or equivalently, temperate damages due to the lack of competent proof) for the alleged overbilling of their electric consumption from April 20, 1994 to November 28, 2001.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)

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