SECOND DIVISION
[G.R. No. 159411. March 18, 2005]
TEODORO I. CHAVEZ, petitioner, vs. HON.
COURT OF APPEALS and JACINTO S.
TRILLANA, respondents.
DECISION
PUNO, J.:
Assailed in this petition for review is the
Decision dated April 2, 2003[1] of the Court of
Appeals in CA-G.R. CV No. 59023[2] which
modified the Decision dated December 15,
1997 of the Regional Trial Court (RTC) of
Valenzuela City, Branch 172, in Civil Case No.
5139-V-97, as well as its Resolution dated
August 8, 2003[3] which denied petitioners
motion for reconsideration.
The antecedent facts are as follows:
In October 1994, petitioner Teodoro
Chavez and respondent Jacinto Trillana
entered into a contract of lease[4] whereby the
former leased to the latter his fishpond at Sitio
Pariahan, Taliptip, Bulacan, Bulacan, for a term
of six (6) years commencing from October 23,
1994 to October 23, 2000. The rental for the
whole term was two million two hundred forty
thousand (P2,240,000.00) pesos, of which one
million (P1,000,000.00) pesos was to be paid
upon signing of the contract. The balance was
payable as follows:
b. That, after six (6) months and/or, on or
before one (1) year from the date of signing
this contract, the amount of THREE
HUNDRED FORTY-FOUR THOUSAND
(P344,000.00) pesos shall be paid on April 23,
1995 and/or, on or before October 23, 1995
shall be paid by the LESSEE to the LESSOR.
c. That, the LESSEE, shall pay the amount of
FOUR HUNDRED FORTY-EIGHT
THOUSAND (P448,000.00) pesos x x x to the
LESSOR on April 23, 1997 and/or, on or before
October 23, 1997, and on April 23, 1998
and/or, on or before October 23, 1998 the
amount of FOUR HUNDRED FORTY-EIGHT
THOUSAND (P448,000.00) pesos x x x.
Paragraph 5 of the contract further provided
that respondent shall undertake all construction
and preservation of improvements in the
fishpond that may be destroyed during the
period of the lease, at his expense, without
reimbursement from petitioner.
In August 1996, a powerful typhoon hit the
country which damaged the subject fishpond.
Respondent did not immediately undertake the
necessary repairs as the water level was still
high. Three (3) weeks later, respondent was
informed by a barangay councilor that major
repairs were being undertaken in the fishpond
with the use of a crane. Respondent found out
that the repairs were at the instance of
petitioner who had grown impatient with his
delay in commencing the work.
In September 1996, respondent filed a
complaint before the Office of
the Barangay Captain of Taliptip, Bulacan,
Bulacan. He complained about the
unauthorized repairs undertaken by petitioner,
the ouster of his personnel from the leased
premises and its unlawful taking by petitioner
despite their valid and subsisting lease
contract. After conciliation proceedings, an
agreement was reached, viz.:
KASUNDUAN
Napagkasunduan ngayong araw na to ika-17
ng Setyembre ng nagpabuwis Teodoro Chavez
at bumubuwis na si G. Jay Trillana na ibabalik
ni G. Chavez ang halagang P150,000.00 kay
G. Trillana bilang sukli sa natitirang panahon
ng buwisan.
Ngunit kung maibibigay ni G. Chavez ang
halagang P100,000.00 bago sumapit o
pagsapit ng ika-23 ng Setyembre, taong
kasalukuyan, to ay nangangahulugan ng
buong kabayaran at hindi P150,000.00.
Kung sakali at hindi maibigay ang P100,000.00
ang magiging kabayaran ay
mananatiling P150,000.00 na may paraan ng
pagbabayad ng sumusunod:
Ang P50,000.00 ay ibibigay bago sumapit o
pagsapit ng ika-31 ng Oktubre 1996 at ang
balanseng P100,000.00 ay ibibigay sa loob ng
isang taon subalit magbibigay ng promissory
note si G. Chavez at kung mabubuwisang ang
kanyang palaisdaan ay ibibigay lahat ni G.
Chavez ang buong P150,000.00 sa lalong
madaling panahon.
Kung magkakaroon ng sapat at total na
kabayaran si G. Chavez kay G. Trillana ang
huli ay lalagda sa kasulatan bilang waiver o
walang anumang paghahabol sa nabanggit na
buwisan.
Alleging non-compliance by petitioner with
their lease contract and the
foregoing Kasunduan, respondent filed a
complaint on February 7, 1997 against
petitioner before the RTC of Valenzuela City,
docketed as Civil Case No. 5139-V-97.
Respondent prayed that the following amounts
be awarded him, viz.: (a) P300,000.00 as
reimbursement for rentals of the leased
premises corresponding to the unexpired
portion of the lease contract; (b) P500,000.00
as unrealized profits; (c) P200,000.00 as moral
damages; (d) P200,000.00 as exemplary
damages; and, (e) P100,000.00 as attorneys
fees plus P1,000.00 for each court appearance
of respondents counsel.
Petitioner filed his answer but failed to
submit the required pretrial brief and to attend
the pretrial conference. On October 21, 1997,
respondent was allowed to present his
evidence ex-parte before the Acting Branch
Clerk of Court.[5] On the basis thereof, a
decision was rendered on December 15,
1997[6] in favor of respondent, the dispositive
portion of which reads:
WHEREFORE, judgment is hereby rendered
as follows:
(1) Ordering the defendant to reimburse to the
plaintiff the sum of P300,000.00 representing
rental payment of the leased premises for the
unused period of lease;
(2) Ordering the defendant to pay plaintiff the
sum of P500,000.00 representing unrealized
profit as a result of the unlawful deprivation by
the defendant of the possession of the subject
premises;
(3) Ordering the defendant to pay plaintiff the
sum of P200,000.00 as moral damages;
(4) Ordering the defendant to pay plaintiff the
sum of P200,000.00 as exemplary damages;
and
(5) Ordering the defendant to pay plaintiff the
sum of P100,000.00 as and for attorneys fees,
plus costs of suit.
Petitioner appealed to the Court of Appeals
which modified the decision of the trial court by
deleting the award of P500,000.00 for
unrealized profits for lack of basis, and by
reducing the award for attorneys fees
to P50,000.00.[7] Petitioners motion for
reconsideration was denied. Hence, this
petition for review.
