REPUBLIC OF THE PHILIPPINES

SUPREME COURT
Manila

SECOND DIVISION

NOTICE
Sirs/Mesdames:

Please take notice that the Court, Second Division, issued a Resolution
dated 01 March 2021 which reads as follows:

"G.R. No. 236877 (Manila Electric Company {MERALCOJ and

Buenaventura S. Floreza v. Engr. Delfin A. Villafuerte, Jr.). -

As a rule, only questions of law are entertained by the Court in

petitions for review on certiorari under Rule 45. By way of exception
though, a review of the factual findings is in order when the factual
findings of the Court of Appeals are contrary to those of the trial court, 1
as in this case. Consequently, the Court here is constrained to make its
own factual findings based on the cold records of the case for the purpose
of resolving the issues raised by the parties.

MERALCO must comply with

the requirements of Republic
Act No. 7832 (RA 7832) prior to
disconnection

Illegal use of electricity is a valid cause for disconnection of electric

service subject to compliance with Sections 4 and 6 of RA 7832, viz.:

SECTION 4. Prima Facie Evidence. - (a) The presence of any

of the following circumstances shall constitute prima facie evidence of
illegal use of electricity, as defined in this Act, by the person benefitted

1 See Manila E/ec1ric Co. v. Vela. de Santiago, 614 Phil. 495, 502 (2009).

B(141)URES -more-
 Resolution 2 G.R. No. 236877
March 1-B, 2021

thereby, and shall be the basis for: (1) the immediate disconnection
by the electric utility to such person after due notice, (2) the holding of
a preliminary investigation by the prosecutor and the subsequent filing in
court of the pertinent information, and (3) the lifting of any temporary
restraining order or injunction which may have been issued against a private
electric utility or rural electric cooperative:

(i) The presence of a bored hole on the glass cover of the electric
meter, or at the back or any other part of said meter;

(ii) The presence inside the electric meter of salt, sugar and other
elements that could result in the inaccurate registration of the meter's
internal parts to prevent its accurate registration of consumption of
electricity;

(iii) The existence of any wmng connection which affects the

normal operation or registration of the electric meter;

(iv) The presence of a tampered, broken, or fake seal on the meter,

or mutilated, altered or tampered meter recording chart or graph, or
computerized chart, graph, or log;

(v) The presence in any part of the building or its premises which
is subject to the control of the consumer or on the electric meter, of a
current reversing transformer,jumper, shorting and/or shunting wire, and/or
loop connection or any other similar device;

(vi) The mutilation, alteration, reconnection, disconnection,

bypassing or tampering of instruments, transformers, and accessories;

(vii) The destruction of, or attempt to destroy, any integral

accessory of the metering device box which encases an electric meter, or
its metering accessories; and

(viii) The acceptance of money and/or other valuable consideration

by any officer of employee of the electric utility concerned or the making
of such an offer to any such officer or employee for not reporting the
presence of any of the circumstances enumerated in subparagraphs (i),
(ii), (iii), (iv), (v), (vi), or (vii) hereof: Provided, however, That the
discovery of any of the foregoing circumstances, in order to constitute
prima facie evidence, must be personally witnessed and attested to by
an officer of the law or a duly authorized representative of the Energy
Regulatory Board (ERB).

xxxx

SECTION 6. Disconnection of Electric Service. - The private

electric utility or rural electric cooperative concerned shall have the
right and authority to disconnect immediately the electric service
after serving a written notice or warning to that effect, without the need
of a court or administrative order, and deny restoration of the same,
when the owner of the house or establishment concerned or someone
acting in his behalf shall have been caught en flagrante delicto doing
any of the acts enumerated in Section 4(a) hereof, or when any of
the circumstances so enumerated shall have been discovered for the
second time: Provided, That in the second case, a written notice or warning

B(141)URES -more-
 Resolution 3 G.R. No. 236877
March 1-B, 2021

shall have been issued upon the first discovery: xxx Provided, finally, That
if the court finds the same person guilty of such illegal use of electricity,
he shall, upon final judgment, be made to pay the electric utility or
rural electric cooperative concerned double the value of the estimated
electricity illegally used which is referred to in this section as
differential billing. (Emphases supplied)

In fine, prior to any disconnection of electric services, the electric utility

concerned must strictly comply with the following procedure:

(1) the discovery of illegal use of electricity is personally witnessed and

attested to by an officer of the law or a duly authorized representative
of the Energy Regulatory Board (ERB)2 to create a prima facie
authority to disconnect; 3

(2) the owner of the house or establishment concerned or someone acting

on his behalf:

(a) shall have been caught inflagrante delicto doing any of the
acts enumerated in Section 4(a), or
(b) when any of the circumstances shall have been discovered
for the second time; and,

(3) there was prior notice of disconnection. 4

On the first requisite, both the trial court and Court of Appeals found
that MERALCO had sufficiently established a prima facie authority to
disconnect when, during its ocular inspection of the apartment, it discovered
the prohibited loop connection on the two (2) meters. Police Officer 3
Kenneth Loria (PO3 Loria) testified that he was present during the
inspection and he saw the loop connection with his own eyes. 5

