LELIZA DELABAJAN, PLAINTIFF-APPELLEE, V. MANILA ELECTRIC COMPANY, DEFENDANT-APPELLANT.

Questioned in this Appeal^[1] filed under Rule 41 of the Rules of Court is the Decision^[2]
dated February 15, 2011 of the Regional Trial Court of Makati City,
Branch 136 (“lower court” for brevity) in Civil Case No. 01-1539 for
“Damages.”^[3] The Appeal also assails the lower court’s Resolution^[4] dated June 6, 2011, which denied defendant-appellant’s eventual Motion for Reconsideration.^[5]

The salient antecedents are those as stated in the assailed Decision^[6] of the lower court:

“This complaint was brought by plaintiff Leliza A. Delabajan (plaintiff-appellee here) against defendant Manila Electric Company (MERALCO) (defendant-appellant MERALCO here) for damages (with application for a preliminary injunction).

Plaintiff resides at no. 1374 Corregidor Street,
Barangay Guadalupe Nuevo, Makati City. On February 1, 2001, persons from
defendant MERALCO inspected the house’s electrical facilities and
found those facilities to have been tampered with.

On June 27, 2001, the parties entered into three
Installment Payment Agreements (the June 27, 2001 IPAs) wherein the
plaintiff agreed to pay defendant MERALCO the total amount of
P577,756.70 for unpaid electricity xxx.

Plaintiff’s family uses two television sets, two refrigerators, two airconditioners and other electric appliances.

On September 12, 2001, the plaintiff, through her
lawyer, wrote defendant MERALCO a letter seeking reassessment and
reconsideration of the penalties and charges imposed upon the plaintiff
xxx.

On September 27, 2001, defendant MERALCO disconnected plaintiff’s electric supply.

On October 17, 2001, plaintiff filed the present complaint for
damages (with application for a preliminary mandatory injunction).

Defendant MERALCO filed an ANSWER alleging that it
properly disconnected the electric services being used by the plaintiff
in view of the provisions of the Electric Services Contracts that allow
it to disconnect tampered electric facilities coupled with plaintiff’s
failure to pay fully her differential and adjusted billings.

In seeking to recover damages against defendant MERALCO,
plaintiff contends that she was only forced to enter into IPAs inasmuch
as defendant MERALCO was threatening to disconnect her electric supply.
Given her lawyers[‘] pending request for a recomputation and
reassessment, plaintiff ascribes bad faith to defendant MERALCO’s
disconnection of the electric supply without prior sufficient warning.

On the part of defendant MERALCO, it contends that the
plaintiff signed the IPAs knowingly fully well the contents thereof. It
relies on the provisions of the contracts of service to justify its
right to effect immediate disconnection of the electric service.”^[7] (Emphasis supplied)

On February 15, 2011, the lower court rendered the assailed Decision,^[8]
ordering defendant-appellant Manila Electric Company
(“defendant-appellant MERALCO” for brevity) to pay Damages to
plaintiff-appellee Leliza A. Delabajan (“plaintiff-appellee” for
brevity). The dispositive portion of the Decision decreed:

“WHEREFORE, in view of the foregoing, the Court RENDERS judgment
ORDERING defendant Manila Electric Company (MERALCO) to immediately
supply plaintiff Leliza A. Delabajan with electric power and to pay the
following to her:

1. P100,000.00 as moral damages;
2. P50,000.00 as exemplary damages;
3. P20,000.00 as attorneys fees; and
4. Cost of suit.

The Court DISMISSES defendant’s counterclaim.

