GR L 34298; (February, 1985) (Digest)
G.R. No. L-34298 February 28, 1985
ALGER ELECTRIC, INC., petitioner, vs. COURT OF APPEALS and NORTHERN CEMENT CORPORATION, respondents.
FACTS
Petitioner Alger Electric, Inc., holder of a legislative franchise under Republic Act No. 3826 to operate an electric power system in specified municipalities, sought to annul a contract executed between respondent Northern Cement Corporation and the National Power Corporation (NPC) for the direct supply of power to Northern’s plant in Sison, Pangasinan. Alger filed a “Petition for Prohibition with Preliminary Injunction” in the Court of First Instance of Manila, alleging the contract violated Section 2 of its franchise, which required NPC to distribute power within Alger’s franchise area only through Alger or with its consent. The trial court denied the preliminary injunction. Northern moved to dismiss, arguing lack of jurisdiction as the act sought to be enjoined was outside Manila, and that the franchise provision was unconstitutional. Alger then moved to amend its complaint to re-label it as an ordinary civil action for annulment of contract and damages. The trial court admitted the amended complaint.
ISSUE
Whether the trial court correctly admitted the amended complaint and properly assumed jurisdiction over the case.
RULING
Yes, the trial court correctly admitted the amended complaint. The nature of an action is determined by the facts alleged in the complaint, not its title. The original pleading, though denominated as a special civil action for prohibition, essentially alleged a cause of action for the annulment of a contract and sought ancillary injunctive relief. Since the primary relief sought was the declaration of nullity of the contract, it constituted an ordinary civil action over which the Court of First Instance of Manila had jurisdiction. An amendment that merely clarifies the nature of the action and does not confer jurisdiction where none existed is permissible. The court’s jurisdiction was properly invoked from the inception of the case based on the substance of the allegations. However, on the substantive merits, the Supreme Court ultimately ruled against Alger, holding that its franchise was not exclusive in a manner that prohibited NPC from directly supplying a bulk industrial consumer like Northern, as such exclusivity is not favored and must be expressly granted, and public interest favors direct supply to power-intensive industries to ensure lower costs.