Case Digest: MERALCO v. Spouses Chua & Paqueo

G.R. No. 160422 : July 5, 2010




FromJune 11, 1996 to September 11, 1996, the Chuas consumed between 231 to 269 kilowatt hours of electricity per month, with their corresponding monthly electric bills ranging from P747.84 to P887.27. In October 1996, the Chuas were surprised to receive an electricity bill for the amount ofP4,906.87 for the period of September 11 to October 11, 1996(September 1996 bill). Alarmed by the significant increase, Florence Chua (the Chuas daughter) went to the MERALCO office to question the bill.

MERALCO responded to the Chuas complaint by sending a representative, Francisco Jose Albano, to their residence to inspect the electric meter. Albano filed a Meter/Socket Inspection Report stating that he replaced the old meter and installed a new one becausethe old meters terminal seal was missing, the cover seal was broken, and the meter had a broken sealing wire.

OnJanuary 3, 1997, the Chuas received a letter from MERALCO, stating that they are billed the amount of P183,983.66 (rate charge of P179,353.26 and energy tax ofP4,630.40) with Surcharges as a penalty for all Violation of Contract cases apprehended effective January 17, 1995, which would be collected later. The Chuas refused to pay as demanded.OnJanuary 24, 1997, MERALCO returned to their residence and removed Meter No. 33RZN80082, thereby disconnecting their electric supply.

The Chuas filed a complaint for mandamus and damages,praying that they be granted a preliminary mandatory injunction to compel MERALCO to restore the electrical connection to their residence. The Chuas also asked the court to award them moral and exemplary damages, attorneys fees, and litigation expenses.

After trial, the RTC rendered its decision in favor of the plaintiffs and against the defendant. MERALCO appealed the trial courts decision to the CA. The CA affirmed the RTC decision.

ISSUE: Whether or not MERALCO had the right to disconnect the electric service of the Chuas and collect the differential billing?

HELD: Court of Appeals decision is sustained.

CONSTITUTIONAL LAW: public utilities; police power

To reiterate, the discovery of a tampered, broken, or fake seal on the meter shall only constitute prima facie evidence of illegal use of electricity by the person who benefits from the illegal use if such discovery is personally witnessed and attested to byan officer of the lawor a duly authorized representative of the Energy Regulatory Board(ERB). With such prima facie evidence, MERALCO is within its rights to immediately disconnect the electric service of the consumer after due notice.

Section 1, Rule III of the Rules and Regulations Implementing RA 7832 (IRR) defines an officer of the law as one who, by direct supervision of law or by election or by appointment by competent authority, is charged with the maintenance of public order and the protection and security of life and property, such as barangay captain, barangay chairman, barangay councilman, barangay leader, officer or member of Barangay Community Brigades, barangay policeman, PNP policeman, municipal councilor, municipal mayor and provincial fiscal.

Rule III, Section 1 of the IRR provides: In order to constitute prima facie evidence, the discovery of any of the circumstances enumerated in Section 1 hereof, must be personally witnessed and attested toby the consumer concernedor a duly authorized ERB representative or any officer of the law, as the case may be.

We hold the view, however, that the inclusion of the phrase by the consumer concerned in the IRR is invalid because it is in excess of what the law being implemented provides.As RA 7832 stands, only the presence of an authorized government agent, either an officer of the law or an authorized representative of the ERB, during the MERALCO inspection wouldallow any of the circumstances enumerated in Section 4 of RA 7832 to be consideredprima facieevidence of illegal use of electricity by the benefited party. The law does not include the consumer or the consumers representative in this enumeration.

In legal contemplation, the ERBs inclusion of the phrase by the consumer concerned in Rule III, Section 1 of the IRR expanded the clear wording of the law and violated the recognized principle that an administrative agency's rule-making power is confined to filling in the gaps and the necessary details in carrying into effect the law as enacted; rule-making cannot extend, amend, or expand statutory requirements or embrace matters not covered by the law being implemented. Administrative regulations must always be in harmony with the provisions of the law because any resulting discrepancy between the two will always be resolved in favor of the basic law. In the present case, the consumer cannot in any way be considered to be in the same classification as the named government representatives so that his or her presence can be a substitute for the presence of these representatives.

In other words, MERALCO is authorized to immediately disconnect the electric service of its consumers without the need of a court or administrative order when: (a) the consumer, or someone acting in his behalf, is caught in flagrante delicto in any of the acts enumerated in Section 4 of RA 7832; or (b) when any of the circumstances constituting prima facie evidence of illegal use of electricity is discovered for the second time.

In flagrante delicto means [i]n the very act of committing the crime. To be caught in flagrante delicto, therefore, necessarily implies positive identification by an eyewitness or eyewitnesses to the act of tampering so that there is direct evidence of culpability, or that which proves the fact in dispute without the aid of any inference or presumption.

We have fully discussed above why MERALCO was not in the position under RA 7832 to immediately disconnect the Chuas electric service. We add that while electricity is property whose enjoyment, as a general rule, the owner may extend or deny to others, electricity is not an ordinary kind of property that a service provider may grant or withhold to consumers at will. Electricity is a basic necessity whose generation and distribution is imbued with public interest, and its provider is a public utility subject to strict regulation by the State in the exercise of police power. In view of the serious consequences resulting from immediate disconnection of electric service,the law provides strict requisites that MERALCO must follow before it can be granted authority to undertake instant disconnection of electric service due to its consumers. In view of MERALCO's dominance over its market and its customers and the latter's relatively weak bargaining position as against MERALCO, and in view too of the serious consequences and hardships a customer stands to suffer upon service disconnection, MERALCO's failure to strictly observe these legal requirements can be equated to the bad faith or abuse of right that the law speaks of.

Under the circumstances, we cannot but conclude that MERALCO abused its superior and dominant position as well as the authority granted to it by law as a service provider when it persisted in disconnecting the Chuas electric service. Hence, the general prohibition against the issuance of a restraining order or an injunction under Section 9 of RA 7832 cannot apply. Rather, what must prevail is the exception: an injunction can issue when a disconnection has been attended by bad faith or grave abuse of authority.