Petitioner contends that the Court of
Appeals erred in ruling that the RTC of
Valenzuela City had jurisdiction over the action
filed by respondent considering that the subject
matter thereof, his alleged violation of the lease
contract with respondent, was already
amicably settled before the Office of
the Barangay Captain of Taliptip, Bulacan,
Bulacan. Petitioner argued that respondent
should have followed the procedure for
enforcement of the amicable settlement as
provided for in the Revised Katarungang
Pambarangay Law. Assuming arguendo that
the RTC had jurisdiction, it cannot award more
than the amount stipulated in the Kasunduan
which is P150,000.00. In any event, no factual
or legal basis existed for the reimbursement of
alleged advance rentals for the unexpired
portion of the lease contract as well as for
moral and exemplary damages, and attorneys
fees.
Indeed, the Revised Katarungang
Pambarangay Law[8] provides that an
amicable settlement reached after barangay
conciliation proceedings has the force and
effect of a final judgment of a court if not
repudiated or a petition to nullify the same is
filed before the proper city or municipal court
within ten (10) days from its date.[9] It further
provides that the settlement may be enforced
by execution by the lupong tagapamayapa
within six (6) months from its date, or by action
in the appropriate city or municipal court, if
beyond the six-month period.[10] This special
provision follows the general precept
enunciated in Article 2037 of the Civil
Code, viz.:
A compromise has upon the parties the effect
and authority of res judicata; but there shall be
no execution except in compliance with a
judicial compromise.
Thus, we have held that a compromise
agreement which is not contrary to law, public
order, public policy, morals or good customs is
a valid contract which is the law between the
parties themselves.[11] It has upon them the
effect and authority of res judicata even if not
judicially approved,[12] and cannot be lightly set
aside or disturbed except for vices of consent
and forgery.[13]
However, in Heirs of Zari, et al. v.
Santos,[14] we clarified that the broad precept
enunciated in Art. 2037 is qualified by Art. 2041
of the same Code, which provides:
If one of the parties fails or refuses to abide by
the compromise, the other party may either
enforce the compromise or regard it as
rescinded and insist upon his original demand.
We explained, viz:
[B]efore the onset of the new Civil Code, there
was no right to rescind compromise
agreements. Where a party violated the terms
of a compromise agreement, the only recourse
open to the other party was to enforce the
terms thereof.
When the new Civil Code came into being, its
Article 2041 x x x created for the first time the
right of rescission. That provision gives to the
aggrieved party the right to either enforce the
compromise or regard it as rescinded and
insist upon his original demand. Article 2041
should obviously be deemed to qualify the
broad precept enunciated in Article 2037 that
[a] compromise has upon the parties the effect
and authority of res judicata. (underscoring
ours)
In exercising the second option under Art.
2041, the aggrieved party may, if he chooses,
bring the suit contemplated or involved in his
original demand, as if there had never been
any compromise agreement, without bringing
an action for rescission.[15] This is because he
may regard the compromise as already
rescinded[16] by the breach thereof of the other
party.
Thus, in Morales v. National Labor
Relations Commission[17] we upheld the
National Labor Relations Commission when it
heeded the original demand of four (4) workers
for reinstatement upon their employers failure
to comply with its obligation to pay their
monetary benefits within the period prescribed
under the amicable settlement. We reiterated
the rule that the aggrieved party may either (1)
enforce the compromise by a writ of execution,
or (2) regard it as rescinded and so insist upon
his original demand upon the other partys
failure or refusal to abide by the compromise.
We also recognized the options in Mabale v.
Apalisok,[18] Canonizado v.
Benitez,[19] and Ramnani v. Court of
Appeals,[20] to name a few cases.
In the case at bar, the Revised
Katarungang Pambarangay Law provides for
a two-tiered mode of enforcement of an
amicable settlement, to wit: (a) by execution by
the Punong Barangay which is quasi-judicial
and summary in nature on mere motion of the
party entitled thereto; and (b) an action in
regular form, which remedy is
judicial.[21] However, the mode of enforcement
does not rule out the right of rescission under
Art. 2041 of the Civil Code. The availability of
the right of rescission is apparent from the
wording of Sec. 417[22] itself which provides
that the amicable settlement may be enforced
by execution by the lupon within six (6) months
from its date or by action in the appropriate city
or municipal court, if beyond that period. The
use of the word may clearly makes the
procedure provided in the Revised
Katarungang Pambarangay Law
directory[23] or merely optional in nature.
Thus, although the Kasunduan executed
by petitioner and respondent before the Office
of the Barangay Captain had the force and
effect of a final judgment of a court, petitioners
non-compliance paved the way for the
application of Art. 2041 under which
respondent may either enforce the
compromise, following the procedure laid out in
the Revised Katarungang Pambarangay
Law, or regard it as rescinded and insist upon
his original demand. Respondent chose the
latter option when he instituted Civil Case No.
5139-V-97 for recovery of unrealized profits
and reimbursement of advance rentals, moral
and exemplary damages, and attorneys fees.
Respondent was not limited to
claiming P150,000.00 because although he
agreed to the amount in the Kasunduan, it is
axiomatic that a compromise settlement is not
an admission of liability but merely a
recognition that there is a dispute and an
impending litigation[24] which the parties hope
to prevent by making reciprocal concessions,
adjusting their respective positions in the hope
of gaining balanced by the danger of
losing.[25] Under the Kasunduan, respondent
was only required to execute a waiver of all
possible claims arising from the lease contract
if petitioner fully complies with his obligations
thereunder.[26] It is undisputed that herein
petitioner did not.
Having affirmed the RTCs jurisdiction over
the action filed by respondent, we now resolve
petitioners remaining contention. Petitioner
contends that no factual or legal basis exists
for the reimbursement of alleged advance
rentals, moral and exemplary damages, and
attorneys fees awarded by the court a quo and
the Court of Appeals.
The rule is that actual damages cannot be
presumed, but must be proved with a
reasonable degree of certainty.[27] In the case
at bar, we agree with petitioner that no
competent proof was presented to prove that
respondent had paid P300,000.00 as advance
rentals for the unexpired period of the lease
contract. On the contrary, the lease contract
itself provided that the remaining rentals
of P448,000.00 shall be paid on April 23, 1997
and/or, on or before October 23, 1997, and on
April 23, 1998 and/or, on or before October 23,
1998 the amount P448,000.00. Respondent
filed his complaint on February 7, 1997. No
receipt or other competent proof, aside from
respondents self-serving assertion, was
presented to prove that respondent paid the
rentals which were not yet due. No proof was
even presented by respondent to show that he
had already paid P1,000,000.00 upon signing
of the lease contract, as stipulated therein.
