This is a petition for review^[1] to set aside the Decision^[2] dated 14 November 2000 of the Court of Appeals ("appellate court") in CA-G.R. CV No. 49465.  The appellate court affirmed the Decision^[3] dated 24 June 1994 issued by Branch 17 of the Regional Trial Court of Malolos, Bulacan ("trial court") in Civil Case No. 170-M-89.  The trial court ruled that the interest charges imposed by Manila Electric Company ("Meralco") against Imperial Textile Mills, Inc. ("ITM") in the assignment of ITM's tax credit certificates are void.  The trial court also ruled that Meralco's claims for differential billing for ITM's unregistered energy consumption are void.


The facts as found by the appellate court are as follows:

ITM is a pioneer textile manufacturer which produces textiles and allied products, with its factory situated on a 20-hectare lot in Marilao, Bulacan. As a textile manufacturing exporter registered with the Board of Investment, it is entitled to tax refunds based on tax rebates as an incentive to a manufacturer of registered export products. In its operations, ITM uses electricity which is supplied by Meralco. Meralco accepts from its customers certificates of tax credits which it applies as payment for their electric bills.

On September 8, 1987, Meralco and ITM entered into an agreement whereby Meralco agreed to the proposal of ITM for the assignment of its tax credits in payment of its electric bills.

However, after the corresponding deeds of assignment had been signed, Meralco began sending conflicting statements of accounts to ITM. Meralco has applied a portion of the tax credits for the payment of supposed accumulated interest charges at the rate of 16.75% to 17.5% per annum, thereby diminishing the value of the assigned tax credits.  ITM contested the payment of the interest charges.  It insisted that Meralco should apply the tax credits to the payment of its accounts without any interest deduction charges.

On November 18, 1987, Meralco presented a "differential billing" to ITM in the amount of P2,531,500.45 corresponding to the "unregistered energy consumption" of ITM for the period of December 27, 1985 to  November 18, 1987 as a result of ITM's alleged tampering with the metering device in its premises. Meralco claimed that "the current leads for all elements were found with pricked holes near the BCTs."  ITM denied the charge of tampering.  Nevertheless, Meralco proceeded to disconnect the power supply to ITM for its failure to pay the differential billing.  ITM was thus constrained to make a fast arrangement with Meralco for the immediate restoration of electricity to keep the plant in operation. ITM paid the amount of P506,300.09 to Meralco under protest and undertook to pay the balance on installments of P226,218.88 per month.

On February 19, 1988, Meralco conducted another inspection and claimed to have discovered another instance of tampering. It demanded payment from ITM of a differential billing of P1,707,051.47 for the period  January 22, 1986 to February 19, 1988, with a threat to disconnect ITM's electric service if the same was not paid. ITM again denied the charge of tampering.  It blamed Meralco for not installing a single metering system in the ITM premises, as had been previously agreed in a court-approved compromise in another case, to obviate charges of tampering.

On March 20, 1989, Meralco informed ITM that it had an outstanding bill in the amount of P6,929,001 which included interest charges and other charges for alleged violation of their contract.

Thereupon, ITM filed a complaint against Meralco for injunction, specific performance and damages, with a prayer for a temporary restraining order. It prayed that Meralco be ordered to return to ITM all interest deductions on its tax credits and to disregard the differential billings as without basis.  It also asked for the award of damages and attorney's fees.^[4]

On 24 May 1993, the trial court issued an order stating that the case is deemed submitted for decision for Meralco's failure to file its formal offer of evidence within the reglementary period prescribed in the 8 February 1993 order.  On Meralco's motion for reconsideration, the trial court admitted Meralco's exhibits and offer of evidence in an order dated 8 June 1993.  On 24 June 1994, the trial court decided in favor of ITM.  The trial court held that:

WHEREFORE, judgment is hereby rendered in favor of [ITM] and against [Meralco] ordering the following:

1. The interest charges unilaterally imposed by [Meralco] against [ITM] in the assignment of its tax credit certificates [are] hereby declared null and void for lack of legal basis.  The amount of P3,814,816.61 imposed and collected by [Meralco] by way of interest charges shall be applied to future electrical bills of [ITM] in favor of [Meralco];
   
