GR 126074; (February, 1998) (Digest)
G.R. No. 126074 February 24, 1998
RIDJO TAPE & CHEMICAL CORP. and RIDJO PAPER CORPORATION, petitioners, vs. HON. COURT OF APPEALS, MANILA ELECTRIC CO., HON. PRESIDING JUDGE, Branch 104-REGIONAL TRIAL COURT OF QUEZON CITY, respondents.
FACTS
Petitioners Ridjo Tape & Chemical Corp. and Ridjo Paper Corporation were granted electric service by respondent Manila Electric Co. (MERALCO) on November 16, 1990. MERALCO later demanded payment from petitioners for unregistered electric consumption allegedly due to a defective electric meter: P415,317.66 for the period November 7, 1990 to February 13, 1991, and P89,710.58 for the period July 15, 1991 to April 13, 1992. Petitioners refused to pay and filed two cases in the Regional Trial Court (RTC) of Quezon City to enjoin MERALCO from disconnecting their electric service, which were consolidated. The RTC ruled in favor of petitioners, making the injunction permanent and ordering MERALCO to pay costs. The Court of Appeals reversed the RTC decision and ordered petitioners to pay the differential billings. Petitioners filed this petition for review.
ISSUE
Whether petitioners are liable to pay MERALCO for unregistered electrical consumption despite the absence of evidence of tampering, considering the terms of their Service Agreement and MERALCO’s conduct.
RULING
The Supreme Court modified the decision of the Court of Appeals. It upheld the validity of the stipulation in the Service Agreement allowing MERALCO to bill for estimated consumption in case of meter stoppage or failure, as the contract, though one of adhesion, was binding and not contrary to law. However, the Court found MERALCO negligent. As a public utility, MERALCO had a duty to make reasonable inspections and timely repairs of its equipment. Its failure to discover and remedy the meter defects over considerable periods (approximately three months and nine months) constituted inexcusable negligence, making it bear the consequences. An equitable solution was adopted: petitioners were ordered to pay MERALCO the amount of P168,342.75, representing the average electric consumption based on a three-month average prior to the periods in controversy, to prevent unjust enrichment without penalizing MERALCO’s negligence.