GR L 59480; (December, 1982) (Digest)
G.R. No. L-59480 December 8, 1982
U. BAÑEZ ELECTRIC LIGHT COMPANY (UBELCO), plaintiff-appellant, vs. ABRA ELECTRIC COOPERATIVE, INC. (ABRECO) AND/OR JEREMIAS ZAPATA, NATIONAL POWER CORP. (NPC) AND NATIONAL ELECTRIFICATION ADMINISTRATION (NEA), defendants-appellees.
FACTS
UBELCO, holder of a Congressional franchise under Republic Act No. 4143 , filed a complaint alleging that the National Power Corporation (NPC) unlawfully refused to enter into a power service contract with it for the Municipality of Bangued, Abra. It further alleged that the Abra Electric Cooperative (ABRECO), with encouragement from the National Electrification Administration (NEA), was illegally establishing an electric system in Bangued by drawing power directly from NPC without negotiating with or obtaining UBELCO’s consent, in violation of the franchise condition requiring such negotiation.
The defendants moved to dismiss the complaint for failure to state a cause of action. The trial court granted the motion and dismissed the complaint. UBELCO appealed, arguing the lower court disregarded allegations deemed admitted by the motion to dismiss.
ISSUE
Whether the complaint sufficiently states a cause of action against the defendants.
RULING
No, the complaint fails to state a cause of action. A motion to dismiss hypothetically admits only the material facts alleged, not conclusions of law. The court may consider relevant laws within judicial notice. UBELCO’s 1964 franchise required NPC to negotiate with it before supplying power in its area.
However, subsequent laws—the NEA Charter ( Republic Act No. 6038 ) and the amended NPC Charter ( Republic Act No. 6395 )—mandated that NPC give preference to electric cooperatives like ABRECO in the sale of power and provide them maximum support. These later statutes modified pro tanto the earlier franchise provision, as franchises are subject to amendment for public interest. Therefore, NPC could directly supply ABRECO as mandated by law, without needing UBELCO’s consent. Since the principal reliefs of restraining NPC from contracting with ABRECO and compelling a contract with UBELCO could not be granted based on the established facts and applicable law, the dismissal was proper.