Petitioner, in paragraphs 2 and 7 of his
answer,[28] specifically denied that respondent
did so. Courts must base actual damages
suffered upon competent proof and on the best
obtainable evidence of the actual amount
thereof.[29]
As to moral damages, Art. 2220 of
the Civil Code provides that same may be
awarded in breaches of contract where the
defendant acted fraudulently or in bad faith. In
the case at bar, respondent alleged that
petitioner made unauthorized repairs in the
leased premises and ousted his personnel
therefrom despite their valid and subsisting
lease agreement. Petitioner alleged, by way of
defense, that he undertook the repairs because
respondent abandoned the leased premises
and left it in a state of disrepair. However,
petitioner presented no evidence to prove his
allegation, as he did not attend the pretrial
conference and was consequently declared in
default. What remains undisputed therefore is
that petitioner had a valid and subsisting lease
contract with respondent which he refused to
honor by giving back possession of the leased
premises to respondent. We therefore sustain
the conclusion of both the trial court and the
Court of Appeals that an award of moral
damages is justified under the circumstances.
We likewise sustain the award for exemplary
damages considering petitioners propensity not
to honor his contractual obligations, first under
the lease contract and second, under the
amicable settlement executed before the Office
of the Barangay Captain. Since respondent
was compelled to litigate and incur expenses to
protect his interest on account of petitioners
refusal to comply with his contractual
obligations,[30] the award of attorneys fees has
to be sustained.
IN VIEW WHEREOF, the petition is
PARTIALLY GRANTED. The assailed Decision
dated April 2, 2003 of the Court of Appeals in
CA-G.R. CV No. 59023 is modified by deleting
the award of P300,000.00 as reimbursement of
advance rentals. The assailed Decision is
AFFIRMED in all other respects.
SO ORDERED.
Austria-Martinez, Callejo, Sr.,
Tinga, and Chico-Nazario, JJ., concur.
William Golangco Construction Corporation
v. Ray Burton
Development Corporation, G.R. No. 163582,
August 9, 2010
Facts:
Ray Burton Development Corporation
(RBDC) and William Golangco Construction
Corporation (WGCC) entered into a Contract
for the construction of the Elizabeth Place
(Office/Residential Condominium).
WGCC filed a complaint with a request
for arbitration with the Construction Industry
Arbitration Commission (CIAC). In its
complaint, private respondent prayed that
CIAC render judgment ordering petitioner to
pay private respondent the amount of, to wit:
1. P24,703,132.44 for the unpaid
balance on the contract price;
2. P10,602,670.25 for the unpaid
balance on the labor cost
adjustment;
3. P9,264,503.70 for the unpaid
balance of additive works;
4. P2,865,615.10 for extended
overhead expenses;
 5. P1,395,364.01 for materials
cost adjustment and trade
contractors' utilities expenses;
6. P4,835,933.95 for interest
charges on unpaid overdue
billings on labor cost adjustment
and change orders.
or for a total of Fifty Three Million Six Hundred
Sixty-Seven Thousand Two Hundred Nineteen
and 45/xx (P53,667,219.45) and interest
charges based on the prevailing bank rates on
the foregoing amount from March 1, 2002 and
until such time as the same shall be fully paid.
RBDC filed a Motion to Dismiss the
aforesaid complaint on the ground of lack of
jurisdiction. It is petitioner's contention that the
CIAC acquires jurisdiction over disputes arising
from or connected with construction contracts
only when the parties to the contract agree to
submit the same to voluntary arbitration. In the
contract between petitioner and private
respondent, petitioner claimed that only
disputes by reason of differences in
interpretation of the contract documents shall
be deemed subject to arbitration.
Issue: whether or not CIAC has jurisdiction
over the case.
Held: CIAC had jurisdiction over the dispute
between herein parties
The CIAC has original and exclusive
jurisdiction over disputes arising from, or
connected with, contracts entered into by
parties involved in construction in the
Philippines and all that is needed for the CIAC
to acquire jurisdiction is for the parties to agree
to submit the same to voluntary arbitration.
Respondent's contention, that the only disputes
it agreed to submit to voluntary arbitration are
those arising from interpretation of contract
documents and it argued that the claims
alleged in petitioner's complaint are not
disputes arising from interpretation of contract
documents, hence, the CIAC cannot assume
jurisdiction over the case, is tenuous.
The contract between herein parties
contained an arbitration clause which mean
that parties agreed to submit disputes arising
by reason of differences in interpretation of the
contract to a Board of Arbitrators the
composition of which is mutually agreed upon
by the parties, and, as a last resort, any other
dispute which had not been resolved by the
Board of Arbitrators shall be submitted to the
Construction Arbitration Authority created by
the government, which is no other than the
CIAC. Moreover, other matters not dealt with
by provisions of the contract or by special
agreements shall be governed by provisions of
the Construction Industry Arbitration Law, or
Executive Order No. 1008.
Petitioner's claims that it is entitled to
payment for several items under their contract,
which claims are, in turn, refuted by
respondent, involves a "dispute arising from
differences in interpretation of the contract.
Under Section 1, Article III of the CIAC
Rules, an arbitration clause in a construction
contract shall be deemed as an agreement to
submit an existing or future controversy to
CIAC jurisdiction, "notwithstanding the
reference to a different arbitration institution or
arbitral body in such contract x x x."
Elementary is the rule that when laws or rules
are clear, it is incumbent on the court to apply
them. When the law (or rule) is unambiguous
and unequivocal, application, not interpretation
thereof, is imperative.
It bears to emphasize that the mere
existence of an arbitration clause in the
construction contract is considered by law as
an agreement by the parties to submit existing
or future controversies between them to CIAC
jurisdiction, without any qualification or
condition precedent. To affirm a condition
precedent in the construction contract, which
would effectively suspend the jurisdiction of the
CIAC until compliance therewith, would be in
conflict with the recognized intention of the law
and rules to automatically vest CIAC with
jurisdiction over a dispute should the
construction contract contain an arbitration
clause.