   
2. The claim of [Meralco] for Differential Billing in the amount of P2,531,500.45 under Account No. 9496-1422-18 is hereby declared null and void for lack of legal and/or factual basis;
   
   
3. The amount of deposit made by [ITM] under protest pursuant to a Promissory Note in the amount of P506,300.09 and such other deposits made in compliance therewith, shall be applied to the future electric bills of [ITM in favor of Meralco];
   
   
4. The claim of [Meralco] for Differential Billing in the amount of P1,707,051.47 under Account No. 9496-1622-16 is likewise hereby declared null and void for want of legal and/or factual basis; and
   
   
5. [Meralco] is hereby ordered to pay a reasonable amount of P50,000 as and for attorney's fees.
   

The counterclaim of Meralco is hereby dismissed for lack of legal and/or factual basis.

SO ORDERED.^[5]

Meralco filed its notice of appeal to the appellate court on 29 July 1994.


On 14 November 2000, after reviewing both parties' claims, the appellate court dismissed the appeal and affirmed the trial court's decision.^[6]

The appellate court found that there was nothing in the 8 September 1987 agreement between Meralco and ITM that imposed on ITM the obligation to pay interest charges on its electric bills.  The appellate court summarized the agreement thus:

The agreement simply stipulates: first, that ITM will pay its electric bills regularly when they become due, and second, ITM's tax credits will be applied to its electric bills when the tax credits have already been assigned to Meralco and the corresponding deeds of assignment have been approved by all government agencies concerned.^[7]

The appellate court also found no basis to hold ITM liable for the payment of differential billings to Meralco.  The appellate court found that:

The presence of pricked holes on the secondary lead wires near the BCTs (bushing current transformer), for lack of substantial evidence, cannot be imputed to ITM.  Notably, Meralco inspectors have not found any shorting device in ITM's plant.  The argument of Meralco that even without the presence of any shorting pin, the circumstance (meaning, the presence of the "pricked holes") nonetheless shows tampering for the purpose of preventing the accurate registration of electrical consumption, is purely conjectural.  In fact, as testified to by Vicente Saria, a Meralco inspector, without a shorting device, the consumption would still be normal even if there are pricked holes on the lead wires.^[8]

In addition, the appellate court also observed that after Meralco inspected and corrected ITM's electric meters, there was even a reduction in ITM's recorded electric consumption.


Meralco states that the appellate court seriously erred in affirming the trial court's ruling that:

1. Meralco did not have basis to impose the subject "interest charges";
   
   
2. Meralco did not have basis to recover from ITM the P2,531,500.45 covered by the subject differential bill under Account No. 9496-1422-18;
   
   
3. Meralco did not have basis to recover from ITM the P1,707,051.47 covered by the subject differential bill under Account No. 9496-1622-16;
   
   
4. Meralco should apply ITM's P506,300.09 deposit to ITM's future electric bills; and
   
   
5. Meralco should pay ITM attorney's fees.^[9]
   

We find the appeal meritorious. While only questions of law may be raised in a petition for review under Rule 45 of the 1997 Rules of Civil Procedure, review of the lower courts' findings of fact may be granted under certain exceptions.^[10] One of the exceptions is when the judgment of the appellate court is premised on a misapprehension of facts.^[11] Another is when the findings of fact are premised on the supposed absence of evidence but is contradicted by the evidence on record.^[12] Also, this Court may review findings of fact when the conclusion of the appellate court manifestly overlooked certain facts not disputed by the parties and which, if properly considered, would justify a different conclusion.^[13]

Payment of Interest Charges

In its petition, Meralco argued that both the trial court and the appellate court misunderstood the meaning of the interest charges that Meralco imposed on ITM.  Meralco denied that the interest charges were in payment by a debtor to a creditor for the use of money lent.  Rather, Meralco claimed that the interest charges represent the penalty on Meralco's late payment of franchise taxes.  Meralco alleged that ITM caused the delayed submission of the required documents to effect the assignment of ITM's tax credits to Meralco.

