Case Summary (G.R. No. 255038)
Service Agreements and Dispute
Yu held Service Identification No. 801498301 for her residence and NSIC’s factory at 8 Dr. Manuel St., Fortune Village, Valenzuela City. On December 9, 1999, MERALCO inspected the installed meter, discovered an alleged reversing current transformer, issued a disconnection notice the same day, and cut off power to both premises without prior written notice. Yu filed for damages and injunctive relief on January 24, 2000, alleging due process deprivation and significant actual and moral injuries.
RTC Findings and Decision
The Regional Trial Court (Branch 172, Valenzuela City) ruled on July 27, 2018 that MERALCO violated Section 6 of RA 7832 by disconnecting service without due notice. It granted permanent mandatory injunction, awarded Yu PHP 300,000 temperate damages, PHP 100,000 moral damages, and PHP 50,000 exemplary damages (all with six percent interest), and dismissed MERALCO’s counterclaim for differential billings. The court found no competent proof of tampering or of Yu’s actual losses.
CA Findings and Decision
The Court of Appeals affirmed the RTC decision on November 26, 2020, but increased exemplary damages from PHP 50,000 to PHP 500,000. It held that (1) even in flagrante delicto, prior written notice is required under RA 7832; (2) inspection must be witnessed by law enforcement or an ERB representative; and (3) MERALCO did not serve adequate notice.
Issues Presented
- Whether MERALCO complied with RA 7832’s disconnection requirements.
- Whether MERALCO is liable for temperate, moral, and exemplary damages.
- Whether MERALCO is entitled to its counterclaim for differential billings.
Petitioner’s Contentions
MERALCO asserts it served notice by obtaining Sandel’s signature on a same-day disconnection notice and that flagrante delicto justified immediate cut-off. It denies forcible entry or bad faith, challenges the corporate respondent’s standing to claim NSIC’s losses, disputes proof of Yu’s moral damages, and maintains that evidence lost in a fire suffices to establish tampering.
Respondent’s Contentions
Yu contends that MERALCO’s photographic and testimonial evidence failed to prove tampering or post-fire destruction of the reversing transformer. She invokes a 48-hour written notice requirement under Section 97, PSC Revised Order No. 1, argues deprivation of property without due process, and argues that if substantial pilferage existed, MERALCO would have filed criminal charges.
Applicable Law
Constitutional Basis: 1987 Constitution – due process guarantees under Article III, Section 1.
Statutory Basis: Republic Act No. 7832 (Anti-Electricity Pilferage Act of 1994), specifically Sections 4(a) (prima facie evidence) and 6 (disconnection procedure).
Analogous Regulation: PSC Revised Order No. 1, Section 97 – 48-hour notice for service disconnection. Energy Regulatory Commission (ERC) rules.
Supreme Court Analysis on Disconnection Requirements
RA 7832 requires (1) discovery of tampering under Section 4(a), (2) witnessing and attestation by law enforcement or an authorized ERB/ERC representative, and (3) prior written due notice. The Court interprets “due notice” to mean at least 48 hours’ written notice, by analogy to PSC Revised Order No. 1 and consistent precedents (Spouses Quisumbing v. MERALCO). MERALCO’s same-day notice did not afford Yu an opportunity to respond, violating procedural due process and presuming bad faith.
Analysis of Damages
Temperate Damages: Reduced from PHP 300,000 to PHP 50,000, reflecting Yu’s direct injury as a residential account holder, excluding NSIC’s corporate losses which belong to NSIC itself.
Moral Damages: Deleted for lack of competent evidence; Yu di
Case Syllabus (G.R. No. 255038)
Facts
- MERALCO is a public utility corporation supplying electric power in Metro Manila and nearby areas.
- Lucy Yu, a manufacturer of appliance spare parts through New Supersonic Industrial Corporation (NSIC), is a registered MERALCO customer under Service Identification No. 801498301.
- The service account covered both Yu’s residence and NSIC’s factory at No. 8 Dr. Manuel St., Valenzuela City; another account (SIN 592677701) also supplied NSIC’s factory.
- On December 9, 1999, MERALCO representatives, led by Engr. William T. Chan and accompanied by plain-clad armed persons and PNP officers, inspected Yu’s electric meter and allegedly discovered a reversing current transformer.
- Chan’s team issued a Notice of Disconnection on the same day and immediately cut off the electricity to Yu’s home and NSIC’s factory.
- Yu filed a complaint on January 24, 2000 for damages and prayed for preliminary and permanent mandatory injunction, alleging lack of due process and claiming sleepless nights, anxieties, wounded feelings, besmirched reputation, and business losses.
- The RTC granted preliminary injunction on December 12, 2003; MERALCO fully restored service only in 2008.
- At trial, Yu presented NSIC’s production manager and a data sheet claiming ₱23,500,000.00 in production losses; MERALCO disputed entry was forcible and contended the inspection complied with RA 7832.
- MERALCO confiscated the transformer, but a fire destroyed most evidence; remaining photographs, a field order, and testimonies were presented.
- MERALCO claimed differential billing losses of ₱33,936,707.15 and counterclaimed for that amount plus attorney’s fees, exemplary damages, and costs.
Procedural History
- RTC Decision (July 27, 2018): found MERALCO violated Section 6 of RA 7832, granted permanent mandatory injunction, awarded Yu ₱300,000 temperate, ₱100,000 moral, ₱50,000 exemplary damages (6% interest), and dismissed MERALCO’s counterclaim.
- CA Decision (November 26, 2020): affirmed RTC, increased exemplary damages to ₱500,000.
- MERALCO petitioned the Supreme Court for review on certiorari raising issues on notice, damages, and counterclaim entitlement.
Issues
- Whether MERALCO complied with RA 7832 disconnection requirements.
- Whether MERALCO i