Moreover, the CIAC was created in
recognition of the contribution of the
construction industry to national development
goals. Realizing that delays in the resolution of
construction industry disputes would also hold
up the development of the country, Executive
Order No. 1008 expressly mandates the CIAC
to expeditiously settle construction industry
disputes and, for this purpose, vests in the
CIAC original and exclusive jurisdiction over
disputes arising from, or connected with,
contracts entered into by the parties involved in
construction in the Philippines.
Thus, there is no question that in this
case, the CIAC properly took cognizance of
petitioner's complaint as it had jurisdiction over
the same.
Philippine Supreme Court Decision:
Department of Foreign Affairs and Bangko
Sentral ng Pilipinas vs. Falcon and BCA
International Corporation; G.R. No. 176657;
September 1, 2010.
The Philippine Department of Foreign Affairs
(“DFA”) implemented its Machine
Readable Passport and Visa Project (the
“MRPV Project”) under the Build-Operate-
andTransfer (“BOT”) scheme. Pursuant to the
BOT Law, having found that BCA
International Corporation (“BCA”) submitted the
sole complying bid, direct negotiations
were commenced between DFA and BCA for
the MRPV Project. In compliance with the
Notice of Award and the BOT Law, BCA
incorporated a project company, the Philippine
Passport Corporation (“PPC”) to undertake and
implement the MRPV Project.
Consequently, on February 8, 2001 a Build-
Operate-Transfer Agreement (“BOT
Agreement”) was entered into by the DFA and
the PPC. Later, an Amended BOT
Agreement was entered into by the DFA and
BCA with the conformity of PPC. Then, an
Assignment Agreement was executed by BCA
and PPC, whereby BCA assigned and
ceded its rights, title, interest and benefits
arising from the Amended BOT Agreement to
PPC.
On December 9, 2005, the DFA sent a Notice
of Termination to BCA and PPC due to
their alleged failure to submit proof of financial
capability to complete the entire MRPV
Project in accordance with the financial
warranty under Section 5.02 (A) of the
Amended
BOT Agreement. On December 14, 2005, BCA
sent a letter to the DFA demanding that
it immediately reconsider and revoke its
previous notice of termination, otherwise, BCA
would be compelled to declare the DFA in
default pursuant to the Amended BOT
Agreement.
As the impasse remained unresolved, BCA
filed a Request for Arbitration dated April 7,
2006 with the Philippine Dispute Resolution
Center, Inc. (PDRCI), pursuant to Section
19.02 of the Amended BOT Agreement which
provides:
Section 19.02. Failure to Settle Amicably — If
the Dispute cannot be settled
amicably within ninety (90) days by mutual
discussion as contemplated under
Section 19.01 herein, the Dispute shall be
settled with finality by an arbitrage
tribunal operating under International Law,
hereinafter referred to as the
"Tribunal", under the UNCITRAL Arbitration
Rules contained in Resolution
31/98 adopted by the United Nations General
Assembly on December 15, 1976,
and entitled "Arbitration Rules on the United
Nations Commission on the
International Trade Law". The DFA and the
BCA undertake to abide by and
implement the arbitration award. The place of
arbitration shall be Pasay City,
Philippines, or such other place as may
mutually be agreed upon by both parties.
The arbitration proceeding shall be conducted
in the English language.
Thereafter, the DFA and the Bangko Sentral ng
Pilipinas (“BSP”) entered into a
Memorandum of Agreement for the latter to
provide the former passports compliant
with international standards. The BSP then
solicited bids for the supply, delivery,
installation and commissioning of a system for
the production of Electronic Passport
Booklets or e-Passports.
Thus, BCA filed a Petition for Interim Relief
under Section 28 of the Alternative Dispute
Resolution Act of 2004 (the “ADR Act of
2004”), with the Regional Trial Court of Pasig
City. In that petition, BCA prayed for, among
others, that the trial court grant interim
relief to BCA prior to the constitution of the
arbitral tribunal in the form an order
temporarily restraining the DFA and BSP and
their agents (i) from awarding a new
contract to implement the MRPV Project, or
any similar electronic passport or visa
project; or (ii) if such contract has been
awarded, from implementing such MRPV
Project
or similar projects until further orders from the
court.
On January 23, 2007, the trial court ordered
the issuance of a temporary restraining order
restraining the DFA and the BSP and their
agents from awarding a new contract to
implement the MVPV Project or any similar
electronic passport or visa project, or if such
contract has been awarded, from implementing
such or similar projects.
After hearing, the trial court issued an Order
granting BCA's application for preliminary
injunction. Hence, the DFA and the BSP filed a
Petition before the Supreme Court
assailing the order of the trial court and the
issuance of the writ of preliminary injunction.
The Supreme Court noted that under Section
28 of the ADR Act of 2004, the grant of an
interim measure of protection by the proper
court before the constitution of an arbitral
tribunal is allowed.
The Supreme Court also stated that the ADR
Act of 2004 is a general law applicable to all
matters and controversies to be resolved
through alternative dispute resolution methods.
This law allows a Regional Trial Court to grant
interim or provisional relief, including
preliminary injunction, to parties in an
arbitration case prior to the constitution of the
arbitral tribunal. This general statute, however,
must give way to a special law governing
national government projects, namely,
Republic Act No. 8975 which prohibits courts,
except the Supreme Court, from issuing a
temporary restraining order and/or a writ of
preliminary injunction in cases involving
national government projects.
However, the Supreme Court found that DFA
and BSP failed to prove that the MRPV
Project is a “national government project” as
defined in Republic Act No. 8975 and thus,
the trial court had jurisdiction to issue the
injunction. As to whether the issuance of the
injunction was proper, the Supreme Court,
after considering the arguments of the parties,
held that the issuance of the injunction by the
trial court was not warranted and
amounted to grave abuse of discretion.
The Supreme Court emphasized that its
decision touches only on the issues of (a) the
jurisdiction of the trial court to issue a writ of
preliminary injunction as an interim relief
under the factual milieu of this case; and (b)
the entitlement of BCA to injunctive relief.
The merits of the DFA and BCA's dispute
regarding the termination of the Amended
BOT Agreement must be threshed out in the
proper arbitration proceedings. The civil
case pending before the trial court is purely for
the grant of interim relief since the main
case is to be the subject of arbitration
proceedings.