Now whether the violator per second requisite was caught in flagrante
delicto, the trial court and the Court of Appeals both ruled in the affirmative.
They noted that during the ocular inspection, the MERALCO personnel,
PO3 Loria, respondent Engr. Delfin A. Villafuerte, Jr. (Villafuerte) himself,
and his son (occupant of the apartment) were all present. When the loop
connection was discovered and Villafuerte and his son were confronted
with it, neither one, nor the other denied his knowledge of, and his
responsibility for, its existence. All Villafuerte did was to claim, albeit
baselessly, if not untruthfully, that the loop connection was akin to a
parallel load purportedly allowed under the Electrical Code. Surely, this is
a strong evidence of culpability showing that Villafuerte, and no one else,
was the implementor of the illegal loop connection.

Now, Energy Regulatory Commission (ERC).

3 See Quisumbing v. MERAlCO, 429 Phil. 727, 742 (2002).
4
See Section 4, RA 7832.
5
See Judicial Affidavit, record, p. 27 1.

B(141)URES -more-
 Resolution 4 G.R. No. 236877
March 1-B, 2021

We now go to the third requisite, a written notice of disconnection

must have been served on the owner of the house or establishment prior
to any disconnection. 6 On this score, the Court of Appeals correctly ruled
that contrary to the trial comi's finding, only the notice of disconnection
pertaining to Service Identification No. (SIN) 520679001 was served on
Villafuerte, as shown by the Demand Letter/Notice of Disconnection No.
21758-06 dated August 24, 2007 bearing a differential billing in the amount
of P323,83 l .45 corresponding to the period from December 26, 2004 to
August 24, 2007.

Accordingly, the service disconnection on SIN 520679001 was valid

as all the requisites therefor under RA 7832 were duly complied with.

As for SIN 972466301, however, MERALCO improperly

disconnected the electrical service thereon. For there was no evidence that
MERALCO served a similar demand letter/notice of disconnection on
Villafuerte insofar as this electrical meter was concerned. The Court of
Appeals aptly ruled, viz.:

Be that as it may, We note that the Demand Letter/Notice of

Disconnection dated August 24, 2007 adjusting the billings from December
26, 2004 until August 24, 2007 which were affected by the finding of
the existence of a loop connection thereby resulting in the differential
amount of P323,831.45, only involves electric service covered by SIN
520679001 in the name of Domingo, but used by plaintiff-appellant's
son. x x x Consequently, the differential billing of P 122,456.90 on SIN
972466301, registered in plaintiff-appellant's name, is without basis; and
the disconnection effected by Meralco on plaintiff-appellant's electric
service, is also without basis, both acts having been committed with
grave abuse of authority. x x x.7

Verily, as the service disconnection on SIN 972466301 was done

without prior notice, the order to restore electrical services thereon was
proper.

Villafuerte is not entitled to

moral and exemplary damages
and attorney's fees

Parties who do not come to court with clean hands cannot be allowed
to profit from their own wrongdoing. The action (or inaction) of the party
seeking equity must be "free from fault, and he must have done nothing to
lull his adversary into repose, thereby obstructing and preventing vigilance
on the part of the latter. " 8

6 SeeMERALCOv. Castillo, 701 Phil.416,431 (20 13).

7
Rollo, p. 45.
8 Department of Public Works and Highways v. Quiwa, 681 Phil. 485, 489-490 (201 2).

B(141)URES -more-
 Resolution 5 G.R. No. 236877
March 1-B, 2021

It was established that Villafuerte was caught in flagrante delicto of

illegally using electricity. If not for the lack of prior notice, MERALCO
would have had the full right to disconnect his electricity. The Court
will not allow Villafuerte to profit from his own wrongdoing. He cannot
therefore rightfully claim moral damages. In LBC Express, Inc. v. Court
of Appeals,9 we deleted the award of moral damages to private respondent
who went to court with unclean hands, thus:

We can neither sustain the award of moral damages in favor

of the private respondents. The right to recover moral damages is based
on equity. Moral damages are recoverable only if the case falls under
Article 22 19 of the Civil Code in relation to Article 21. Part of
conventional wisdom is that he who comes to court to demand equity,
must come with clean hands.

In the case at bench, respondent Carlota is not without fault. He

was fully aware that his rural bank's obligation would mature on November
21, 1984 and his bank has set aside cash for these bills payable. He was
all set to go to Manila to settle this obligation. He has received the
documents necessary for the approval of their rediscounting application
with the Central Bank. He has also received the plane ticket to go to
Manila. Nevertheless, he did not immediately proceed to Manila but
instead tarried for days allegedly claiming hi s ONE THOUSAND
PESOS (Pl ,000.00) pocket money. Due to his delayed trip, he failed to
submit the rediscounting papers to the Central Bank on time and his
bank was penalized THIRTY-TWO THOUSAND PESOS (P32,000.00) for
failure to pay its obligation on its due date. The undue importance given
by respondent Carlota to his ONE THOUSAND PESOS (P l ,000.00)
pocket money is inexplicable for it was not indispensable for him to
follow up his bank's rediscounting application with Central Bank.
According to said respondent, he needed the money to "invite people for
a snack or dinner." The attitude of said respondent speaks ill of his ways
of business dealings and cannot be countenanced by this Court. Verily,
it will be revolting to our sense of ethics to use it as basis for awarding
damages in favor of private respondent Carloto and the Rural Bank of
Labason, Inc.