SO ORDERED.”^[9]

After defendant-appellant MERALCO’s Motion for Reconsideration^[10] was denied by the lower court in its assailed Resolution^[11] dated June 6, 2011, defendant-appellant MERALCO filed the Appeal^[12] at bench, praying that:

“WHEREFORE, in the light of the foregoing, it
is respectfully prayed of this Honorable Court that the assailed
Decision dated February 15, 2011 BE REVERSED AND SET-ASIDE and a new one
RENDERED finding that 1) the portion of the decision directing
defendant-appellant Meralco to immediately supply plaintiff-appellant
(sic) Leliza A. Delabajan with electric power and to pay to her
P100,000.00 as moral damages, P50,000.00 as exemplary damages,
P20,000.00 as attorney’s fees and cost of suit null and void; and 2)
ordering plaintiff-appellee to pay the following to defendant-appellant:

1) The balance of the differential bills in the amount of P311,322.92;

2) The sum of P500,000.00 by way of moral damages;

3) The sum of P500,000.00 by way of exemplary damages; and

4) Attorney’s fees in the amount of twenty percent (20%) of the damages herein claimed.

Other reliefs just and equitable under the foregoing premises are also prayed for.”^[13] (Emphasis was made in the original)

The Appeal raised the following errors:

“I. THE LOWER COURT ERRED GRAVELY IN FINDING THAT THE
DISCONNECTION OF PLAINTIFF-APPELLEE’S ELECTRIC SERVICE WAS DUE TO
INSPECTION CONDUCTED ON FEBRUARY 01, 2001

II. THE LOWER COURT ERRED GRAVELY IN FINDING THAT
PLAINTIFF-APPELLEE IS ENTITLED TO PAYMENT OF MORAL AND EXEMPLARY DAMAGES
AS WELL AS ATTORNEY’S FEES”^[14]

Despite the failure of plaintiff-appellee to file its Appellee’s
Brief, it is nevertheless Our “primary duty to render or dispense
justice”^[15] in this case in accordance with the facts and law.

Contrary to defendant-appellant’s arguments in its assigned error I, defendant-appellant MERALCO’s disconnection of plaintiff-appellee’s electric service was without proper basis.

Defendant-appellant MERALCO had argued as follows:

“x x x Defendant-appellant begs to differ with the findings of
the lower court. The lower court, with all due respect, committed a
serious error in ruling that plaintiff-appellee is entitled to immediate
reconnection of service and in awarding damages and attorney’s fees in
her favor despite the clear absence of any legal and factual bases
thereof.

x x x On February 01, 2001, plaintiff-appellee was found using
tampered electric service during the inspection conducted by
defendant-appellant’s service inspectors registered in the name of Norie
Ann, Reynaldo and Leonora (all surname[d] Restauro) but actually used
by the plaintiff-appellee, to wit:

Norie Ann Restauro
A jumper was connected to her electric service

Reynaldo Restauro
Terminal Seal was cut. An airpump and airconditioning units were connected outside of his metered service.

Leonora Restauro
The terminal seal was cut.
The sealing wires of the lead cover seals were cut.
The meter was with an open potential link.

x x x Consequently, plaintiff-appellee was billed
P577,756.65 as differential billings for the three (3) electric service
she actually used registered under Service Identification Nos.
431305001 (P234,701.95), 431305101 (P231,802.10) and 431305201
(P111,252.70)[.] To forestall disconnection of her electric service,
plaintiff-appellee entered and signed Installments Payment Agreement
(IPA) with defendant-appellant on February 27, 2001 xxx.

x x x In the abovestated IPA’s, plaintiff-appellee
agreed to pay the differential billings on installment basis xxx.
Plaintiff-appellee likewise agreed that upon her failure to pay any of
the installment when due and payable, the remaining balance shall be due
and demandable and defendant-appellant shall have the right to
disconnect the particular service covered by the contract. xxx For
failure to pay the August and September 2001 installments, electric
service of the plaintiff-appellee was disconnected on September 27,
2001.