The Supreme Court noted that during the
pendency of this case, the arbitration case was
dismissed by the PDRCI for lack of jurisdiction,
in view of the lack of agreement
between the parties to arbitrate before the
PDRCI. The Supreme Court held that in view
of intervening circumstances, BCA can no
longer be granted injunctive relief and the civil
case before the trial court should be
accordingly dismissed. However, this is without
prejudice to the parties resolving the main
controversy in arbitration proceedings, in
accordance with the provisions of the
Amended BOT Agreement, which should
proceed
with dispatch.
Republic of the Philippines
Supreme Court
Manila
SPECIAL THIRD DIVISION construction of the nursery shade
net area; plus interest at 6% per
annum to be computed from the
ELPIDIO S. UY, doing business G.R. Nos.
date 147925-26
of the filing of the complaint
under the name and style until finality of this Decision and
of EDISONDEVELOPMENT & CONSTRUCTION, Present:
12% per annum thereafter until
Petitioner, full payment. Respondent PEA is
CORONA, C.J.
further *
ordered to pay petitioner
VELASCO,
Uy 10% **
JR.,of the total award as
NACHURA,
attorneys fees.
- versus - Chairperson,
BRION,SO***and
ORDERED.[1]
PERALTA, JJ.
Uy seeks partial reconsideration of our
Decision.
Promulgated:
He argues that:
PUBLIC ESTATES AUTHORITY ,
Respondent. July 7,I 2010

x------------------------------------------------------------- x x x THE HONORABLE COURT

--------------------x ERRED IN THE COMPUTATION
OF THE DAMAGES DUE THE
RESOLUTION PETITIONER FOR THE
STANDBY EQUIPMENT COST.
NACHURA, J.:
II
Before us are (i) the Motion for Partial
Reconsideration filed by petitioner Elpidio S. x x x PETITIONER SHOULD BE
Uy (Uy), doing business under the name and REIMBURSED FOR COSTS
style of Edison Development & Construction INCURRED FOR ADDITIONAL
(EDC), and (ii) the Motion for Reconsideration HAULING DISTANCE OF
filed by respondent Public Estates Authority TOPSOIL ALSO BECAUSE THE
(PEA) of our June 8, 2009 Decision, the fallo of EVIDENCE ON RECORD
which reads: CONFIRMS THE EXISTENCE
OF RESPONDENT PEAS
WRITTEN CONSENT, AND THE
WHEREFORE, the petition FACT THAT IT IS
is PARTIALLY GRANTED. The INDESPENSABLE TO
assailed Joint Decision and Joint COMPLETING THE
Resolution of the Court of PROJECT. WITHOUT SUCH
Appeals in CA-G.R. SP Nos. ASSURANCE OF
59308 and 59849 REIMBURSEMENT,
are AFFIRMED with MODIFICAT PETITIONER WOULD NOT
IONS. Respondent Public HAVE TAKEN SUCH PRUDENT
Estates Authority is ordered to ACTION.
pay Elpidio S. Uy, doing business
under the name and style Edison III
Development and
Construction, P55,680,492.38 for x x x PETITIONER SHOULD BE
equipment rentals on ALLOWED TO RECOVER THE
standby; P2,275,721.00 for the COSTS HE INCURRED FOR
cost of idle manpower; THE MOBILIZATION OF WATER
and P6,050,165.05 for the TRUCKS ALSO BECAUSE
 RESPONDENT BREACHED ITS
OBLIGATIONS UNDER THE We will deal first with Uys motion.
CONTRACT.
Uy objects to the factor rate used in the
IV computation of the award for standby
equipment costs. He points out that the actual
WITH REGARD TO THE COURT number of equipment deployed and which
OF APPEALS ILLEGAL remained on standby, occasioned by the delay
INJUNCTION PREVENTING in delivery of work areas, has not been
PETITIONER FROM considered in the computation. The
RECOVERING HIS CLAIMS Association of Carriers and Equipment Lessors
AGAINST RESPONDENT PEA (ACEL) rate or the factor rate used was only
IN CIAC CASE NO. 03-2001, the total average rate, without regard to the
THIS SHOULD HAVE BEEN actual number of equipment deployed. He,
LIFTED SINCE IT INVOLVES therefore, insists that an increase in the award
CLAIMS SEPARATE AND is in order.
DISTINCT FROM THE
CASE A QUO. [2]
We find Uys argument on this point
meritorious; and this Court is swayed to modify
the formula used in the computation of the
PEA, on the other hand, assails the Decision award.
on the following grounds:

I. The Certification,[4] dated December 6,

1996, shows that EDC mobilized the following
THE FACTUAL FINDINGS AND equipment for the Heritage Park Project, viz.:
CONCLUSIONS OF THE
CONSTRUCTION INDUSTRY Description Number
ARBITRATION COMMISSION
(CIAC) INSOFAR AS THE Road Grader 2
ARBITRAL AWARD TO Pay Loader 2
PETITIONER IS CONCERNED, Dump Trucks 10
WHICH THE COURT OF Tractor with 2
APPEALS AND THE FIRST attachments
DIVISION OF THIS Backhoe 2
HONORABLE COURT Delivery Trucks 3
AFFIRMED, HAS LONG Rolo-tiller 0
BECOME FINAL AND Concrete Mixer 4
EXECUTORY. Bar Cutter 2
Welding Machine 2
II. Roller 1
Bulldozer 1
THE CIAC ARBITRAL AWARD Concrete Cutter 2
HAD ALREADY BEEN Plate Compactor 2
IMPLEMENTED UNDER WRIT Compressor/Jack 3
OF EXECUTION DATED 19 Hammer
SEPTEMBER 2000, WRIT OF Genset 5KVA 1
EXECUTION DATED 31 Electric drill/ Holesaw 4
AUGUST 2001 AND
SUPPLEMENTAL WRIT OF These equipment remained in the
EXECUTION DATED 10 APRIL project site on the days that EDC was waiting
2002.[3] for the turnover of additional work
areas.[5] Thus, we agree with Uy that the actual
number of equipment mobilized should be
included in computing the award for standby
equipment cost. The award must, therefore, be
modified using the following formula:
Actual period of delay (18.2
months) x average rate per ACEL
x number of equipment
However, we cannot simply accept in full Uys
claim that he is entitled to P71,009,557.95 as
standby equipment cost. The records show
that not all of the equipment were operational;
several were under repair.[6] Accordingly, we
find it necessary to remand the records of the
case to the Construction Industry Arbitration
Commission (CIAC), which decided the case in
the first instance, for the proper computation of
the award of standby equipment cost based on
the foregoing formula.
