Donald Catto, it works now. I added
IP0 &= 0xFD;
IP0H &= 0xFD;
IP0 |= 0x02; // to set timer 0 isr priority to 1

to the beginning of the c_counter();. I tried it a couple times and worked. Now is displaying the info every n seconds after ext. int. 1 is triggered. I still do not understand why did I need these 3 steps, when Timer 0's int. priority level is 1, but it is working now. Thanks for taking time in helping me.

J.C.