GR 207429; (November, 2020) (Digest)
G.R. No. 207429 , November 18, 2020
Manila Electric Company (MERALCO), Petitioner, vs. AAA Cryogenics Philippines, Inc., Respondent.
FACTS
Respondent AAA Cryogenics Philippines, Inc. (AAA), a producer of liquid gases, required a stable power supply for its sensitive plant equipment. Between October 1997 and April 1998, AAA experienced numerous power fluctuations and interruptions, as recorded in its computer log sheets, which caused its plant to shut down, leading to production losses. AAA informed petitioner Manila Electric Company (Meralco) of these issues, but Meralco allegedly failed to rectify the situation, only advising AAA to install a motor generator set. Consequently, AAA ceased paying its electric bills, accruing a substantial unpaid balance. Meralco eventually disconnected service.
AAA filed an action for injunction and damages against Meralco, claiming actual damages for production losses amounting to P21,092,760.00. Meralco, in turn, filed a collection case for the unpaid bills. The cases were consolidated. The Regional Trial Court (RTC) ruled in favor of both parties on their respective claims, ordering Meralco to pay AAA’s damages and AAA to pay its unpaid bills, with the amounts to be offset.
ISSUE
Whether the Court of Appeals erred in affirming the RTC’s finding that Meralco is liable for breach of contract and for the actual damages claimed by AAA.
RULING
The Supreme Court denied Meralco’s petition and affirmed the lower courts’ decisions. The core legal logic rests on the contractual obligation and the sufficiency of evidence. Under the Agreement for the Sale of Electric Energy, Meralco was bound to supply energy “at reasonably constant potential and frequency.” The Court found that AAA successfully proved, through preponderance of evidence, that Meralco breached this obligation. AAA presented detailed computer log sheets and the credible testimony of its plant supervisor, which directly linked the recorded drops in gas purity to power disturbances. This evidence was corroborated by Meralco’s own expert witness, who affirmed the accuracy of AAA’s monitoring system.
Conversely, Meralco failed to substantiate its defense that the fluctuations were normal and unavoidable. Its Daily Interruption Reports, showing only two recorded interruptions, were deemed insufficient to refute AAA’s specific and detailed evidence, especially as Meralco admitted it did not monitor fluctuations. The Court upheld the award of actual damages, as the amount was sufficiently established by AAA’s documentary evidence detailing production losses. The finding of breach of contract was primarily factual, and the Supreme Court found no reason to deviate from the consistent factual conclusions of the RTC and the Court of Appeals, which are accorded finality in a Rule 45 petition.