Naga Telephone Co. v. CA

G.R. No. 107112, 24 February 1994


FACTS:

NATELCO entered into contract with CASURECO II for the use in operation of its telephone service, electric light posts of CASURECO II and in return, there will be free use of 10 telephone connections as long as NATELCO needs electric light posts. The period would last for as long as NATELCO needs electric light posts. In other words, the contract will terminate when they are forced to stop, abandon operation and remove light posts. After 10 years, CASURECO filed for reformation of contract with damages, for petitioner’s failure to conform to the guidelines of National Electrification Administration of reasonable compensation for use of posts. Compensation is worth P10, but the consumption of telephone cables costs P2,630. NATELCO, who used 319, without the contract of P10 each, refused to pay. Moreover, respondent alleged poor servicing. All in all, an amount of not less than P100,000 is claimed as damages.

ISSUE:

Can there be reformation of contract?

RULING:

No. However, the allegations in private respondent’s complaint and the evidence it has presented sufficiently made out a cause of action under Article 1267. The Court, therefore, released the parties from their correlative obligations under the contract. However, the Court has to take into account the possible consequences of such condition—disruption of electric services to the public and prejudice to business of petitoners.

Art. 1267. When the service has become so difficult as to be manifestly beyond the contemplation of the parties, the obligor may also be released therefrom, in whole or in part.

* Case digest by Cherry Mae Aguilla-Grana, LLB-1, Andres Bonifacio Law School, SY 2017-2018

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