On the claim for costs for additional hauling
distance of topsoil and for mobilization of water
truck, we maintain our ruling that a written
approval of PEAs general manager was
indispensable before the claim for additional
cost can be granted. In this case, the additional
costs were incurred without the written
approval of PEA. The denial of Uys claims
was, therefore, appropriate.
We cannot sustain this claim that is
premised mainly on the principle of unjust
enrichment. We stress that the principle of
unjust enrichment cannot be validly invoked by
a party who, through his own act or omission,
took the risk of being denied payment for
additional costs by not giving the other party
prior notice of such costs and/or by not
securing their written consent thereto, as
required by law and their contract.[7]
Similarly, we find no cogent reason to lift
the injunction issued in CIAC Case No. 03-
2001. We are not persuaded by Uys argument
that the claims under CIAC Case No. 03-2001
are different from his claims in CIAC Case No.
02-2000. As we explained in our Decision,
there is only one cause of action running
through Uys undertakings the violation of his
alleged right under the Landscaping and
Construction Agreement. Therefore, the
landscaping agreement is indispensable in the
prosecution of his claims in both CIAC Cases
No. 02-2000 and No. 03-2001. We reiterate
that a party, either by varying the form or action
or by bringing forward in a second case
additional parties or arguments, cannot escape
the effects of res judicata when the facts
remain the same, at least where such new
parties or matter could have been impleaded or
pleaded in the prior action.
In fine, except for the claim for standby
equipment costs, this Court finds no cogent
reason to depart from our June 8, 2009
Decision.
We now go to PEAs motion.
PEA insists that our Decision in this
case transgresses the principle of res judicata.
It asserts that the propriety of Uys monetary
claims against PEA had already been
considered and passed upon by this Court in
G.R. Nos. 147933-34.
The argument is specious.
In G.R. Nos. 147933-34, this Court was
very explicit in its declaration that its Decision
was independent of, and without prejudice to,
the appeal filed by Uy, viz.:
However, in order not to
prejudice the deliberations of the
Courts Second Division in G.R.
Nos. 147925-26, it should be
stated that the findings made in
this case, especially as regards
the correctness of the findings of
the CIAC, are limited to the
arbitral awards granted to
respondent Elpidio S. Uy and to
the denial of the counterclaims of
petitioner Public Estates
Authority. Our decision in this
case does not affect the other
claims of respondent Uy which
were not granted by the CIAC in
its questioned decision, the
merits of which were not
 submitted to us for determination corporation organized under Philippine laws.
in the instant petition.[8] Private respondent RRN Incorporated
(hereinafter respondent) is likewise a domestic
corporation organized under Philippine laws.
Indubitably, this Courts Decision in G.R. Respondent filed a claim for arbitration against
Nos. 147933-34 will not bar the grant of petitioner before CIAC for recovery of unpaid
additional award to Uy. account which consists of unpaid portions of
the sub-contract, variations and unused
WHEREFORE, Uys Motion for Partial materials in the total sum of P5,275,184.17 and
Reconsideration is PARTLY GRANTED. PEAs legal interest in the amount of P442,014.73.
Motion for Reconsideration, on the other hand, Petitioner filed a counterclaim for overpayment
is DENIED with FINALITY. The assailed in the amount ofP2,512,997.96.
Decision dated June 8, 2009 The parties admitted several facts before the
is AFFIRMED with MODIFICATION as to the CIAC. It was shown that petitioner and
award of standby equipment cost. The case is respondent executed an Agreement and
hereby REMANDED to the Construction Conditions of Sub-contract (hereafter
Industry Arbitration Commission solely for the Agreement signed on June 11, 1996 and June
purpose of computing the exact amount of 14, 1996, respectively. Respondent signified its
standby equipment cost pursuant to the willingness to accept and perform for petitioner
formula herein specified. The CIAC in any of its projects, a part or the whole of the
is DIRECTED to compute the award and effect works more particularly described in Conditions
payment thereof within thirty (30) days from of Sub-Contract and other Sub-contract
receipt of the records of this case. documents.
On June 11, 2002, the parties executed a
No further pleadings will be entertained. "Supply of Manpower, Tools/Equipment,
Consumables for the Electrical Works-Power
SO ORDERED. and Equipment Supply, Bus Duct Installation"
for the Phillip Morris Greenfield Project
ANTONIO EDUARDO B. NACHURA (hereafter Project) covered by Purchase Order
Associate Justice Nos. 4501200300-000274 and 4501200300-
000275 amounting toP15,724,000.00
and P9,276,000.00 respectively, or a total
G.R. No. 172525 October 20, 2010 amount of P25,000,000.00. The parties also
SHINRYO (PHILIPPINES) COMPANY, agreed that respondent will perform variation
INC., Petitioner, orders in the Project. In connection with the
vs. Project, petitioner supplied manpower
RRN INCORPORATED,* Respondent. chargeable against respondent.
DECISION Respondent was not able to finish the entire
PERALTA, J.: works with petitioner due to financial
This resolves the Petition for Review difficulties. Petitioner paid respondent a total
on Certiorari under Rule 45 of the Rules of amount of P26,547,624.76. On June 25, 2005
Court, praying that the Decision1 of the Court of [should read 2003], respondent, through its
Appeals (CA) dated February 22, 2006, former counsel sent a letter to petitioner
affirming the Decision of the Construction demanding for the payment of its unpaid
Industry Arbitration Commission (CIAC), and balance amounting to P5,275,184.17.
the CA Resolution2 dated April 26, 2006, Petitioner claimed material back charges in the
denying herein petitioner's motion for amount of P4,063,633.43. On September 26,
reconsideration, be reversed and set aside. 2003, respondent only
The facts, as accurately narrated in the CA acknowledged P2,371,895.33 as material back
Decision, are as follows. charges. Thereafter, on October 16, 2003,
Petitioner Shinryo (Philippines) Company, Inc. respondent sent another letter to petitioner for
(hereinafter petitioner) is a domestic them to meet and settle their dispute.
On January 8, 2004, respondent sent another reckoned from June 25, 2003 up to the filing of
letter to petitioner regarding the cost of the case on October 11, 2004 and 12%
equipment rental and the use of scaffolding. of P3,728,960.54 from the finality of the
Thereafter, on August 12, 2004, petitioner sent judgment until fully paid and arbitration cost
a letter to respondent denying any unpaid of P104,333.82 representing claimant's share
account and the failure in their negotiations for of the arbitration cost which respondent should
amicable settlement. reimburse.
