Republic of the
Supreme Court
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MANILA ELECTRIC
COMPANY, |
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G.R. No. 158911 |
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Petitioner, |
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Present: |
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versus - |
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YNARES-SANTIAGO, J., |
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Chairperson, |
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AUSTRIA-MARTINEZ, |
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MATILDE MACABAGDAL
RAMOY, |
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CHICO-NAZARIO, |
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BIENVENIDO RAMOY,
ROMANA |
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NACHURA, and |
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RAMOY-RAMOS,
ROSEMARIE |
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REYES, JJ. |
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RAMOY, OFELIA
DURIAN and |
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Promulgated: |
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Respondents. |
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March 4, 2008 |
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D E C I S I O N
AUSTRIA-MARTINEZ, J.:
This resolves the Petition for Review on Certiorari
under Rule 45 of the Rules of Court, praying that the Decision[1] of the
Court of Appeals (CA) dated December 16, 2002, ordering petitioner Manila
Electric Company (MERALCO) to pay Leoncio Ramoy[2] moral
and exemplary damages and attorney's fees, and the CA Resolution[3] dated
July 1, 2003, denying petitioner's motion for reconsideration, be reversed and
set aside.
The Regional Trial Court (RTC) of
The evidence on record has
established that in the year 1987 the National Power Corporation (NPC) filed
with the MTC Quezon City a case for ejectment against several persons allegedly illegally
occupying its properties in Baesa,
On
In
a letter dated August 17, 1990 Meralco requested NPC
for a joint survey to determine all the establishments which are considered
under NPC property in view of the fact that “the houses in the area are very
close to each other” (Exh. 12). Shortly thereafter, a joint survey was
conducted and the NPC personnel pointed out the electric meters to be
disconnected (Exh. 13; TSN, October 8, 1993, p. 7;
TSN, July 1994, p. 8).
In
due time, the electric service connection of the plaintiffs [herein
respondents] was disconnected (Exhibits D to G, with submarkings,
pp. 86-87, Record).
Plaintiff
Leoncio Ramoy testified
that he and his wife are the registered owners of a parcel of land covered by
TCT No. 326346, a portion of which was occupied by plaintiffs Rosemarie Ramoy, Ofelia Durian, Jose Valiza
and Cyrene S. Panado as
lessees. When the Meralco
employees were disconnecting plaintiffs' power connection, plaintiff Leoncio Ramoy objected by
informing the Meralco foreman that his property was
outside the NPC property and pointing out the monuments showing the boundaries
of his property. However, he was
threatened and told not to interfere by the armed men who accompanied the Meralco employees.
After the electric power in Ramoy's apartment
was cut off, the plaintiffs-lessees left the premises.
During
the ocular inspection ordered by the Court and attended by the parties, it was
found out that the residence of plaintiffs-spouses Leoncio
and Matilde Ramoy was
indeed outside the NPC property. This
was confirmed by defendant's witness R.P. Monsale III
on cross-examination (TSN, October 13, 1993, pp. 10 and 11). Monsale also
admitted that he did not inform his supervisor about this fact nor did he
recommend re-connection of plaintiffs' power supply (Ibid., p. 14).
The
record also shows that at the request of NPC, defendant Meralco
re-connected the electric service of four customers previously disconnected
none of whom was any of the plaintiffs (Exh. 14).[4]
The RTC decided in favor of MERALCO
by dismissing herein respondents' claim for moral damages, exemplary damages
and attorney's fees. However, the RTC
ordered MERALCO to restore the electric power supply of respondents.
Respondents then appealed to the
CA. In its Decision dated
Hence, herein petition for review on
certiorari on the following grounds:
I
THE COURT OF APPEALS GRAVELY ERRED WHEN IT FOUND
MERALCO NEGLIGENT WHEN IT DISCONNECTED THE SUBJECT ELECTRIC SERVICE OF RESPONDENTS.
