Meralco v. Jose
REITERATIONFacts
The Antecedents: Ma. Victoria Jose (Victoria), a customer of Manila Electric Company (MERALCO) since 1987, was inspected by MERALCO Polyphase Inspector Santiago Inoferio on July 14, 1995. Inoferio's Service Inspection Report indicated a "burned out insulation of BCT 24921 xxx & its non-polarity terminal xxx." MERALCO subsequently issued a differential adjustment billing for ₱232,385.20, claiming that from January 29, 1993, to July 4, 1995, the meter defects caused it to register only 50% of Victoria's actual consumption. Victoria requested reconsideration, arguing the defect was a fortuitous event and due to MERALCO's negligence in detection and repair. MERALCO denied the request but offered an installment plan. Victoria refused to pay, and MERALCO sent an Overdue Account Notice threatening disconnection. Procedural History: Victoria filed a Complaint for Injunction with Damages and Writ of Preliminary Injunction and/or Temporary Restraining Order with the RTC. The RTC issued a TRO and a Writ of Preliminary Injunction. After trial, the RTC rendered a Decision on June 1, 1999, ordering MERALCO to permanently desist from collecting the differential billing and from cutting off electric service, and awarding moral damages, exemplary damages, and attorney's fees. MERALCO appealed to the CA, which affirmed the RTC Decision on March 26, 2002. The Petition: MERALCO filed a Petition for Review on Certiorari, assailing the CA Decision for allegedly committing grave abuse of discretion in holding MERALCO liable for damages and in ruling that MERALCO was not entitled to recover the unregistered consumption.
Issue(s)
Whether MERALCO established the factual basis for charging Victoria a differential billing. Whether MERALCO was negligent in the inspection and maintenance of Victoria's electric meter. Whether MERALCO is liable for moral and exemplary damages.
Ruling
The Supreme Court partly granted the petition, affirming the Court of Appeals' Decision with modification. The award of moral and exemplary damages was reduced.
Ratio Decidendi
On the factual basis for differential billing: The Court held that MERALCO failed to establish the factual basis for the differential billing. While the Service Inspection Report was substantial evidence of the meter's defectiveness, it was not evidence of the duration of the defect or the extent of its incapacity to record full consumption. The claim of a 50% under-registration was based on a company policy, not on actual data. Crucially, Victoria's billing history showed no dramatic increase or decrease in consumption during the alleged defective period, contradicting MERALCO's claim of a 50% under-registration. This documented pattern of constancy prevailed over MERALCO's company policy. On MERALCO's negligence: The Court found MERALCO guilty of gross negligence in the maintenance of the electric meter. The meter, installed in 1987, was subjected to a polyphase meter test for the first time in 1995, seven years after installation, despite the standard precaution of testing twice annually. This delay constituted gross negligence, making MERALCO solely liable for any loss arising from the meter's defects, including unregistered and unbilled consumption. Therefore, MERALCO could not pass this liability to Victoria through a differential billing or threat of disconnection. On damages: The Court agreed that MERALCO's gross negligence and arbitrary issuance of the differential billing caused Victoria anxiety and aggravation, making MERALCO liable for moral damages. However, the initial awards of ₱500,000.00 for moral damages and ₱500,000.00 for exemplary damages were deemed excessive. The Court reduced moral damages to ₱100,000.00, considering it commensurate to the suffering, and exemplary damages to ₱50,000.00, for deterrence against similar arbitrary practices.
Main Doctrine
An electric company must establish the factual basis for differential billing, including proof of meter defectiveness, failure to register actual consumption, and absence of negligence in inspection and repair, before it can collect such charges. Gross negligence in meter maintenance can render the electric company solely liable for unregistered consumption.