SPOUSES WILLIAM AND G.R. No. 167767
JEANETTE
Petitioners, Present:
Panganiban, C.J. (Chairperson),
- versus - Ynares-Santiago,
Austria-Martinez,
Callejo, Sr., and
Chico-Nazario, JJ.
CARLOMAGNO B.
MATELA,
Respondent.
x
---------------------------------------------------- x
CARLOMAGNO B. MATELA, G.R. No. 167799
Petitioner,
- versus -
SPOUSES WILLIAM AND Promulgated:
JEANETTE
Respondents. August 29, 2006
x
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x
YNARES-SANTIAGO, J.:
These
consolidated petitions for review assail the Decision[1] of
the Court of Appeals dated
In
G.R. No. 167767, spouses William and Jeanette Yao pray that the assailed
decision and resolution of the Court of Appeals be reversed and set aside and
that the original complaint filed by Carlomagno B. Matela in the lower court be
dismissed for lack of merit.
In
G.R. No. 167799, Matela prays that the judgment of the Court of Appeals be
modified by ordering the spouses
The
antecedent facts are as follows:
On
The
construction started in the first week of April 1997 and was completed in April
1998, with additional works costing P300,000.00. Matela alleged that the spouses
In
their answer, the spouses
On
WHEREFORE,
judgment is rendered in favor of [Matela] and against the [spouses
SO
ORDERED.[7]
The
trial court anchored its decision on the following findings of facts:
Defendant
spouses engaged the professional services of the plaintiff on
Close
scrutiny of the evidence reveals that contrary to the allegation of the
defendant spouses the construction of the two unit townhouses x x x were
completed by the plaintiff. This is shown by the fact that the Building
Official of Makati City, after inspection of the construction thereof, issued,
the Evaluation Sheet Occupancy Permit (Exhs. “E” and “E-1”), Certificate of
Completion (Exh. “F”), Certificate of Occupancy (Exh. “G”) and Progress Flow
Sheet of Occupancy Permit (Exh. “G-1”).
It
appears from these documents that the construction was completed on
If
there (sic) defects were found all over the two unit townhouses, the Building
Official of Makati City would not have issued the said documents, which are
presumed to have been executed in due course and good faith.[8]
The
Court of Appeals affirmed the decision of the lower court but modified the
amount of actual damages to P391,582.00.
The dispositive portion of the decision reads:
WHEREFORE,
premises considered, the decision of the
Regional Trial Court of Las Piñas City, Branch 275, in Civil Case No.
98-0263 is hereby MODIFIED in that the [spouses Yao] are hereby ordered to pay
actual damages of Three Hundred Ninety One Thousand Five Hundred Eighty Two
Pesos (P 391,582.00). The decision of the
SO
ORDERED.[9]
In
affirming the findings of the court a quo, the Court of Appeals declared that:
As
to the second assigned error, defendants-appellants claimed that
plaintiff-appellee failed to finish the project within the agreed one hundred
eighty (180) days. They pointed out that one hundred eighty (180) days from
April 1997 ended on October 1997, however, the units were turned over only in
April 1998.
The
Court does not find any merit in this argument either. Any delay in the
delivery is cured by acceptance of the thing after delay incurred. (See: Tayong v. CA, 219 SCRA
480, [1993]). In the present case,
defendants-appellants do not deny they took over the townhouse units and have
even sold the same. (See: Records, p. 363)[10]
Hence
these consolidated petitions.
In
G.R. No. 167799, Matela raised the lone issue of:
WHETHER OR NOT [MATELA] IS ENTITLED TO THE ADDITIONAL
CONSTRUCTION COST.[11]
In
G.R. No. 167767, the issue raised by the spouses
WHETHER OR NOT THE DECISION OF THE COURT OF APPEALS IN
NOT DISMISSING THE COMPLAINT [OF MATELA] AND NOT AWARDING THE COUNTER CLAIM [OF
THE SPOUSES
Matela
claims that although the spouses
On
the other hand, the spouses
The
resolution of the issues raised by the parties require a re-examination of the pieces
of evidence presented during the trial of the case. This is an exception to the established rule
that in the exercise of our power of review, we only resolve questions of law
and not questions of facts.