Crystal clear, defendant Meralco was forced to exercise
its right to disconnect plaintiff-appellee’s electric service on
September 27, 2001, not because its electric meters were found tampered
during the inspection conducted in her metering facilities on February
01, 2001, but because plaintiff-appellee failed to pay her August and
September 2001 installments.

x x x During her testimony on October 25, 2001,
plaintiff-appellee admitted that she failed to pay her August and
September 2001 installments xxx.

xxx

x x x Notable also is the fact that there is no pronouncement
that the subject IPA’s executed by plaintiff-appellee and
defendant-appellant which are the basis (sic) in disconnecting
plaintiff’s electric service on September 27, 2001 are null and void
hence, valid and binding contract between the parties. xxx

xxx

x x x Disconnection for non-payment of bills is based on
sound public policy. It would be extremely difficult for a public
utility to collect payment of bills were it denied the right to
disconnect services for non-payment of said bills. A public utility will
be forced to institute a number of actions just to recover small
accounts from numerous customers. xxx

x x x Even though, assuming arguendo, that the unregistered
current was not due to plaintiff-appellee’s deliberate tampering or
interference, her obligation to pay stands. She had simply benefited!
This has been confirmed by plaintiff-appellee’s assumption of Norie
Ann’s, Reynaldo’s, and Leonora’s (all surnamed Restauro) obligations.
Thus, in accordance with the principle embodied under Art. 2142 of the
New Civil Code, ‘no one shall be unjustly enriched or benefited at the
expense of another.’”^[16] (Emphasis supplied; underlining was made in the original)

Prevailing over defendant-appellant MERALCO’s arguments however,
is that defendant-appellant MERALCO failed to comply with the
requirements for the immediate disconnection of electricity, which
requirements are as set forth under Section 4 of Republic Act No. 7832,
otherwise known as “Anti-electricity and Electric Transmission
Lines/Materials Pilferage Act of 1994,” (“R.A. No. 7832” for brevity),
to wit:

“SEC. 4. Prima Facie Evidence. – (a) The presence of any
of the following circumstances shall constitute prima facie evidence of
illegal use of electricity, as defined in this Act, by the person
benefited thereby, and shall be the basis for: (1) the immediate
disconnection by the electric utility to such person after due notice,
(2) the holding of preliminary investigation by the prosecutor and the
subsequent filing in court of the pertinent information, and (3) the
lifting of any temporary restraining order or injunction which may have
been issued against a private electric utility or rural electric
cooperative:

xxx

(iv) The presence of a tampered, broken, or fake seal on
the meter, or mutilated, altered, or tampered meter recording chart or
graph, or computerized chart, graph, or log;

xxx

(viii) xxx Provided, however, That the discovery of any
of the foregoing circumstances, in order to constitute prima facie
evidence, must be personally witnessed and attested to by an officer of
the law or a duly authorized representative of the Energy Regulatory
Board (ERB).” (Emphasis supplied)

Here, the discovery by defendant-appellant MERALCO thru its
service inspection team, of plaintiff-appellee’s illegal use of
electricity was not personally witnessed and attested to by an officer
of the law or by a duly authorized representative of the Energy
Regulatory Board (“ERB” for brevity). Records revealed that SPO1 V.S.
Reyes, who was present during the inspection by defendant-appellant
MERALCO’s inspectors of plaintiff-appellee’s electric meters, was a
police officer assigned at the Western Police District and not at
Guadalupe, Nuevo, Makati City, where the service inspection was
conducted. SPO1 V.S. Reyes even failed to present any written order from
his police station allowing him to escort defendant-appellant MERALCO’s
inspectors in conducting their inspection of plaintiff-appellee’s
premises.

All of these matters were as also found by the lower court, to wit:

“Under the above provision, the prima facie
presumption that will authorize immediate disconnection will arise only
upon the satisfaction of certain requisites. One of these requisites is
the personal witnessing and attestation by an officer of the law or by
an authorized ERB representative when the discovery was made xxx.