Meralco asserted that the Deeds of Assignment authorized the shifting to ITM of the burden of paying the interest charges on Meralco's late payment of franchise taxes.  The Deeds of Assignment provide that:

xxx ASSIGNOR agrees to assign in favor of ASSIGNEE the aforesaid tax credit so as to fully utilize the value thereof against future franchise tax payables.^[14]

Meralco further asserted that ITM's acts show its acquiescence to the imposition of the interest charges. ITM protested payment of the interest charges only after a prolonged period elapsed.  ITM even asked Meralco to waive the imposition of the interest charges.  Meralco contended that ITM's acts should be construed as estoppel by laches, thus leading Meralco to believe that the imposition of interest charges was in accordance with the agreement between the parties.

We are not persuaded.

The Deeds of Assignment that ITM executed in favor of Meralco are uniform in wording, differing only as to the dates and the amount of tax credits assigned.  The Deeds of Assignment provide that:

WHEREAS, in a letter offer dated xxx of the ASSIGNOR to the ASSIGNEE, the latter agreed to offset the value of the tax credit duly issued under the former's name against its current receivables accounts;

WHEREAS, by reason of its registration with the Board of Investment as a registered export producer, ASSIGNOR, is entitled to a refund or tax credit based on Tax Rebate under standard Rate imposed by law as an incentive for the manufacture of registered export products;

WHEREAS, on the following stated dates, ASSIGNOR was granted by the Board of Investments a total tax credit of xxx with the corresponding tax credit certificate numbers:

xxx

Photocopy of said tax credit certificates are attached and made a part hereof;

WHEREAS, ASSIGNOR warrants that said tax credits are genuine, valid and subsisting, and that it has no account and/or administrative case with any government revenue agency;

WHEREAS, ASSIGNOR waives all its rights to use the aforesaid Tax Credit Certificates enumerated above amounting to xxx issued by the Board of Investments and that ASSIGNOR agrees to assist ASSIGNEE in effecting the transfer/assignment by providing all the necessary documents required by the Board of Investments;

WHEREAS, in accordance with the understanding and agreement in connection with the settlement of ASSIGNEE's current receivable account, ASSIGNOR agrees to assign in favor of ASSIGNEE the aforesaid tax credits so as to fully utilize the value thereof against future franchise tax payables.

NOW, THEREFORE, for and in consideration of the foregoing premises and covenants herein contained, ASSIGNOR hereby assigns, transfers and conveys in favor of the ASSIGNEE that aforesaid tax credits mentioned above up to the amount of xxx stipulated; ASSIGNEE shall corresponding issue the appropriate credit note to ASSIGNOR to evidence timely settlement of its current account.^[15]

Under the Deed of Assignment, it is ITM's obligation to ensure that Meralco can utilize the full value of the tax credits assigned. There is nothing in the Deeds of Assignment which states that Meralco's current receivable account with ITM includes interest charges for Meralco's late payment of franchise taxes. ITM has no obligation to pay interest on Meralco's late payment of franchise taxes.

Meralco, through L. D. Torres, Vice President and Head of the Legal Services Department, wrote to Cesar Marcelo, ITM's Vice President for Finance, on ITM's request to pay its electric bills through assignment of tax credit certificates.  The letter ("letter-agreement"), dated 8 September 1987, reads thus:

Mr. Cesar R. Marcelo
Vice President - Finance
Imperial Textile Mills, Inc.
Km 21 McArthur Hi-way
Marilao, Bulacan

Dear Mr. Marcelo:

This has reference to your letter dated August 5, 1987 requesting for the transfer of your Company's tax credits to the Manila Electric Company (MERALCO) as payment [for] electricity consumed.

Please be informed that upon representations made by your Mr. Robert Ong with MERALCO, we did not interpose any objection to your request on the condition that henceforth you will take care of your metering facilities to avoid the same being tampered with thereby preventing any loss of electric energy on the part of MERALCO in your Company's plants and premises.  It is likewise understood that you are to pay your electric bills regularly when the same are due and your tax credits will only be applied to your bills when these tax credits have been duly assigned to MERALCO and the deed of assignment have [sic] been approved by all government agencies concerned.

We have actually started working out the documentary requirements to effect the requested transfer but we will only release the same after receipt of your written confirmation that you are agreeable to the above-stated conditions. It is understood and agreed that you are duly authorized to execute this document and signify your conformity to this agreement.