The
rule that the Supreme Court does not resolve questions of facts, however, is
not absolute. Jurisprudence has
recognized several exceptions in which factual issues may be resolved by the
Supreme Court, such as: (1) when the findings are grounded entirely on
speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible;
(3) when there is grave abuse of discretion; (4) when the judgment is based on
a misapprehension of facts; (5) when the findings of facts are conflicting; (6)
when in making its findings the Court of
Appeals went beyond the issues of the case, or its findings are contrary to the
admissions of both the appellant and the appellee; (7) when the findings are
contrary to the trial court; (8) when the findings are conclusions without
citation of specific evidence on which
they are based; (9) when the facts set forth in the petition as well as in the
petitioner’s main and reply briefs are not disputed by the respondent; (10)
when the findings of fact are premised on the supposed absence of evidence and
contradicted by the evidence on record; or (11) when the Court of Appeals
manifestly overlooked certain relevant facts not disputed by the parties, which,
if properly considered, would justify a different conclusion.[14]
In the instant case, we find that the factual findings of the trial court and Court of Appeals are contradicted by the evidence on record. Thus, a review of the facts is in order.
As
agreed by the parties, Matela will construct the townhouses in accordance with
the Specification[15] while
spouses
In
his book on Obligations and Contracts, the late Court of Appeals Justice
Desiderio Jurado made the following discussion on reciprocal obligations:
Reciprocal
obligations are those which are created or established at the same time, out of
the same cause, and which result in mutual relationships of creditor and debtor
between the parties. These obligations are conditional in the sense that the
fulfillment of an obligation by one party depends upon the fulfillment of the
obligation by the other. Thus, in a contract of sale of an automobile for
P54,000. The vendor is obliged to deliver the automobile to the vendee, while
the vendee is obliged to pay the price of P54,000 to the vendor. It is clear that the vendor will not deliver
the automobile to the vendee unless the latter pay the price, while the vendee
will not pay the price to the vendor unless the latter will deliver the
automobile. Hence, in reciprocal obligations, the general rule is that fulfillment
by both parties should be simultaneous or at the same time.
The
rule then is that in reciprocal obligations, one party incurs in delay from the
moment the other party fulfills his obligation, while he himself does not
comply or is not ready to comply in a proper manner with what is incumbent upon
him. If neither party complies or is ready to comply with what is incumbent
upon him, the default of one compensates for the default of the other. In such
case, there can be no legal delay. These
rules may be illustrated by the following example: A sold his automobile to B
for P30,000. They agreed that delivery and payment shall be made on
Both
the trial court and the Court of Appeals found that Matela’s “delivery”
of the project constitutes a faithful discharge of his duties. We find otherwise. Our evaluation of the records reveal that
Matela failed to comply with his obligation to construct the townhouses based
on the agreed specifications. As such,
he cannot be discharged from his obligations by mere delivery of the same to
the spouses
The
Specification contained the following provisions:
D. CARPENTRY
WORKS
Lumber – This shall be of approved quality, well-seasoned,
thoroughly dry, free from large, loose and unsound knots, saps, shakes and
other imperfections impairing its durability, strength and appearance.
All roof trusses shall be of Apitong, conventional
fabrication using wooden plates and machine bolts.
Purlins shall be 2x3 (commercial size) apitong or
equivalent spaced at 0.60 m. o.c.[17]
x x x x
All wooden partitions indicated in the drawing shall
be double faced ¼” thk. ordinary plywood nailed to 2x3 (commercial size)
tanguile spaced at 0.60 m. o.c. bothways (wherever available).
The ceiling shall be of 3/16” thk plywood (class C)
with 2x2 ceiling joist spaced at 0.60 m. o.c.
Door jambs shall be of standard type from 2/5 K.D.
tanguile or equivalent.[18]
Contrary
to the foregoing, the photographs offered by the spouses
Paragraph
I, Electrical Works of the Specification contained the following
undertaking:
The Contractor shall furnish all materials, (or
otherwise specified) labor and other services and perform all operations
necessary for the complete installation of the Electrical System for the
Project in accordance with the drawings and specifications. All electrical work
shall be done under the direct supervision of a licensed Electrical Engineer.
The Electrical Contractor shall secure the required Electrical Wiring Permit
and Certificate of Electrical Inspection and pay the corresponding permit fees.