Here, one SPO1 V.S. Reyes allegedly witnessed and
attested to the conduct of the service inspection on February 1, 2001
xxx. However, there was irregularity in the conduct of operation by the
defendant’s inspection team. The service inspection was conducted in
Guadalupe, Nuevo, Makati City, whereas SPO1 Reyes is a police officer
assigned at the Western Police District. There is also no evidence
presented that SPO1 Reyes is allowed to escort the Meralco inspection
team in Guadalupe, Nuevo, Makati City. Police officers must act only
within their assigned territory xxx. Moreover, SPO1 Reyes was never
presented to testify.”^[17] (Emphasis supplied)

The immediate disconnection of electric service is unjustified if
no showing was made – as was the situation here – that an officer of the
law acted within his assigned territory,^[18]
or, that a duly authorized representative of the ERB had personally
witnessed and attested to the discovery of the illegal use of
electricity. That this is so, is pursuant to the following pronouncement
of the Supreme Court in Manila Electric Company v. Atty. Pablito Castillo, G.R. No. 182976, January 14, 2013:

“Thus, in order for the discovery of a tampered, broken
or fake seal on the meter to constitute prima facie evidence of illegal
use of electricity by the person who benefits from such illegal use, the
discovery thereof must have been personally witnessed and attested to
by an officer of the law or a duly authorized representative of the ERB.

Citing Quisumbing v. Manila Electric Company, we reiterated the
significance of this requirement in Manila Electric Company (MERALCO) v.
Chua, thus:

The presence of government agents who may authorize immediate
disconnections go into the essence of due process. Indeed, we cannot
allow respondent to act virtually as prosecutor and judge in imposing
the penalty of disconnection due to alleged meter tampering. That would
not sit well in a democratic country. After all, Meralco is a monopoly
that derives its power from the government. Clothing it with unilateral
authority to disconnect would be equivalent to giving it a license to
tyrannize its hapless customers.

xxx

Absent any showing that an officer of the law or a duly
authorized representative of the ERB personally witnessed and attested
to the discovery of Permanent Light’s tampered electric meter, such
discovery did not constitute prima facie evidence of illegal use of
electricity that justifies immediate disconnection of electric service.” (Emphasis supplied)

Defendant-appellant MERALCO could not also properly justify the
disconnection of plaintiff-appellee’s electric service on ground that
plaintiff-appellee failed, as alleged by defendant-appellant MERALCO, to
pay the differential billings pursuant to the Installment Payment
Agreement (IPA) that was executed between plaintiff-appellee and
defendant-appellant MERALCO. The reason is that defendant-appellant
MERALCO failed to send a written notice or warning to plaintiff-appellee
before effecting the disconnection. Such written notice or warning
before any disconnection, is required under Section 48 of ERB Resolution
No. 95-21, as follows:

“SEC. 48. Refusal or Discontinuance of Service. – An
electric utility shall not refuse or discontinue service to an
applicant, or customer, who is not in arrears to the electric utility,
even though there are unpaid charges due from the premises occupied by
the applicant, or customer, on account of unpaid bill of a prior tenant,
unless there is evidence of conspiracy between them to defraud the
electric utility.

Service may be discontinued for the nonpayment of bills
as provided for in Section 43 hereof, provided that a forty eight
(48)-hour written notice of such disconnection has been given the
customer; Provided, however, that disconnections of service
shall not be made on Fridays, Saturdays, Sundays and official holidays;
Provided, further, that if at the moment of the disconnection is to be
made the customer tenders payment of the unpaid bill to the agent or
employee of the electric utility who is to effect the disconnection, the
said agent, or employee shall be obliged to accept tendered payment and
issue a temporary receipt for the amount and shall desist from
disconnecting the service.

The electric utility may discontinue service in case the
customer is in arrear(s) in the payment of bill(s). Any such suspension
of service shall not terminate the contract between the electric utility
and the customer.