We shall expect your early reply in this regard.

Very truly yours,
(signed)
L.D. TORRES
Vice President & Head
Legal Services Dept.

CONFORME:

IMPERIAL TEXTILE MILLS, INC.

By:           (signed)
     CESAR R. MARCELO
     Vice President - Finance^[16]

According to the letter-agreement, Meralco granted ITM's request to pay its electric bills thru assignment of tax credit certificates provided that: (1) ITM would take care of its metering facilities to avoid the same being tampered; (2) ITM would pay its electric bills regularly when they become due; and (3) ITM's tax credits would be applied to its electric bills when the tax credits have already been assigned to Meralco and the corresponding deeds of assignment have been approved by all government agencies concerned.  Like the Deeds of Assignment, there is nothing in the letter-agreement which states that ITM would be held liable for Meralco's payment of interest charges for late payment of franchise taxes.

Meralco had a different interpretation of the reckoning point in determining the date of payment thru tax credits.  Mr. Martinez, from Meralco's Tax & Tariff Section, explained Meralco's position regarding tax credits and interest charges during a meeting between Meralco and ITM on 7 February 1989. The purpose of the meeting was to reconcile ITM's account with Meralco's records.  The pertinent portions of the minutes of the meeting read:

Mr. G.F. Martinez, of Tax & Tariff Section, informed the body that acceptance of Tax Credit Certificates (TCCs) thru the signing of Deed of Assignment by Meralco shall not mean an outright payment of ITM's electric bills. The reckoning point of determining the date of payment, thru Tax Credit transfers, of ITM's electric bills is the date of the actual application and utilization of duly transferred Tax Credits against Meralco's payment of franchise tax.

He specified that the period of interest charges is reckoned from ten (10) days after presentation of the Statement of Account up to the date of utilization or application of Tax Credit Certificates (TCCs) against Meralco's payment of franchise tax which falls on the 20^th day of every month, and not upon TCC's date of assignment/transfer in favor of Meralco. Mr. Martinez reasoned out that not all TCCs are approved by the government body on total face value. As a consequence, it is advisable that ITM transfer of duly approved TCCs in favor of Meralco be done five days before the 20^th day of the month to give Tax & Tariff Section reasonable time for processing.

On the question why Meralco charges interest for late payment of GP customers, Mr. Martinez explained that NPC charges Meralco with interest for the latter's late payment. It is in the same breadth that Meralco deems reasonable to recover the interest cost.^[17]

As of 20 March 1989, Meralco has charged ITM a total of P3,814,816.61 as interest charges for delay in the application of tax credits.^[18] Meralco charged ITM interest at the rate of 14.50% to 18.00% per annum.^[19] However, the letter-agreement and the deeds of assignment do not authorize Meralco to charge ITM interest for delay in the approval of the tax credits. Neither do they authorize Meralco to pass on to ITM the penalty that Meralco would have to pay for late payment of its franchise tax.

Nevertheless, ITM must pay on time its electric bills as stipulated in the letter-agreement, otherwise ITM would be liable for damages in the form of interest charges pursuant to Article 2209^[20] of the Civil Code. ITM should consider its bills paid only after the tax credit certificates assigned to Meralco have been approved by all government agencies concerned, to the extent of the value approved.  Thus, ITM must assign the tax credits to Meralco and secure the approval of the deed of assignment by all government agencies concerned not later than the due date for its electric bills, otherwise interest would accrue.

Meralco can charge ITM interest for delay in the payment of ITM's electric bills pending approval of the tax credit. However, Meralco cannot shift to ITM the penalty for late payment of franchise taxes.   Both parties should have strictly adhered to the terms of application of payment stipulated in their agreement.  ITM is liable only for damages for the delay in the payment of electric bills pending approval of the tax credits. Since there is no interest stipulated by the parties, the indemnity for damages shall be the payment of legal interest at 6% per annum based on the outstanding electric bills. The 6% interest shall accrue from the due date of ITM's electric bills up to the time of approval of the assignment of tax credits by all government agencies concerned.

Differential Billings

Both the trial court and the appellate court found no factual or legal basis to hold ITM liable for the payment of the differential billings.  We hold otherwise. The records reveal that both the trial court and the appellate court overlooked and disregarded the evidence in favor of Meralco, and which evidence ITM failed to refute.