II
THE COURT OF APPEALS GRAVELY ERRED WHEN IT AWARDED
MORAL AND EXEMPLARY DAMAGES AND ATTORNEY'S FEES AGAINST MERALCO UNDER THE
CIRCUMSTANCES THAT THE LATTER ACTED IN GOOD FAITH IN THE DISCONNECTION OF THE
ELECTRIC SERVICES OF THE RESPONDENTS. [5]
The petition is partly meritorious.
MERALCO admits[6] that
respondents are its customers under a Service Contract whereby it is obliged to
supply respondents with electricity.
Nevertheless, upon request of the NPC, MERALCO disconnected its power
supply to respondents on the ground that they were illegally occupying the NPC's right of way.
Under the Service Contract, “[a] customer of electric service must show his
right or proper interest over the property in order that he will be provided
with and assured a continuous electric service.”[7] MERALCO argues
that since there is a Decision of the Metropolitan Trial Court (MTC) of
Clearly, respondents' cause of
action against MERALCO is anchored on culpa contractual or breach of
contract for the latter's discontinuance of its service to respondents under Article 1170 of the Civil Code which provides:
Article
1170. Those who in the performance of their obligations are guilty of fraud,
negligence, or delay, and those who in any manner contravene the tenor thereof,
are liable for damages.
In Radio Communications of the Philippines, Inc. v. Verchez,[8] the Court expounded on the nature of culpa
contractual, thus:
“In culpa contractual x x x
the
mere proof of the existence of the contract and the failure of its compliance
justify, prima facie, a corresponding right of relief. The law, recognizing the obligatory force of
contracts, will not permit a party to be set free from liability for any kind
of misperformance of the contractual undertaking or a
contravention of the tenor thereof. A
breach upon the contract confers upon the injured party a valid cause for
recovering that which may have been lost or suffered. The remedy serves to preserve the interests of the
promissee that may include his “expectation interest,” which is his interest
in having the benefit of his bargain by being put in as good a position as he
would have been in had the contract been performed, or his “reliance interest,” which is his interest
in being reimbursed for loss caused by reliance on the contract by being put in
as good a position as he would have been in had the contract not been made; or
his “restitution interest,” which is his interest in having restored to him any
benefit that he has conferred on the other party. Indeed, agreements can accomplish little, either for
their makers or for society, unless they are made the basis for action. The effect of every infraction is to create a
new duty, that is, to make recompense to the one who has been injured by the
failure of another to observe his contractual obligation unless he can show
extenuating circumstances, like proof of his exercise
of due diligence x x x
or of the attendance of
fortuitous event, to excuse him from his
ensuing liability.[9] (Emphasis
supplied)
Article
1173 also provides that the fault or negligence of the obligor consists in the
omission of that diligence which is required by the nature of the obligation
and corresponds with the circumstances of the persons, of the time and of the
place. The Court emphasized in Ridjo Tape
& Chemical Corporation v. Court of Appeals[10] that “as a public utility, MERALCO has the obligation to
discharge its functions with utmost care and diligence.”[11]
The
Court agrees with the CA that under the factual milieu of the present case, MERALCO failed to
exercise the utmost degree of care and diligence required of it. To repeat, it was not enough for MERALCO to merely rely on the
Decision of the MTC without ascertaining whether it had become final and executory. Verily,
only upon finality of said Decision can it be said with conclusiveness that
respondents have no right or proper interest over the subject property, thus, are not entitled to the
services of MERALCO.
Although
MERALCO insists that the MTC Decision is final and executory,
it never showed any documentary evidence to support this allegation. Moreover, if it were true that the decision was
final and executory, the most prudent thing for
MERALCO to have done was to coordinate with the proper court officials in
determining which structures are covered by said court order. Likewise, there is no evidence on record to
show that this was done by MERALCO.
The
utmost care and diligence required of MERALCO necessitates such great degree of
prudence on its part, and failure to exercise the diligence required means
that MERALCO was at fault and negligent in the performance of its
obligation. In Ridjo Tape,[12] the Court explained:
[B]eing a public utility
vested with vital public interest, MERALCO is impressed with certain
obligations towards
its customers and any omission on its part to perform such duties would be
prejudicial to its interest. For in the
final analysis, the bottom line is that those who do not exercise such prudence
in the discharge of their duties shall be made to bear the consequences of such
oversight.[13]
This being so, MERALCO is liable for damages under
Article 1170 of the Civil Code.