On September 3, 2004, respondent, through its SO ORDERED.]
new counsel, advised petitioner of their Petitioner accepts the ruling of the CIAC only in
intention to submit the matter to arbitration. Issue No. 1 and Sub-Issue No. 1.1 and in Issue
Thereafter, their dispute was submitted to No. 2 in so far as the amount of P440,000.00
arbitration. During the preliminary conference, awarded as back charges for the use of
the parties agreed in their Terms of Reference scaffoldings. x x x3
to resolve eight issues, to wit: On February 22, 2006, the CA promulgated the
1. What should be the basis in assailed Decision affirming the decision of the
evaluating the variation cost? CIAC. The CA upheld the CIAC ruling that
1.1 How much is the variation petitioner failed to adduce sufficient proof that
cost? the parties had an agreement regarding
2. Is the Respondent (petitioner in the charges for respondent's use of the manlift. As
instant case) justified in charging to the other charges for materials, the CA held
claimant (herein respondent) the that the evidence on record amply supports the
equipment rental fee and for the use of CIAC findings. Petitioner moved for
the scaffoldings? If so, how much reconsideration of said ruling, but the same
should be charged to Claimant? was denied per Resolution dated April 26,
3. What should be the basis in 2006.
evaluating the total cost of materials Hence, this petition where it is alleged that:
supplied by Respondent to the Project I. THE HONORABLE COURT OF APPEALS
which is chargeable to Claimant? COMMITTED GRAVE REVERSIBLE ERROR
3.1 How much is the total cost of WHEN IT DENIED PETITIONER'S CLAIM
materials supply chargeable to FOR MANLIFT EQUIPMENT RENTAL IN THE
Claimant? AMOUNT OFP511,000.00 DESPITE
4. How much is the value of the EVIDENCE ON RECORD THAT
remaining works left undone by the RESPONDENT RRN ACTUALLY USED AND
Claimant in the project? BENEFITED FROM THE MANLIFT
5. Is the Claimant's claim for inventory of EQUIPMENT.
excess materials valid? If so, how much II. IN RENDERING THE QUESTIONED
is the value thereof? DECISION AND QUESTIONED
6. Is the Respondent entitled to its claim RESOLUTION, THE HONORABLE COURT
for an overpayment in the amount OF APPEALS HAS DECIDED A QUESTION
of P2,512,997.96? OF SUBSTANCE NOT IN ACCORD WITH
7. Is Claimant entitled to its claim for LAW AND/OR WITH THE APPLICABLE
interest? If so, how much? DECISIONS OF THE HONORABLE
8. Who between the parties shall bear SUPREME COURT.
the cost of Arbitration? III. THE COURT OF APPEALS COMMITTED
The CIAC rendered the assailed decision after A GRAVE REVERSIBLE ERROR IN
the presentation of the parties' evidence. [The AFFIRMING THE CIAC AWARD FOR THE
dispositive portion of said decision reads as VALUE OF INVENTORIED MATERIALS
follows: CONSIDERING THAT:
WHEREFORE, judgment is hereby rendered in A. RESPONDENT RRN
favor of the claimant and respondent is ordered ADMITTED THE VALIDITY OF
to pay claimant its unpaid account in the sum THE DEDUCTIONS ON
of P3,728,960.54 plus legal interest of 6% ACCOUNT OF MATERIAL
 SUPPLY, WHICH INCLUDED INTERESTS AND ARBITRATION COSTS IN
THE INVENTORIED FAVOR OF RESPONDENT RRN.4
MATERIALS. The petition is bereft of merit.
B. RESPONDENT RRN HAS NO Despite petitioner's attempts to make it appear
BASIS TO CLAIM BECAUSE that it is advancing questions of law, it is quite
ENGR. BONIFACIO ADMITTED clear that what petitioner seeks is for this Court
THAT RESPONDENT RRN to recalibrate the evidence it has presented
FAILED TO ESTABLISH before the CIAC. It insists that its evidence
WHETHER THE MATERIALS sufficiently proves that it is entitled to payment
CAME FROM RESPONDENT for respondent's use of its manlift equipment,
RRN OR FROM PETITIONER and even absent proof of the supposed
AND THAT IT WAS agreement on the charges petitioner may
PETITIONER THAT ACTUALLY impose on respondent for the use of said
INSTALLED THE SAID equipment, respondent should be made to pay
MATERIALS AS PART OF based on the principle of unjust enrichment.
REMAINING WORKS THAT Petitioner also questions the amounts awarded
PETITIONER TOOK OVER by the CIAC for inventoried materials, and
FROM RESPONDENT RRN. costs incurred by petitioner for completing the
C. THE CLAIM FOR THE VALUE work left unfinished by respondent.
OF INVENTORIED MATERIALS As reiterated by the Court in IBEX
IS A DOUBLE CLAIM OR International, Inc. v. Government Service
DOUBLE ENTRY BECAUSE IN Insurance System,5 to wit:
THE COMPUTATION OF THE It is settled that findings of fact of quasi-
FINAL ACCOUNT, judicial bodies, which have acquired
RESPONDENT RRN WAS expertise because their jurisdiction is
CREDITED THE FULL confined to specific matters, are generally
CONTRACT PRICE AND THE accorded not only respect, but also finality,
COST OF VARIATIONS, WHICH especially when affirmed by the Court of
INCLUDED THE INVENTORIED Appeals. In particular, factual findings of
MATERIALS. construction arbitrators are final and
IV. IN RENDERING THE QUESTIONED conclusive and not reviewable by this Court
DECISION AND QUESTIONED on appeal.
