KPascual. Ateneo Law. 2C.

Civil Procedure

MERALCO & YAMBAO V. CA AND CHAVES (1988) CHARACTERS: MERALCO petitioner, electricity provider of CHAVES FAMILY YAMBAO petitioner, MERALCOs bill collector CHAVES FAMILY private respondents, composed of: Isaac Chaves (husband) and Juana O. Chaves (wife), together with their childrenIsaac O. Chaves, Jr. and Rosendo O. Chaves. They are a family of lawyers. EMERGENCY DIGEST FACTS: To recover the damages due to embarrassment, humiliation, hurt pride, and wounded feelings inflicted by MERALCO & YAMBAO during the disconnection of the CHAVES FAMILYs electrical service; the CHAVES FAMILY filed a complaint at CFI-Manila. The court ordered MERALCO & YAMBAO to pay 10,000 pesos to the CHAVES FAMILY as payment for damages. Hence, MERALCO & YAMBAO filed an appeal in the CA, but the CA denied the petition. It was found that the CHAVES FAMILY is a customer of MERALCO. The CHAVES FAMILYs claims that MERALCO did not provide any notice before the disconnection. CHAVEZ FAMILY contends that it must be compulsory to issue a disconnection notice. MERALCO & YAMBAO say that they have the right to disconnect the electric service of the delinquent customer, because the CHAVES FAMILY failed to pay certain bills (bills in arrears). ISSUE: WON, in the absence of bad faith in disconnecting the service to CHAVES family, MERALCO & YAMBAO could be held liable for damages? YES, MERALCO & YAMBAO CAN BE HELD LIABLE. HELD: There is no abuse of discretion in the part of the CA in affirming the assailed decision of the CFI Manila. The right to disconnect the electric service of a delinquent customer shall be accompanied by a given notice 48 hours in advanced as provided for in Section 97 of the Revised Order No. 1 of the Public Service Commission. In accordance with the previous rulings, failure to give such prior notice amounts to a tort. And since, MERALCO & YAMBAO in this particular case disregarded the rule on 48-hour notice prior to disconnection which is protected by law, MERALCO & YAMBAO is liable for damages according to Article 1170 of the civil code, therefore, the CHAVES FAMILY is entitled to claim damages. COMPLETE DIGEST

FACTS: CHAVES FAMILY filed a complaint for damages for embarassment, humiliation, wounded feelings and hurt pride, by reason of the disconnection of their electrical service. The present Petition is for Certiorari by MERALCO & YAMBAO seeking to challenge the decision of the CA which affirmed CFIManilas decision ordering MERALCO & YAMBAO to pay moral damages, exemplary damages and attorneys fees and dismissing MERALCO & YAMBAOs counterclaim. 1. 2. 3. 4. 5. 6. Isaac Chaves (husband) became a customer of MERALCO in the year 1953. March 1965: YAMBAO went to the residence of CHAVES FAMILY and presented two overdue bills referring to 2 different billing periods, Jan-Feb Bill for P7.90 and Feb-Mar Bill for P7.20. Juana O. Chaves (wife), however, informed Yambao that these bills would be paid at the MERALCO main office. 02 Apr 1965: Isaac Chaves went to the defendant's main office at San Marcelino, Manila, but paid only 1 bill, leaving the other bill Identified unpaid. 21 Apr 1965: WITHOUT A DISCONNECTION NOTICE, MERALCO caused the electric service in CHAVES FAMILY 's residence to be discontinued and the power line cut off. 22 Apr 1965: Rosendo O. Chaves (1 of the children) went to the MERALCO main office and paid the amount of P7.20 for the other bill previously left unpaid, and the sum of P7.00 for the subsequent bill corresponding to the period from Mar-Apr after his attention was called to the latter account. Rosendo O. Chaves then sought the help of Atty. Lourdy Torres, one of MERALCO's counsel, and, thereafter, the power line was reconnected and electric service restored to the Chaves residence at about 7:00 p.m. of that same day. MERALCO & YAMBAO dispute the finding that there was no notice given to the CHAVES FAMILY. However, since only questions of law may be raised in a petition for certiorari under Rule 45 of the Revised Rules of Court, MERALCO & YAMBAO, 'for the sake of argument and for the purpose of giving focus on the legal issues', do not take issue with such finding. MERALCO & YAMBAOs CONTENTION: that in the absence of bad faith, they could not be held liable for moral and exemplary damages as well as attorney's fees. The failure to give a notice of disconnection to the CHAVES FAMILY might have been a breach of duty or breach of contract, but by itself does not constitute bad faith or fraud; it must be shown that such a failure was motivated by in or done with fraudulent intent. MERALCO & YAMBAO also maintain that THE CHAVES FAMILY were in arrears in the payment of their electricity bills when their electric service