All wiring in ceiling and double walls shall be Neltex Schedule 40 uPVC
conduits or equivalent. All installation on concrete shall be in rigid conduit
pipes.[20]
Furnishing and installation of conduits, boxes, wire
gutters, fittings, cabinets, wireways, manholes and covers, supports and
accessories for:
a. Lighting
system
b. Convenience
Outlets and other Special Purpose Outlets
c. Sub-Feeders/Homeruns
from Lighting Panels to Lighting Circuits as indicated on the plans
d. Feeders
to all Lighting Panels as indicated on plans.
e. Main
Distribution Panel (MDP)
f. Service
Entrance from source of Power to MDP
g. Necessary
Concrete Pedestals
h. Telephone
System
i. Intercom
System
Again,
based on the photographs presented as evidence, we find that there were
unfinished electrical conduits, electrical outlets with loose wirings and
outlets with exposed wires.[21]
The
Specification also provided for several kinds of tiles to be installed on the
floors[22]
and on the walls.[23] However, the exhibits showed decaying and
unfinished cabinet floors,[24]
stairways and bathroom floors with missing tiles,[25]
uninstalled bathroom fixtures and exposed plumbing fixtures.[26] The bath tub was uninstalled that it can be
easily pulled out of its concrete receptacle.[27] The exhibits also showed unfinished windows,[28]
unpainted walls,[29] rusted
metalworks and balusters.[30]
During
the trial of the case before the court a quo on
Atty. De Asa, Sr.:
Now,
you have read Exhibit “H” and Exhibit “3”, I supposed and you understood its
contents, isn’t it?
Jeanette Yao:
Yes
sir.
Q: Now, on
page 2 of Exhibit “3” also Exhibit “H” refers to a paragraph which states to
carpentry works, which was bracketed and marked by this representation as
Exhibit “3-B”. And this refers to the
carpentry works. What happened to this condition as contained in the second
page of said Exhibit “H” and Exhibit “3” marked as Exhibit “3-B”?
A: Sir,
this was not followed.
Q: What do
you mean it was not followed?
A: I
found out during the construction that the wood has termites and some are not
properly installed.
Q: Going
further to this Exhibit “H” and Exhibit “3”.
Found page 3 thereon again bracketed as Exhibit “3-C” by this
representation and I will quote all
wooden partition indicated in the drawing shall be double face ¼ inches thick ordindary
plywood, made two by three (commercial size) tangile space at 0.60 m.o.c both
ways (where ever available). Similarly the ceilings shall be of three by sixteen inches thick plywood (-c) with two
by two ceilings joys space 0.60 m.o.c. Likewise, door jams shall be of standard size from two feet K.D. tangile.
Again was, Mrs. Witness, was this conditions as contained in the specification
followed?
A: Not
followed sir.
Q: Why do
you say that it was not followed?
A: Because
I found out that all the bathrooms were no cabinet. That was supposed to have. And when I opened
the ceilings, I found out that there are corrugated, GI corrugated inside still
attached in the ceiling and a lot of termite also on the door jams.
Atty. De Asa, Sr.:
So,
further going to Exhibit “3” and Exhibit “H” is specification under paragraph G
denominated specialties, finished hard wares
and I will quote unless otherwise
specified all hard wares shall be of chromium plated finished. The contractor shall also provide
and fit in place other hard wares nor herein executed and mentioned but
nevertheless necessary to complete the work. For the record, Your Honor, this
was bracketed and marked as defendant Exhibit “3-B”.
Was
this followed?
A: This
was not followed sir.
Q: Again
why do you say that it was not followed?
A: I
found out in the Unit B, Master Bed Room, that there were no showers. There
were no faucet. And in the kitchen, there were no wire basket or accessory. In
the, all the cabinet, there were no chrome plate or aluminum tube for the
hanger of the clothes. All of these were not there.
Atty. De Asa, Sr.:
Now, again on the next page, fourth page, there is
here encircled the words nelpex scheduled 40 UPDC conduits or equivalent, which
again for purposes of record, Your Honor, please this was marked as Exhibit
“3-F” for the defendant.
Would
you kindly explain whether or not this particular encircled words followed us
specified.
A: They
did not followed this, they used the another like the hose orange color not the
pipe.
Q: Not the
pipe, and the, finally, on the last page of this Exhibit, we refer to the modular kitchen by Danielle (door
panel only) this was encircled also Your Honor please and marked as Exhibit “3”
was this followed by the plaintiff Matela in the construction of the townhouse?
A: No sir
they used ordinary wood, plywood, not the panel door by Danielle.
Q: Now,
summing up this Exhibit “3-B” on carpentry, on carpentry works which were not
followed “3-C”, “3-D”, “3-F”, and “3-E”, if you will translate them into figure
or in money, how much would they cost?
A: Around
Five Hundred Thousand.
Q: Five
Hundred Thousand, now, you mentioned all of these defects and matters which
were not followed thru it specification was contained in Exhibit “H” and
Exhibit “E”. What other documents if any do you have to prove that indeed these
defects existed?
A: I took
photos, sir.
Q: Photographs,
if those photographs will be shown to you, will you be able to recognize them?
A: Yes,
sir.
Q: Now,
during the pre-trial conference, Mrs. Witness, Atty. Margaret Chua marked in
evidence several photographs from Exhibit “5”, “5-A”, up to “5-QQQ”. Would you
go over the same and tell this Honorable Court, what relation has those with the
photograph according to you, you took to prove that you indeed the
specifications as contained in Exhibit “H” and Exhibit “3” as well as the
defects in the constructed townhouses were not followed or appears?
A: I will
show you one by one, this one.
Q: These
are the pictures.
A: Yes.
Court:
Already
marked?
Atty. De Asa, Sr.:
Yes, Your Honor, as exhibit.
Q: Now,
aside from these pictures Mrs. Witness I have here other pictures referring to
Unit A and Unit B of.
Atty. De Asa, Sr.:
I’m
sorry, I will withdraw that, Your Honor.
Q: Go over
now, each and every picture and explain before this Honorable Court, what
specifications were not followed and for what were the defects you found in the
constructed townhouses.
A: The
concrete moldings that they installed the electrical were not repaired.
Court Interpreter:
Witness is referring to Exhibit “5-A”.
A: And
then, the next there is no doorbell for Unit B.
Court Interpreter:
Witness is referring to Exhibit “5-B”.
A: And
then, 5-C, and D, there is no electrical switch or outlet, no lights.
Atty. De Asa, Sr.:
No lights referring to:
Court Interpreter:
“5-E”.
A: The
ceilings there is no electrical, and the ceilings were open and “5-F”, this is
the Attic there is no air-con outlet. “5-G”, the wall no electrical switch.
Also “5-H”, no switched, no outlet.
Court Interpreter:
Same as Exhibit “5-I”, “5-K” and “5-J”.
A: “5-L”,
there are wires, live wires found in the circuit breaker and leave it open.
Atty. De Asa, Sr.:
Next.
A: “5-M”,
we installed the cover since it is very dangerous because there are live wires.
And letter M, there was.
Atty. De Asa, Sr.:
“5-N”.
A: Yeah,
“5-N”, the water flows in the circuit breaker so, it cause like a fire crackers
during the rainy days.
Q: How
about Exhibit “5-O”?
A: “5-O”,
as you can see there are also no outlet. “5-P”, no electrical wire, outlet or
switch but there is a junction box.
Q: “5-Q”?
A: There are
also junction box, but no wire and no switch covered.
Q: “5-R”?
A: “5-R”,
as you can see the ceiling there are GI corrugated, they used this in the
flooring and the water flows in here from second floor because there are water
leaks. The same with this.
Court Interpreter:
“5-S”.
Atty. De Asa, Sr.:
“5-S”.
A: The
same.
Atty. De Asa, Sr.:
The same “5-T”?
A: They
used two inches PVC pipe for the down-spout. It should be three inches as I
have seen in the blue print. “5-U”, as you can see this is also number two
inches pipe.
Court Interpreter:
Witness is referring to the two inches pipe.
A: “5-V”,
the same with “5-U” and “5-W”, the pipe is so small.
Atty. De Asa, Sr.:
Anyway, these pictures from Exhibit “5”, “5-A” up to
“5-QQQ” were all the pictures, which you have taken to establish that the
specifications were not followed and that there were defects in the townhouses
constructed by Matela?
A: Yes,
sir.
Q: Now,
was these townhouses completed by plaintiff?
A: No.
Q: Why do
you say no?
A: Since
I took photo, he did not follow what we have agreed in the specification.[31]
We cannot rely on the Building Permit,[32] Certificate of Completion[33] and Certificate of Occupancy[34] to prove the project’s completion. While it is true that under the Rules of Court, the issuance of the foregoing documents enjoy the presumption of regularity, however, it is only a disputable presumption, which may be overcome by other evidence.
The
agreed construction cost of the project was P5,090,560.00, however, the amounts
reflected in the Building Permit, the Certificate of Completion and the
Certificate of Occupancy are far less. In
the Building Permit, the total cost was pegged at P2,191,700.00; in the
Certificate of Completion, the actual cost of construction was P2,347,706.81;
while in the Certificate of Occupancy the cost of the project as built was
declared at P2,341,706.00. Considering
the discrepancies, the conclusiveness of the said documents fall when arrayed
against the pieces of evidence introduced by the spouses
However,
we find that the spouses
As
alleged by Matela, the spouses
Evidently,
both parties in this case breached their respective obligations. The well entrenched doctrine is that the law
does not relieve a party from the effects of an unwise, foolish or disastrous
contract, entered into with full awareness of what he was doing and entered into
and carried out in good faith. Such a
contract will not be discarded even if there was a mistake of law or fact.