To justify its conclusion that the electric meter covered by Account No. 9496-1422-18 was tampered to prevent the accurate registration of ITM's energy consumption, Meralco alleged the following facts:

First, the current leads for all elements in the electric metering installation in ITM's premises had holes pricked thereon.

Second, these holes were unnaturally pricked in pairs. In other words, the existence of holes pricked on the current leads of the electric metering installation and the positions in which said holes were found indicate that the said leads were intentionally pricked for the purpose of disrupting the registration of ITM's electric energy consumption by inserting a shorting device.

Third, if shorting devices are inserted in these holes, only the registration of ITM's actual electric energy consumption, and not its supply of electricity, will be affected. Thus, the insertion of shorting devices is a good scheme to prevent the registration of electric energy consumption since continuous electric supply is maintained.

Fourth, ITM's monthly average consumption from December 1985 to November 1987 was 207,067 Kilowatts per hour (Kwh).  Within the 23-month period before the 17 November 1987 inspection, however, ITM's electric energy consumption went down to as suspiciously low as 34,400 Kwh in January 1986.

Fifth, the Demand Charts for the period 27 December 1985 to 18 November 1987, show very little or absolutely no usage of electricity for long periods of time which is totally inconsistent with ITM's daily 24 hour textile manufacturing operations.^[21]

To justify its conclusion that there was tampering of the electric meter covered by Account No. 9496-1622-16 to prevent the accurate registration of ITM's energy consumption, Meralco alleged the following facts:

First, the BCT of the electric metering installation could not be sealed and the current leads for the lower element had holes pricked thereon near the BCT. The foregoing findings were confirmed in a subsequent laboratory test conducted at Meralco's meter laboratory.

Second, shorting the BCT by placing a device in holes pricked on the secondary current leads is one of the most common method[s] of tampering electric metering installations for the purpose of affecting its capability to register electric energy consumption.

Third, as in the case of Account No. 9496-1422-18, if shorting devices are inserted in these holes, only the registration of ITM's actual electric energy consumption, and not its supply of electricity, will be affected. x x x

Fourth, ITM's monthly average consumption from January 1986 to February 1988 was 218,190 Kwh.  Within the 19 month period before the 19 February 1988 inspection, ITM's electric energy consumption went down to as suspiciously low as 12,000 Kwh in January 1986.

Fifth, the Demand Charts for the period 27 December 1985 to 24 February 1985 show very little usage of electricity for long periods of time which is totally inconsistent with ITM's daily 24 hour textile manufacturing operations.^[22]

Meralco offered the following evidence to prove that ITM tampered with two of its electric meters to prevent the accurate registration of ITM's energy consumption:

1. Photographs of the holes pricked on the secondary lead wires of ITM's electric metering installations of Account Nos. 9496-1422-18 and 9496-1622-16, taken during the inspection of Meralco. (Exhs. "1" to "1-f-3" and "5" to "5-a")
   
   
2. Service Inspection Reports dated 18 November 1987 and 19 February 1988 with findings of the existence of pricked holes on secondary current leads. (Exhs. "4" and "8")
   
   
3. Polyphase Meter Test Memos with the findings that the BCT's were being shorted by means of a removable shorting device as indicated by pricked holes on all the secondary current leads near the BCTs. (Exhs. "9" to "10" and "53")
   
   
4. Meralco's Billing Records for ITM under Account Nos. 9496-1422-18 and 9496-1622-16. (Exhs. "11" to "11-f" and "54")
   
   
5. Demand Charts for Account No. 9496-1422-18 for the period 26 August 1985 to 18 November 1987. (Exhs. "12" to "50")
   
   
6. Demand Charts for Account No. 9496-1622-16 for the period 27 December 1985 to 24 February 1988. (Exhs. "55" to "55-t")
   
   
7. Meralco's Detailed Computation of Losses under Account No. 9496-1422-18. (Exhs. "51" and "51-a")
   
   
8. Meralco's Detailed Computation of Losses under Account No. 9496-1622-16. (Exhs. "56" and "56-a")
   

Instead of refuting Meralco's allegation of ITM's tampering of electric meters, ITM countered by faulting Meralco for failure to replace the multi-metering system with a single metering system in accordance with a court-approved compromise agreement.^[23] ITM asserts that the occurrences of alleged tampering could have been avoided had Meralco complied with the compromise agreement.  ITM further alleges that Meralco's inspectors did not discover any removable shorting device during their inspections on 18 November 1987 and 19 February 1988.