RESOLUTION, THE COURT OF APPEALS This rule, however, admits of certain
COMMITTED A GRAVE REVERSIBLE exceptions. In Uniwide Sales Realty and
ERROR IN THAT IT COMPLETELY Resources Corporation v. Titan-Ikeda
DISREGARDED THE PROVISION OF THE Construction and Development Corporation,
SUBCONTRACT, WHICH ALLOWED we said:
PAYMENT OF ACTUAL COST INCURRED BY In David v. Construction Industry and
PETITIONER IN COMPLETING THE Arbitration Commission, we ruled that, as
REMAINING WORKS THAT PRIVATE exceptions, factual findings of construction
RESPONDENT ADMITTEDLY FAILED TO arbitrators may be reviewed by this Court when
COMPLETE. the petitioner proves affirmatively that: (1) the
V. THE COURT OF APPEALS COMMITTED A award was procured by corruption, fraud or
GRAVE REVERSIBLE ERROR WHEN IT other undue means; (2) there was evident
COMPLETELY DISREGARDED THE partiality or corruption of the arbitrators or any
EVIDENCE ON ACTUAL COST INCURRED of them; (3) the arbitrators were guilty of
BY PETITIONER IN COMPLETING THE misconduct in refusing to hear evidence
REMAINING WORKS. pertinent and material to the controversy; (4)
VI. THE COURT OF APPEALS COMMITTED one or more of the arbitrators were disqualified
GRAVE REVERSIBLE ERROR WHEN IT to act as such under Section nine of Republic
AFFIRMED THE CIAC AWARD FOR Act No. 876 and willfully refrained from
disclosing such disqualifications or of any other
misbehavior by which the rights of any party
have been materially prejudiced; or (5) the
arbitrators exceeded their powers, or so
imperfectly executed them, that a mutual, final
and definite award upon the subject matter
submitted to them was not made.1avvp++i1
Other recognized exceptions are as follows: (1)
when there is a very clear showing of grave
abuse of discretion resulting in lack or loss of
jurisdiction as when a party was deprived of a
fair opportunity to present its position before
the Arbitral Tribunal or when an award is
obtained through fraud or the corruption of
arbitrators, (2) when the findings of the Court of
Appeals are contrary to those of the CIAC, and
(3) when a party is deprived of administrative
due process.6
A perusal of the records would reveal that none
of the aforementioned circumstances, which
would justify exemption of this case from the
general rule, are present here. Such being the
case, the Court, not being a trier of facts, is not
duty-bound to examine, appraise and analyze
anew the evidence presented before the
arbitration body.7
Petitioner's reliance on the principle of unjust
enrichment is likewise misplaced. The ruling of
the Court in University of the Philippines v.
Philab Industries, Inc.8 is highly instructive,
thus:
Unjust enrichment claims do not lie simply
because one party benefits from the efforts or
obligations of others, but instead it must be
shown that a party was unjustly enriched in the
sense that the term unjustly could mean
illegally or unlawfully.
Moreover, to substantiate a claim for unjust
enrichment, the claimant must unequivocally
prove that another party knowingly received
something of value to which he was not entitled
and that the state of affairs are such that it
would be unjust for the person to keep the
benefit. Unjust enrichment is a term used to
depict result or effect of failure to make
remuneration of or for property or benefits
received under circumstances that give rise to
legal or equitable obligation to account for
them; to be entitled to remuneration, one must
confer benefit by mistake, fraud, coercion, or
request. Unjust enrichment is not itself a theory
of reconvey. Rather, it is a prerequisite for the
enforcement of the doctrine of restitution.
Article 22 of the New Civil Code reads:
Every person who, through an act of
performance by another, or any other means,
acquires or comes into possession of
something at the expense of the latter without
just or legal ground, shall return the same to
him.
In order that accion in rem verso may prosper,
the essential elements must be present: (1)
that the defendant has been enriched, (2) that
the plaintiff has suffered a loss, (3) that the
enrichment of the defendant is without just or
legal ground, and (4) that the plaintiff has no
other action based on contract, quasi-contract,
crime or quasi-delict.
An accion in rem verso is considered merely
an auxiliary action, available only when there is
no other remedy on contract, quasi-contract,
crime, and quasi-delict. If there is an obtainable
action under any other institution of positive
law, that action must be resorted to, and the
principle of accion in rem verso will not lie.9
As found by both the CIAC and affirmed by the
CA, petitioner failed to prove that respondent's
free use of the manlift was without legal ground
based on the provisions of their contract. Thus,
the third requisite, i.e., that the enrichment of
respondent is without just or legal ground, is
missing. In addition, petitioner's claim is based
on contract, hence, the fourth requisite − that
the plaintiff has no other action based on
contract, quasi-contract, crime or quasi-delict −
is also absent. Clearly, the principle of unjust
enrichment is not applicable in this case.
The other issues raised by petitioner all boil
down to whether the CIAC or the CA erred in
rejecting its claims for costs of some materials.
Again, these issues are purely factual and
cannot be properly addressed in this petition
for review on certiorari. InHanjin Heavy
Industries and Construction Co., Ltd. v.
Dynamic Planners and Construction Corp.,10 it
was emphasized that mathematical
computations, the propriety of arbitral awards,
claims for "other costs" and "abandonment" are
factual questions. Since the discussions of the
CIAC and the CA in their respective Decisions
show that its factual findings are supported by
substantial evidence, there is no reason why
this Court should not accord finality to said
findings. Verily, to accede to petitioner's
request for a recalibration of its evidence,
which had been thoroughly studied by both the
CIAC and the CA would result in negating the
objective of Executive Order No. 1008, which
created an arbitration body to ensure the
prompt and efficient settlement of disputes in
the construction industry. Thus, the Court held
in Uniwide Sales Realty and Resources
Corporation v. Titan-Ikeda Construction and
Development Corporation,11 that:
x x x The Court will not review the factual
findings of an arbitral tribunal upon the artful
allegation that such body had
"misapprehended facts" and will not pass upon
issues which are, at bottom, issues of fact, no
matter how cleverly disguised they might be as
"legal questions." The parties here had
recourse to arbitration and chose the
arbitrators themselves; they must have had
confidence in such arbitrators. The Court will
not, therefore, permit the parties to relitigate
before it the issues of facts previously
presented and argued before the Arbitral
Tribunal, save only where a clear showing is
made that, in reaching its factual conclusions,
the Arbitral Tribunal committed an error so
egregious and hurtful to one party as to
constitute a grave abuse of discretion resulting
in lack or loss of jurisdiction.12
As discussed above, there is nothing in the
records that point to any grave abuse of
discretion committed by the CIAC.
The awards for interests and arbitration costs
are, likewise, correct as they are in keeping
with prevailing jurisprudence.13
IN VIEW OF THE FOREGOING, the Petition
is DENIED. The Decision of the Court of
Appeals dated February 22, 2006 and its
Resolution dated April 26, 2006
are AFFIRMED.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice