MERALCO V.

TEAM ELECTRONIC CORP

G.R. No. 131723
FACTS OF THE CASE
The law in force at the time material to this controversy was PD 401.
It penalized unauthorized installation of water, electrical, telephone
connections and such acts as the use of tampered electrical meters. PD 401
granted the electrical companies the right to conduct inspections of electric
meters and the criminal prosecution or erring customers who were found to
have tampered with their electrical meters. It did not provide for more
expedient remedies as the charging of differential billing and immediate
disconnection against erring customers. Thus, electric companies found a
creative way of availing themselves of such remedies by inserting into the
service contracts a provision for differential billing with the option of
disconnection upon non-payment by the erring customers. The Court has
recognized the validity of such stipulations. However, recourse to differential
billing with disconnection was subject to the prior requirement of a 48-hour
written
notice
of
disconnection.
MERALCO, in the instant case, resorted to the remedy of disconnection
without prior notice. While it is true that MERALCO sent a demand letter to
TEC for the payment of differential billing, it did not include any notice that
the electric supply would be disconnected. In fine, it abused the remedies
granted to it under PD 401 by outright depriving TEC of electric services
without
first
notifying
it
of
the
impending
disconnection.
ISSUES
Is TEC , a corporation not entitled to moral damages?
RULINGS
SC deems it proper to delete the award of moral damages. TEC's claim
was premised allegedly on the damage to its goodwill and reputation. as a
rule, a corporation is not entitled to moral damages because, not being a
natural person, it cannot experience physical suffering or sentiments like
wounded feelings, serious anxiety, mental anguish, and moral shock. The
only EXCEPTION to this rule is when the corporation has a reputation that is
debased, resulting in its humiliation in the business realm. but in such a
case, it is imperative for the claimant to present proof to justify the award. It
is essential to prove the existence of the factual basis of the damage and its
causal relation to petitioner's acts. In the present case, the records are bereft
of any evidence that the name or reputation of TEC/TPC has been debased
as a result of petitioner's act. Besides, the trial court simply awarded moral

damages in the dispositive portion of its decision without stating the basis
thereof