In the case of arrear(s) in the payment of bill(s), the electric
utility may discontinue the service notwithstanding the existence of
the customer’s deposit with the electric utility which will serve as
guarantee for the payment of future bill(s) after service is
reconnected.” (Emphasis supplied)

Considering that defendant-appellant’s disconnection of
plaintiff-appellee’s electric service was without basis, and that no
notice of disconnection was sent to plaintiff-appellee, then, contrary
to defendant-appellant’s arguments in its assigned error II, the lower
court properly awarded Moral and Exemplary Damages and Attorney’s Fees
in favor of plaintiff-appellee. That this is the consequence is pursuant
to the following pronouncement of the Supreme Court in Manila Electric Company v. Atty. Pablito Castillo, G.R. No. 182976, January 14, 2013:

“Moral damages are awarded to compensate the claimant for
physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation and
similar injury. Jurisprudence has established the following requisites
for the award of moral damages: (1) there is an injury whether physical,
mental or psychological, which was clearly sustained by the claimant;
(2) there is a culpable act or omission factually established; (3) the
wrongful act or omission of the defendant is the proximate cause of the
injury sustained by the claimant; and (4) the award of damages is
predicated on any of the cases stated in Article 2219 of the Civil Code.

Pertinent to the case at hand, Article 32 of the Civil
Code provides for the award of moral damages in cases where the rights
of individuals, including the right against deprivation of property
without due process of law, are violated. In Quisumbing v. Manila
Electric Company, this Court treated the immediate disconnection of
electricity without notice as a form of deprivation of property without
due process of law, which entitles the subscriber aggrieved to moral
damages. We stressed:

More seriously, the action of the defendant in maliciously
disconnecting the electric service constitutes a breach of public
policy. For public utilities, broad as their powers are, have a clear
duty to see to it that they do not violate nor transgress the rights of
the consumers. Any act on their part that militates against the ordinary
norms of justice and fair play is considered an infraction that gives
rise to an action for damages. Such is the case at bar.

xxx

In addition to moral damages, exemplary damages are
imposed by way of example or correction for the public good. In this
case, to serve as an example – that before disconnection of electric
supply can be effected by a public utility, the requisites of law must
be complied with – we sustain the award of exemplary damages to
respondents.” (Emphasis supplied)

Indeed, the findings of the lower court are entitled to great
weight and respect on appeal, and are in fact accorded finality when
supported by sufficient evidence on the record,^[19]
as in this case. The lower court’s conclusions and findings of fact
should not be disturbed unless for strong and cogent reasons because it
is in a better position to examine real evidence, as well as observe the
demeanor of the witnesses during trial.^[20]

After careful consideration of all the facts, arguments, and
issues appearing on the records as well as of the pertinent laws and
jurisprudence, and, in accordance with what is best determined to be
proper under the circumstances, the following disposition is therefore
made on these matters.

GIVEN ALL THESE, the Appeal is DENIED. The Decision of the lower court is AFFIRMED.

SO ORDERED.

Dicdican (Chairperson) and Dimagiba,^[*] JJ., concur.

^[1] Rollo, pp. 64-92.

^[2] Rollo, pp. 93-97.

^[3] Records, pp. 1-6.

^[4] Records, p. 501

^[5] Rollo, pp. 98-109.

^[6] Rollo, pp. 93-97.

^[7] Rollo, pp. 93-94.

^[8] Rollo, pp. 93-97..

^[9] Rollo, p. 97.

^[10] Rollo, pp. 98-109.

^[11] Records, p. 501.

^[12] Rollo, pp. 64-92.

^[13] Rollo, pp. 89-90.

^[14] Rollo, p. 79.

^[15] Paz Reyes Aguam vs. Court of Appeals, et. al., G.R. No. 137672, May 31, 2000.

^[16] Rollo, pp. 80-86.

^[17] Rollo, p. 96.

^[18] Manila Electric Company v. Santiago, G.R. No. 170482, September 4, 2009.

^[19] Spouses Patricio and Myrna Bernales vs. Heirs of Julian Sambaan, et al., G.R. No. 163271, January 15, 2010.

^[20] Spouses Patricio vs. Heirs of Sambaan, G.R. No. 163271, January 15, 2010.