G.R. No. 152769 - Manila Electric Co. vs. Jose

Case Digest (G.R. No. 152769)
Expanded Legal Reasoning Model

Facts:

Parties and Service Background

Manila Electric Company (MERALCO) is the petitioner, while Ma. Victoria D. Jose (Victoria) is the respondent.
Victoria has been a MERALCO customer since 1987 with the following details:

Account No. 14419-2260-23
Meter No. 31D551-57
Service address at No. 26, 5th Street, Gilmore Ave., New Manila, Quezon City

Inspection and Initial Findings

On July 14, 1995, Meralco Polyphase Inspector Santiago Inoferio conducted an inspection at Victoria’s residence.
The inspection report revealed defects in the electric meter, specifically burned-out insulation of BCT and non-polarity terminal issues.
Following the inspection, Inoferio recommended that Victoria’s billing be adjusted to reflect the defect.

Billing Adjustment and Company Communication

On October 3, 1995, Meralco issued a differential adjustment billing amounting to P232,385.20.
The explanation attached to the billing stated:

The billing from January 29, 1993, to July 04, 1995, was affected by metering defects.
The meter registered only 50% of the actual kilowatt-hour (KWH) consumption, necessitating a correction from 50% to 100% registration.

On October 27, 1995, Victoria sent a letter requesting reconsideration on the ground that the defect was due to a fortuitous event and Meralco’s negligence in promptly detecting and repairing the defect.

Dispute and Legal Proceedings

Meralco did not accede to Victoria’s request and instead offered an installment payment scheme, maintaining that the billing adjustment was valid.
Victoria refused to pay the differential billing, prompting Meralco to send an Overdue Account Notice on November 21, 1995, with a disconnection warning effective November 24, 1995.
In response, Victoria filed a Complaint for Injunction with Damages and a Writ of Preliminary Injunction at the Regional Trial Court (RTC), Branch 223, Quezon City.

Court Decisions and Appeals

The RTC issued a Temporary Restraining Order and a Writ of Preliminary Injunction on January 22, 1996.
On June 1, 1999, after trial on the merits, the RTC rendered a decision in favor of Victoria, ordering Meralco to:

Permanently desist from collecting the differential billing of P232,385.20.
Permanently desist from disconnecting her electric service.
Pay moral damages of P500,000.00, exemplary damages of P500,000.00, attorney’s fees of P100,000.00, and the costs of the suit.

Meralco filed an appeal to the Court of Appeals (CA), which in its March 26, 2002 Decision affirmed the RTC ruling.
Without filing a motion for reconsideration of the CA Decision, Meralco elevated the case to the Supreme Court via a Petition for Review on Certiorari under Rule 45.

Meralco’s Arguments in the Petition

Meralco contended that:

The CA committed grave abuse of discretion by holding Meralco liable for moral damages, exemplary damages, and attorney’s fees.
The CA erred in ruling that Meralco was not entitled to recover unregistered consumption arising from the defective meter.

Meralco’s main defense was based on:

The contractual provision obligating Victoria to pay for unregistered or unbilled electric consumption in case of meter defects.
The claim that the meter registered only 50% of the actual consumption due to the defect.

Evidentiary Issues Concerning Meter Defect

The evidence included:

Inspector Inoferio’s Service Inspection Report, which stated the physical defects found in the meter.
Meralco’s internal reports and company billing policies indicating that, by policy, a defective meter’s failure would be presumed to record only 50% of consumption.

Victoria’s billing history, which did not show a dramatic increase or decrease in consumption during the alleged period of defect, thereby questioning the basis for the 50% differential billing claim.
Testimonies and cross-examinations (including evidence from Roberto Salas) attempted to substantiate whether the meter defect could justify the unregistered consumption claim.

Issues:

Validity of Differential Billing and Meter Defect

Whether Meralco validly issued a differential billing for unregistered consumption when the alleged defect in Meter No. 31D551-57 was contested by the billing history.
Whether the determination that the meter registered only 50% of Victoria’s actual consumption was supported by credible and sufficient evidence.

Contractual Obligations and Rights

Whether Victoria’s refusal to pay the differential billing forfeited her right to uninterrupted electric service as claimed by Meralco.
Whether the service contract’s provisions permitting MERALCO’s recovery for unregistered consumption are enforceable when technical and evidentiary issues arise.

Injunctive Relief and Maintenance Negligence

Whether Victoria demonstrated the clear, unmistakable right to continue receiving electric service despite the billing dispute.
Whether Meralco’s seven-year delay in conducting polyphase meter tests constituted gross negligence, thus shifting the responsibility for meter defects and the resulting unregistered consumption to Meralco.

Assessment of Damages

Whether the award of P500,000.00 each for moral and exemplary damages was excessive in light of the actual anxiety and suffering suffered by Victoria.
Whether Meralco’s liability should be modified based on the proportionality of the awards relative to its negligence.

Ruling:

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Ratio:

(Subscriber-Only)

Doctrine:

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Case Digest (G.R. No. 152769) Core Legal Reasoning Model Expanded

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Case Digest (G.R. No. 152769) Expanded Legal Reasoning Model

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Case Digest (G.R. No. 152769)
Core Legal Reasoning Model

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Case Digest (G.R. No. 152769)
Expanded Legal Reasoning Model