The next
question is: Are respondents entitled to moral and exemplary damages and
attorney's fees?
Article
2220 of the Civil Code provides:
Article
2220. Willful 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.
In the present case, MERALCO wilfully
caused injury to Leoncio Ramoy
by withholding from him and
his tenants the supply of electricity to which they were entitled under the
Service Contract. This is contrary to
public policy because, as discussed above, MERALCO, being a vital public utility,
is expected to exercise utmost care and diligence in the performance of its
obligation. It was incumbent upon
MERALCO to do everything within its power to ensure that the improvements built by respondents are within
the NPC’s right of
way before disconnecting their power supply. The
Court emphasized in Samar II Electric Cooperative, Inc. v. Quijano[14] that:
Electricity is a basic
necessity the generation and distribution of which 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. Failure to comply with
these regulations will give rise to the presumption of bad faith or abuse of
right.[15] (Emphasis supplied)
Thus, by
analogy, MERALCO's failure to exercise utmost care
and diligence in the performance of
its obligation to Leoncio Ramoy,
its customer, is tantamount to bad faith.
Leoncio Ramoy
testified that he suffered wounded feelings because of MERALCO's
actions.[16] Furthermore, due
to the lack of power
supply, the lessees of his four apartments on subject lot left the premises.[17] Clearly,
therefore, Leoncio Ramoy is
entitled to moral damages in the amount awarded by the CA.
Leoncio Ramoy, the lone witness
for respondents, was the only one who testified regarding the effects on him of
MERALCO's electric service disconnection. His co-respondents Matilde Ramoy, Rosemarie Ramoy, Ofelia Durian and Cyrene Panado did not present any evidence of damages they
suffered.
It is a hornbook principle that damages may be awarded only if
proven. In Mahinay v.
Velasquez, Jr.,[18] the Court held thus:
In order that moral damages may
be awarded, there must be pleading and proof of moral suffering, mental anguish,
fright and the like. While respondent alleged in his complaint that he
suffered mental anguish, serious anxiety, wounded feelings and moral shock, he
failed to prove them during the trial. Indeed, respondent should have taken the witness
stand and should have testified on the mental anguish, serious anxiety, wounded
feelings and other emotional and mental suffering he purportedly suffered to
sustain his claim for moral damages. Mere allegations do not suffice; they must
be substantiated by clear and convincing proof. No other person could
have proven such damages except the respondent himself as they were extremely
personal to him.
In Keirulf vs. Court of Appeals, we held:
“While no proof of
pecuniary loss is necessary in order that moral damages may be awarded, the
amount of indemnity being left to the discretion of the court, it is
nevertheless essential that the claimant should satisfactorily show the
existence of the factual basis of damages and its causal connection to
defendant’s acts. This is so because moral damages, though incapable of
pecuniary estimation, are in the category of an award designed to compensate
the claimant for actual injury suffered and not to impose a penalty on the
wrongdoer. In Francisco vs. GSIS, the
Court held that there must be clear testimony on the anguish and
other forms of mental suffering. Thus, if the plaintiff
fails to take the witness stand and testify as to his/her social humiliation,
wounded feelings and anxiety, moral damages cannot be awarded. In Cocoland Development
Corporation vs. National Labor Relations Commission, the
Court held that “additional facts must be pleaded and proven to warrant the
grant of moral damages under the Civil Code, these being, x x
x social humiliation, wounded feelings, grave
anxiety, etc. that resulted therefrom.”
x x x The award of moral damages must be anchored to a clear
showing that respondent actually experienced mental anguish, besmirched
reputation, sleepless nights, wounded feelings or similar injury. There was no
better witness to this experience than respondent himself. Since respondent
failed to testify on the witness stand, the trial court did not have any
factual basis to award moral damages to him.[19] (Emphasis supplied)
Thus, only respondent Leoncio Ramoy, who testified as to his wounded feelings, may be
awarded moral damages.[20]
With regard to exemplary damages, Article
2232 of the Civil Code provides that in contracts and quasi-contracts, the
court may award exemplary damages if the defendant, in this case MERALCO, acted
in a wanton, fraudulent, reckless, oppressive, or malevolent manner, while
Article 2233 of the same Code provides that such
damages cannot be recovered as a matter of right and the adjudication of the same is within the
discretion of the court.