Without moral damages, Villafuerte is also not entitled to exemplary

damages. Exemplary damages are allowed only in addition to moral
damages such that no exemplary damage can be awarded when the right to
°
moral damages is not established. 1 Further, with the deletion of exemplary
11
damages, there is no basis to award attorney's fees, either.

As for Villafuerte' s claim for lost income, suffice it to state that

since he did not appeal its denial by the Court of Appeals, such denial had
already lapsed into finality.

9
306 Phil. 624, 628-629 (1994).
10 Pen Development Corp. v. Martinez Leyba, Inc., 816 Phil. 554, 572(2017).
11 See Article 2208(1 ), Civil Code of the Philippines.

B(141)URES -more-
 Resolution 6 G.R. No. 236877
March 1-B, 2021

MERALCO is entitled to claim

differential billing of SIN
972466301

MERALCO had sufficiently established the proper computation of

its differential billing for SIN 972466301 in accordance with RA 7832.
Its Billing Support Staff Michael Roland B. Arbues testified on how he
arrived at the billing differential in the amount of Pl22,456.90 for SIN
972466301. He produced and identified in evidence the billing history
for SIN 972466301 for the period from December 26, 2004, when the
meter was first installed, until August 24, 2007, when the loop connection
was discovered, including the computation sheet and power billing
routing slips. 12 To these, Villafuerte offered no countervailing evidence at
all. Clearly, therefore, MERALCO is entitled to collect from Villafuerte
the differential billing for SIN 972466301.

In Spouses Miano v. MERALCO 13 and Quisumbing v. MERALCO, 14

the Court allowed the collection of differential billing despite MERALCO's
failure to follow the proper procedure prior to power disconnection since
its documentary and testimonial evidence sufficiently proved the amount
of differential. So must it be.

Finally, the legal rate of six percent (6%) per annum is imposed on
the total money award reckoned from finality of this Resolution until fully
paid consistent with Nacar v. Gallery Frames. 15

WHEREFORE, the petition is PARTIALLY GRANTED. The

Decision dated August 16, 2017 and Resolution dated January 8, 2018 of
the Court of Appeals in CA-G.R. CV No. 103922 are AFFIRMED with
MODIFICATION.

The award of Pl 00,000.00 as moral damages, P50,000.00 as exemplary

damages and P50,000.00 as attorney's fees is DELETED for lack of basis.

MERALCO is ORDERED to restore Engr. Delfin A. Villafuerte, Jr.'s

electric power connection and/or service covered by Service Identification
No. 972466301.

On the other hand, Engr. Delfin A. Villafuerte, Jr. is DIRECTED

to pay MERALCO P323,83 l .45 representing the differential billing for
Service Identification No. 520679001 and P122,456.90 representing the
differential billing for Service Identification No. 972466301, plus legal
interest of six percent ( 6%) per annum from finality of this Resolution
until fully paid.

12
Record , pp. 282-294.
13
800 Phil. I 18 (2016).
1
~ Supra note 3.
15 716 Phil. 267 (2013).

B(141)URES -more-
 Resolution 7 G.R. No . 236877
March 1-B, 2021

SO ORDERED." (Rosario, J, on leave)

2 9 APR 2021

JUDGMENT DIVISION (x)

Supreme Court, Manila
*MERALCO LEGAL SERVICES DEPT. (reg)
Counsel for Petitioners PUBLIC INFORMATION OFFICE (x)
8/ F, Lopez Building LIBRARY SERVICES (x)
O11igas A venue, 1605 Pasig C ity [For uploading pursuant to A.M. No. 12-7-SC]

*CASTRO CASTRO & AS SOCIATES (reg) OFFICE OF THE CHIEF ATTORNEY (x)
Counsel for Respondent OFFICE OF THE REPORTER (x)
12D Mabuhay Street, Brgy. Central PHJLIPPINE JUDIC IAL ACADEMY (x)
Quezon City Supreme Court, Manila

*ENGR. DELFIN A. VILLAFUERTE, JR. (reg) COURT OF APPEALS (x)

Respondent Ma. Orosa Street
No. 14, Golden St., Gloria I Subd. Ermita, 1000 Manila
Brgy. Tandang Sora, 1116 Quezon C ity CA-G.R. CV No. 103922

HON. PRESIDING JUDGE ( reg) *with copies of CA Decis ion dated 16 August 20 17
Regional Trial Court, Branch 96 & Resolution dated 8 January 2018.
1100 Quezon City Please notify the Court of any change in your at/dress.
(Civi l Case No. Q-11-69565) GR236877. 3/0 1/2021B( 14 1)URES

B(141)URES -more-