DIGEST/Krizabel Martinez/MERALCO vs PH CONSUMERS FOUNDATION, INC.

 

G.R. No. 101783               January 23, 2002

MANILA ELECTRIC COMPANY, petitioner,
vs.
PHILIPPINE CONSUMERS FOUNDATION, INC., EDGARDO S. ISIP, HON. JUDGE MANUEL M. CALANOG, JR., and HON. JUDGE TIRSO D'C. VELASCO, respondents.

FACTS

Presidential Decree No. 551 was promulgated providing for the reduction from 5% to 2% of the franchise tax paid by electric companies. Philippine Consumers Foundation, Inc., (PCFI) filed with the Board of Energy (BOE) a "Petition for Specific Performance, Damages and Violation of P. D. No. 551" against the Manila Electric Company. PCFI sought for the immediate refund by Meralco to its customers of all the savings it realized under P.D. No. 551, through the reduction of its franchise tax from 5% to 2%, with interest at the legal rate; and for the payment of damages and a fine in the amount of P50, 000.00 for violating P.D. 551.

The BOE dismissed PCFI's petition, declaring that Meralco was indeed authorized by the BOE to retain the disputed savings under P.D. 551. PCFI filed a motion for reconsideration but was denied by the BOE. Hence, PCFI filed a Petition for Certiorari. However, it was dismissed for lack of merit.

Four years thereafter, PCFI and a certain Edgardo S. Isip, private respondents herein, filed with respondent Regional Trial Court, Branch 76, Quezon City, a petition for declaratory relief. Private respondents prayed for a ruling on who should be entitled to the savings realized by Meralco under P.D. No. 551. Once again, they insisted that pursuant to Section 4 of P.D. No. 551, the savings belong to the ultimate consumers.

On January 16, 1991, respondent RTC declared null and void the Resolution of the Court in G.R. No. 63018 and based on the Dissenting Opinion of the late Justice Claudio Teehankee, held that the disputed savings belong to the consumers.

 

ISSUES

Whether or not there is res judicata

Whether or not the remedy of filing a petition for declaratory relief is still available

RULING

Res judicata means a matter adjudged, a thing judicially acted upon or decided; a thing or matter settled by judgment. In res judicata, the judgment in the first action is considered conclusive as to every matter offered and received therein, as to any other admissible matter which might have been offered for that purpose, and all other matters that could have been adjudged therein. For a claim of res judicata to prosper, the following requisites must concur: 1) there must be a final judgment or order; 2) the court rendering it must have jurisdiction over the subject matter and the parties; 3) it must be a judgment or order on the merits; and 4) there must be, between the two cases identity of parties, subject matter and causes of action.

All the above requisites are extant in the records and thus, beyond dispute.

Re: FIRST REQUISITE - there must be a final judgment:

It is beyond question that this Court’s Resolution dated October 22, 1985 in G.R. No. 63018 attained finality on December 4, 1985. As a matter of fact, the Court had long ago issued an Entry of Judgment stating that the said Resolution "became final and executory and is x x x recorded in the Book of Entries of Judgements." Prior thereto, or on March 10, 1980, the BOE's Order in BOE Case No. 79-672 became final when the oppositors therein did not appeal.

Re: SECOND REQUISITE - the court which rendered the final judgment must have jurisdiction over the subject matter and the parties:

There is no question that the BOE has jurisdiction over the subject matter and the parties herein. Under P.D. No. 1206, the BOE is the agency authorized to "regulate and fix the power rates to be charged by electric companies." As such, it has jurisdiction over Meralco, an electric company, and over the savings it realized under P.D. No. 551. It bears stressing that P.D. No. 551 was passed precisely to enable the grantees of electric franchises to reduce their rates within the reach of consumers. Clearly, the matter on how the disputed savings should be disposed of to realize a reduction of rates is within the competence of the BOE.

Re: THIRD REQUISITE - it must be a judgment or order on the merits:

The BOE's Decision in BOE Case No. 82-198 is a judgment on the merits. A judgment is on the merits when it determines the rights and liabilities of the parties based on the disclosed facts, irrespective of formal, technical, or dilatory objections. After according both parties the opportunities to be heard, the BOE disposed of the controversy by resolving the rights of the parties under P.D. No. 551. In its Decision, the BOE declared in clear and unequivocal manner that Meralco "has been duly authorized to retain the savings realized under the provisions of P.D. No. 551" and that private respondent PCFI’s argument to the contrary is "untenable." The BOE's Decision was upheld by the Court in G.R. No. 63018.

Re: FOURTH REQUISITE - there must be between the two cases identity of parties, subject matter and causes of action:

There is identity of parties between the two cases. BOE Case No. 82-198 was a contest between private respondent PCFI, as petitioner, and Meralco, as respondent. Civil Case No. Q-89-3659 involves the same contenders, except that respondent Edgardo Isip joined PCFI as a plaintiff. But his inclusion as such plaintiff is inconsequential. A party by bringing forward, in a second case, additional parties cannot escape the effects of the principle of res judicata when the facts remain the same. Res judicata is not defeated by a minor difference of parties, as it does not require absolute but only substantial identity of parties.

The subject matters of BOE Case No. 82-198 and Civil Case No. Q-89-3659 are likewise identical since both refer to the savings realized by Meralco from the reduction of the franchise tax under P.D. No. 551. The subject matter of an action refers to the thing, wrongful act, contract or property which is directly involved in the action, concerning which the wrong has been done and with respect to which the controversy has arisen. In both cases, the controversy is how the disputed savings shall be disposed of - whether they shall be retained by Meralco or be passed on to the consumers.

With respect to identity of causes of action, this requisite is likewise present. In both cases, the act alleged to be in violation of the legal right of private respondents is Meralco's retention of the savings it realized under P.D. No. 551. While it is true that BOE Case No. 82-198 is one for specific performance, while Civil Case No. Q-89-3659 is for declaratory relief - in the ultimate - both are directed towards only one relief, i.e., the refund of the disputed savings to the consumers. To seek a court's declaration on who should benefit from the disputed savings (whether Meralco or the consumers) will result in the relitigation of an issue fairly and fully adjudicated in BOE Case No. 82-198.

Clearly, the test of identity of causes of action lies not in the form of an action. The difference of actions in the aforesaid cases is of no moment. The doctrine of res judicata still applies considering that the parties were litigating for the same thing and more importantly, the same contentions. As can be gleaned from the records, private respondents’ arguments in Civil Case No. Q-89-3659 bear extreme resemblance with those raised in BOE Case No. 82-198.

Respondent RTC's Decision granting PCFI and Isip's petition for declaratory relief is in direct derogation of the principle of res judicata. Twice, it has been settled that Meralco is duly authorized to retain the savings it realized under P.D. No. 551 if its rate of return falls below the 12% allowable rate. The pronouncement of the BOE in BOE Case No. 82-198 finding such fact to be "beyond question" is clear and not susceptible of equivocation. This pronouncement was sustained by this Court in G.R. No. 63018.

The purpose of an action for declaratory relief is to secure an authoritative statement of the rights and obligations of the parties under a statute, deed, contract etc. for their guidance in the enforcement thereof, or compliance therewith, and not to settle issues arising from an alleged breach thereof. It may be entertained only before the breach or violation of the statute, deed, contract etc., to which it refers. The petition gives a practical remedy in ending controversies which have not reached the stage where other relief is immediately available. It supplies the need for a form of action that will set controversies at rest before they lead to repudiation of obligations, invasion of rights, and the commission of wrongs. Here, private respondents brought the petition for declaratory relief long after the alleged violation of P.D. No. 551.