ITM, however, did not refute Meralco's allegation about the sudden decline in ITM's energy consumption, particularly under Account Nos. 9496-1422-18 and 9496-1622-16. ITM could not explain why there was no consumption recorded for consecutive days or weeks as shown on the demand charts for Account No. 9496-1422-18, covering the period from 27 March 1987 to 26 May 1987. Neither could ITM explain why the demand charts for Account Nos. 9496-1422-18 and 9496-1622-16 show very little usage of electricity for long periods of time. The demand charts show intermittent gaps which is inconsistent with ITM's daily 24-hour textile operation.

The evidence presented clearly shows there was tampering of electric meters which led to non-registration of ITM's correct electrical consumption. Thus, Meralco issued differential billings of  P2,531,500.45 for Account No. 9496-1422-18 and P1,707,051.47 for Account No. 9496-1622-16. However, the differential billings for Account Nos. 9496-1422-18 and 9496-1622-16 should only include the period after 23 October 1986. ITM's differential billing as of 23 October 1986 amounting to P43,967,860.55 was already the subject of a court-approved compromise agreement between Meralco and ITM.^[24] Berdio Jambalos ("Engineer Jambalos"), the Supervising Engineer of Meralco who computed the differential billings of ITM, admitted under cross-examination that he was not aware of the compromise agreement.^[25] This explains why the differential billings still included the period already covered by the compromise agreement.

Meralco's computation^[26] of losses for ITM's Account No. 9496-1422-18 for the affected period^[27] after 23 October 1986 states:

Date	Billing Rendered Demand  P.F.  KWH   Amount	Corrected Billing Demand P.F.  KWH  Amount	Difference KWH  Amount
NOV 25 86	500.0     97.0    132,400    261,177.91	500.0      85.7  207,067  411,223.91	74,667  150,046.00
DEC 26 86	500.0     97.2    141,600    284,076.60	500.0      85.7  207,067  419,999.26	65,467  135,922.66
JAN 26 87	500.0     95.0    160,000    323,471.78	500.0      85.7  207,067  420,274.01	47,067    96,802.23
FEB 25 87	500.0     97.8    181,600    354,668.65	500.0      85.7  207,067  414,343.65	25,467    59,675.00
MAR 27 87	500.0     94.9    216,800    425,951.53	500.0      85.7  216,800  432,791.06	0          6,839.53
APR 24 87	500.0     93.8    188,800    384,174.28	500.0      85.7  207,067  426,471.66	18,267    42,297.38
MAY 26 87	500.0     93.9    227,200    462,102.17	500.0      85.7  227,200  469,542.02	0          7,439.85
JUN 25 87	500.0     95.9    202,400    411,017.90	500.0      85.7  207,067  433,089.99	4,667      22,072.09
JUL 27 87	500.0     94.9    209,200 439,343.63	500.0      85.7  209,200  446,405.93	0          7,062.30
AUG 26 87	500.0     97.4    188,000    391,536.41	500.0      85.7  207,067  442,781.82	19,067    51,245.41
SEP 25 87	500.0     94.1    223,200    440,380.70	500.0      85.7  223,200  447,480.74	0          7,100.04
OCT 26 87	500.0     93.1    183,200    360,920.90	500.0      85.7  207,067  412,141.85	23,867    51,220.95
NOV 24 87	500.0     94.6    198,800    374,660.45	500.0      85.7  203,951  390,152.81	5,151      15,492.36
TOTAL	2,453,200   4,913,482.91	2,736,887  5,566,698.71	283,687 P653,215.80

 
Meralco's computation^[28] of losses for Account No. 9496-1622-16 for the affected period after 23 October 1986 states:

Date	Billing Rendered Demand  P.F.  KWH   Amount	Corrected Billing Demand P.F.  KWH  Amount	Difference KWH  Amount
NOV 25 86	500.0    93.8    152,400     302,525.38	500.0      99.7   218,190   419,541.79	65,790   117,016.41
DEC 26 86	500.0    94.9    166,800     336,474.20	500.0      99.7   218,190   428,505.75	51,390    92,031.54
JAN 26 87	500.0    94.0    165,600     334,226.84	500.0      99.7   218,190   428,808.38	52,590    94,581.53
FEB 25 87	500.0    92.5    204,400     402,726.60	500.0      99.7   218,190   422,751.89	13,790    20,025.28
APR 24 87	500.0    88.0    195,600     403,772.29	500.0      99.7   218,190   435,144.26	22,590    31,371.97
OCT 26 87	500.0    96.3    212,400     409,802.79	500.0      99.7   218,190   420,527.04	5,790     10,724.25
DEC 24 87	500.0    99.3    193,200     383,387.22	500.0      99.7   218,190   430,807.09	24,990    47,419.87
JAN 25 88	500.0    93.8    135,600     271,270.25	500.0      99.7   218,190   425,691.38	82,590  154,421.13
FEB 24 88	500.0  100.0    194,400     358,313.63	500.0      99.7   212,225   389,782.03	17,825    31,468.40
TOTAL	1,620,400 3,202,499.20	2,175,935  3,801,559.61	337,345 P599,060.41[29]

Thus, ITM is liable for P653,215.80 under Account No. 9496-1422-18 and P599,060.41 under Account No. 9496-1622-16.  However, since ITM has already paid under protest P506,300.09 to Meralco, this amount shall be deducted from the total differential billing of ITM under Account Nos. 9496-1422-18 and 9496-1622-16.

In computing the differential billing for Account No. 9496-1622-16, Engineer Jambalos used the average energy consumption during the period of January-December 1985, the 12-month period prior to the affected period.^[30] However, for Account No. 9496-1622-16, the basis for the computation of the differential billing was the average consumption registered by the Meralco meter during the period subsequent to the affected period.^[31]

The subsequent billing period used as basis covered the daily average consumption from 19 February 1988 to 25 April 1988. According to Engineer Jambalos, he used the subsequent billing period as the basis of computation because the billing periods before the affected period were also subject of numerous differential billings.^[32] We find the use of the subsequent billing period reasonable.

Attorney's Fees

We do not find the award of attorney's fees justified in this case. The general rule is that no premium should be placed on the right to litigate.^[33] We find no evident bad faith by Meralco which would justify the award of attorney's fees.^[34]

WHEREFORE, we SET ASIDE the Decision of the Court of Appeals and RENDER a new one:

1. Imperial Textile Mills, Inc. shall pay Manila Electric Company the differential billing for Account No. 9496-1422-18 which is reduced from P2,531,500.45 to P653,215.80;
   
   
2. Imperial Textile Mills, Inc. shall pay Manila Electric Company the differential billing for Account No. 9496-1622-16 which is reduced from P1,707,051.47 to P599,060.41;
   
   
3. The amount of P506,300.09 paid under protest by Imperial Textile Mills, Inc. to Manila Electric Company shall be deducted from the total differential billing of Imperial Textile Mills, Inc. under Account Nos. 9496-1422-18 and 9496-1622-16;
   
   
4. We declare VOID the interest charges Manila Electric Company unilaterally imposed on Imperial Textile Mills, Inc. to cover the penalty for Manila Electric Company's late payment of franchise taxes.  The amount of P3,814,816.61 interest charges which Manila Electric Company collected from Imperial Textile Mills, Inc.  shall be applied to the interest charges due from Imperial Textile Mills, Inc. under sub-paragraph 4 below, as well as to the payment of outstanding electric bills of Imperial Textile Mills, Inc.  to Manila Electric Company, and the excess, if any, shall be refunded by Manila Electric Company to Imperial Textile Mills, Inc.; and
   
   
5. We REMAND this case to the trial court for determination of damages owed by Imperial Textile Mills, Inc. to Manila Electric Company for late payment of electric bills, computed at 6% interest per annum on the amount of electric bills from due date until full payment by the application of tax credits.
   

SO ORDERED.