The Court finds that MERALCO fell short of exercising the due diligence
required, but its actions cannot be considered wanton, fraudulent, reckless,
oppressive or malevolent. Records show
that MERALCO did take some measures, i.e., coordinating with NPC officials and conducting a joint
survey of the subject area, to verify which electric meters should be
disconnected although these measures are not sufficient, considering the degree
of diligence required of it. Thus, in
this case, exemplary damages should not be awarded.
Since
the Court does not deem it proper to award exemplary damages in this case,
then the CA's award for attorney's fees should likewise be deleted, as Article
2208 of the Civil Code states that in the absence of stipulation, attorney's fees cannot be recovered except in cases
provided for in said Article, to wit:
Article
2208. In the absence of stipulation,
attorney’s fees and expenses of litigation, other than judicial costs, cannot
be recovered, except:
(1)
When exemplary damages are awarded;
(2) When the defendant’s act or omission has
compelled the plaintiff to litigate with third persons or to incur expenses to
protect his interest;
(3) In criminal cases of malicious prosecution
against the plaintiff;
(4) In case of a clearly unfounded civil action
or proceeding against the plaintiff;
(5) Where the defendant acted in gross and
evident bad faith in refusing
to satisfy the plaintiff’s plainly valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of
household helpers, laborers and skilled workers;
(8) In actions for indemnity under workmen’s
compensation and employer’s liability laws;
(9) In a separate civil action to recover civil
liability arising from a crime;
(10) When at least double judicial costs are
awarded;
(11) In any other case where the court deems it
just and equitable that attorney’s fees and expenses of litigation should be
recovered.
In all cases, the attorney’s fees
and expenses of litigation must be reasonable.
None of the grounds for
recovery of attorney's fees are present.
WHEREFORE, the petition
is PARTLY GRANTED. The
Decision of the Court of Appeals is AFFIRMED with MODIFICATION. The award for exemplary damages and
attorney's fees is DELETED.
No costs.
SO ORDERED.
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice
WE CONCUR:
CONSUELO
YNARES-SANTIAGO
Associate Justice
Chairperson
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MINITA V. CHICO-NAZARIO Associate Justice |
ANTONIO EDUARDO B. NACHURA Associate Justice |
RUBEN T. REYES
Associate Justice
ATTESTATION
I attest
that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court’s
Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13,
Article VIII of the Constitution, and the Division Chairperson’s Attestation,
it is hereby certified that the conclusions in the above Decision had been
reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
REYNATO S. PUNO
Chief Justice
[1] Penned
by Associate Justice Marina L. Buzon, with Associate
Justices Josefina Guevara-Salonga and Danilo B. Pine, concurring; rollo, pp. 36-49.
[2] Leoncio Ramoy was one of the
original plaintiffs who filed the complaint with the Regional Trial Court of Quezon City.
However, Leoncio Ramoy
died on
[3] Rollo, pp. 51-53.
[4] RTC
Decision dated
[5]
[6] Answer,
rollo, p. 73.
[7] Petition, id. at 26; Memorandum, id.
at 159-160.
[8] G.R.
No. 164349,
[9]
[10] 350 Phil. 184 (1998).
[11]
[12] Ridjo Tape & Chemical Corporation v. Court of
Appeals, supra note 10.
[13]
[14] G.R.
No. 144474,
[15]
[16] TSN,
[17]
[18] 464 Phil. 146 (2004).
[19]
[20] Respondents did not claim actual damages.