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KPascual. Ateneo Law. 2C. Civil Procedure was disconnected, thus no moral damages may be recovered by them under the 'clean hands' doctrine. ISSUE: WON, in the absence of bad faith in disconnecting the service to CHAVES family, MERALCO & YAMBAO could be held liable for damages? YES, MERALCO CAN BE HELD LIABLE HELD: We find no reversible error in the decision appealed from. Accordingly, we find no grave abuse of discretion committed by the CA in affirming the trial court's decision. The petition is hereby DISMISSED for lack of merit. RATIO: 1. QUOTED IN THE CA DECISION: MERALCO's right to disconnect the electric service of a delinquent customer "is an absolute one, subject only to the requirement that MERALCO should give the customer a written notice of disconnection 48 hours in advance." This requirement is embodied in Section 97 of the Revised Order No. 1 of the Public Service Commission:
Section 97. Payment of bills. A public service, may require that bills for service be paid within a specified time after rendition. When the billing period covers a month or more, the minimum time allowed will be ten days and upon expiration of the specified time, service may be discontinued for the nonpayment of bills, provided that a 48 hours' written notice of such disconnection has been given the customer: Provided, however, that disconnections of service shall not be made on Sundays and official holidays and never after 2 p.m. of any working day: Provided, further, that if at the moment the disconnection is to be made the customer tenders payment of the unpaid bill to the agent or employee of the operator who is to effect the disconnection, the said agent or employee shall be obliged to accept tender of payment and issue a temporary receipt for the amount and shall desist from disconnecting the service.

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One can not deny the vital role which a public utility such as MERALCO, having a monopoly of the supply of electrical power in Metro Manila and some nearby municipalities, plays in the life of people living in such areas. Electricity has become a necessity to most people in these areas justifying the exercise by the State of its regulatory power over the business of supplying electrical service to the public, in which petitioner MERALCO is engaged. Thus, the state may regulate, as it has done through Section 97 of the Revised Order No. 1 of the Public Service Commission, the conditions under which and the manner by which a public utility such as MERALCO may effect a disconnection of service to a delinquent customer. Among others, a prior written notice to the customer is required before disconnection of the service. Failure to give such prior notice amounts to a tort, as held by us in a similar case, where we said:
... petitioner's act in 'disconnecting Ongsip's gas service without prior notice constitutes breach of contract amounting to an independent tort. The prematurity of the action is indicative of an intent to cause additional mental and moral suffering to private respondent. This is a clear violation of Article 21 of the Civil Code which provides that any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for damages. This is reiterated by paragraph 10 of Article 2219 of the Code. Moreover, the award of moral damages is sanctioned by Article 2220 which provides that wilfull injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith.

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The CA stressed the importance and necessity of the 48-hour advance written notification before a disconnection of service may be effected. Said the court:
... It sets in motion the disconnection of an electrical service of the customer by giving the notice, determining the expiration date thereof, and executing the disconnection. It, therefore, behooves the defendant MERALCO that before it disconnects a customer's electrical service, there should be sufficient evidence that the requirements for the disconnection had been duly complied with, otherwise, the poor consumer can be subjected to the whims and caprices of the defendant, by the mere pretension that the written notice had been duly served upon the customer.

Likewise, we find no merit in MERALCO & YAMBAO's contention that being in arrears in the payment of their bills, THE CHAVES FAMILY is not entitled to moral damages under the doctrine that "he who comes to court in demand of equity, must come with clean hands." This cannot be utilized by MERALCO & YAMBAO to defeat or null the claim for damages. At most, this circumstance can be considered as a mitigating factor in ascertaining the amount of damages to which respondent ... is entitled."