Davide, Jr., C. J., (Chairman), Quisumbing, and Ynares-Santiago, JJ., concur.
Azcuna, J., no part. former counsel to a party.

---

^[1] Under Rule 45 of the 1997 Rules of Civil Procedure.

^[2] Penned by Associate Justice Oswaldo D. Agcaoili, with Associate Justices Fermin A. Martin, Jr. and Eriberto U. Rosario, Jr., concurring.

^[3] Penned by Judge Camilo O. Montesa, Jr.

^[4] Rollo, pp. 47-49.

^[5] Records, pp. 599-600.

^[6] Rollo, pp. 46-60.

^[7] Ibid., pp. 54-55.

^[8] Ibid., pp. 56-57.

^[9] Ibid., p. 26.

^[10] See Martinez v. Court of Appeals, G.R. No. 123547, 21 May 2001, 358 SCRA 38.  The exceptions are:

(a) when the conclusion is a finding grounded entirely on speculation, surmises, or conjectures;

(b) when the inference made is manifestly mistaken, absurd, or impossible;

(c) where there is a grave abuse of discretion;

(d) when the judgment is based on a misapprehension of facts;

(e) when the findings of fact are conflicting;

(f) when the Court of Appeals, in making its findings, went beyond the issue of the case and the same is contrary to the admissions of both appellant and appellee;

(g) when the findings of the Court of Appeals are contrary to those of the trial court;

(h) when the findings of fact are conclusions without citation of specific evidence on which they are based;

(i) when the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondents;

(j) when the finding of fact of the Court of Appeals is premised on the supposed absence of evidence but is contradicted by the evidence on record; and

(k) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a different conclusion.

^[11] Manila Memorial Park Cemetery, Inc. v. Linsangan, G.R. No. 151319, 22 November 2004, 443 SCRA 377; Firme v. Bukal Enterprises and Development Corporation, G.R. No. 146608, 23 October 2003, 414 SCRA 190.

^[12] Rupa, Sr. v. Court of Appeals, 380 Phil. 112 (2000).

^[13] Mercury Drug Corporation v. Libunao, G.R. No. 144458, 14 July 2004, 434 SCRA 404; The Insular Life Assurance Company, Ltd. v. Court of Appeals, G.R. No. 126850, 28 April 2004, 428 SCRA 79.

^[14] Records, pp. 28, 31, and 34.

^[15] Ibid., pp. 27-28, 30-31, and 33-34. (Emphasis supplied)

^[16] Ibid., p. 26. (Emphasis supplied)

^[17] Exh. "59"; Records, pp. 577-578. (Emphasis supplied)

^[18] Exh. "D"; Ibid., pp. 61-62.

^[19] Ibid.

^[20] Article 2209 of the Civil Code provides: "If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is six percent per annum."

^[21] Rollo, pp. 32-34.

^[22] Ibid., pp. 34-36.

^[23] Exhibit "G"; Records,   pp. 70-71.  Decision  in   Civil Case  No. 53869, dated   24  March 1987,  penned  by  Judge Eutropio Migriño of Branch 151, Regional Trial Court of Pasig, Metro Manila.

^[24] Exhibit "G"; Records, pp. 70-71.

^[25] TSN, 17 September 1992, pp. 5-6.

^[26] Exhs. "51" to "51-a"; Records, pp. 535-536.

^[27] The affected period is a series of billing periods wherein the Meralco meter failed to register the full amount of electricity consumption.

^[28] Exhs. "56" to "56-a"; Records, pp. 567-568.

^[29] The correct computation for the difference between the corrected billing and the billing rendered for 26 December 1986 should be 92,031.55 [428,505.75 - 336,474.20 = 92,031.55]; for 26 January 1987,   94, 581.54 [428,808.38 - 334,226.84 = 94, 581.54]; and for 25 February 1987, 20,025.29 [422,751.89 - 402,726.60 = 20,025.29].

^[30] TSN, 21 November 1991, p. 13.

^[31] TSN, 21 May 1992, pp. 8-9.

^[32] Ibid., p. 9.

^[33] Sps. Francisco v. Court of Appeals, 449 Phil. 632 (2003).

^[34] See Article 2208 (5) of the Civil Code.