Courts have no jurisdiction to look into the wisdom of the contract entered
into by and between the parties or to render a decision different therefrom.
They have no power to relieve parties from obligation voluntarily assumed,
simply because their contracts turned out to be disastrous deals or unwise
investments.[37] However,
in situations such as the one discussed above, where it cannot be conclusively
determined which of the parties first
violated the contract, equity calls and justice demands that we apply the
solution provided in Article 1192 of the Civil Code:
Art.
1192. In case both parties have
committed a breach of the obligation, the liability of the first infractor
shall be equitably tempered by the courts. If it cannot be determined which of
the parties first violated the contract, the same shall be deemed extinguished,
and each shall bear his own damages.
In
Camus v. Price, Inc.,[38]
we held that:
Even assuming, therefore, that the Lessee’s obligation
to insure the building arose after the completion of the construction of the
buildings in September, 1951, as the Lessor also defaulted in the performance
of his corresponding duty, it can not really be determined with definiteness
who of the parties committed the first infraction of the terms of the contract.
Under the circumstances, the conclusion reached by the Court of Appeals, that
the parties are actually in pari delicto, must be sustained, and the
contract deemed extinguished, with the parties suffering their respective
losses.
In
the instant case, the losses to be incurred by the parties will come, as far as
Matela is concerned, in the form of the alleged unpaid balance of the
construction cost that he is seeking to collect from the spouses
WHEREFORE, the Decision dated
SO ORDERED.
CONSUELO YNARES-SANTIAGO
Associate Justice
WE
CONCUR:
ARTEMIO V. PANGANIBAN
Chief Justice
Chairperson
MA. ALICIA AUSTRIA-MARTINEZ
ROMEO J. CALLEJO, SR.
Associate Justice
Associate Justice
MINITA V. CHICO-NAZARIO
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, it is hereby certified that the conclusions in the above
Decision were reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
ARTEMIO
V. PANGANIBAN
Chief Justice
[1] Rollo of G.R. No. 167767, pp.
43-53. Penned by Associate Justice
Andres B. Reyes, Jr. and concurred in by Associate Justices Rosmari D.
Carandang and Monina Arevalo-Zenarosa.
[2]
[3]
[4]
Records, p. 1.
[5]
Agreed construction cost of P5,090,560.00 plus P300,000.00 additional works
less payments of P4,649,078.00.
[6]
Records, pp. 1-3.
[7] Rollo of G.R. No. 167767, p. 41.
[8]
[9]
[10]
[11] Rollo of G.R. No. 167799, p. 6.
[12] Rollo of G.R. No. 167767, p. 16.
[13] Rollo of G.R. No. 167799, p. 8.
[14] Almendrala v. Wing On Ngo, G.R. No.
142408,
[15]
Exhibit “H” and Exhibit “3”, Records, pp. 223-227.
[16]
Jurado, Comments and Jurisprudence on Obligations and Contracts, 1993 edition, pp. 59-60.
[17]
See Exhibit “3-B”, Records, p. 224.
[18]
See Exhibit “3-C”, id. at 225.
[19]
See Exhibits “5-E”, “5-S”, “5-BB”, “5-CC”, “5-DD”, ”5-FF”, “5-OO”, “5-SS”,
“5-TT”, “5-KKK”, “5-NNN”, id. at 224.
[20]
See Exhibit 3-F, id. at 226.
[21]
See Exhibits “5-C”, “5-D”, “5-F”, “5-G”, “5-H”, “5-I”, “5-K”, “5-J”, “5-L”,
“5-M”, “5-N”, “5-O”, “5-P”, “5-Q”, id. at 224.
[22]
See Paragraph J, Schedule of Finishes, of the Specification, id. at 226.
[23]
See Wall Finishes section of the Specification, id. at 227.
[24]
See Exhibits, “5-CC” and “5-EE”, id.
at 238.
[25]
See Exhibits, “5-GG”, “5-HH” and “5-II”, id.
at 239.
[26]
See Exhibit “5-PP”, id. at 242.
[27]
See Exhibit “5-QQ”, id. at 242.
[28]
See Exhibit “5-UU”, id. at 243. See also Exhibit “5-XX”, id. at 244.
[29]
See Exhibit “5-VV”, id. at 244.
[30]
See Exhibit “5-FFF”, id. at 247.
[31] TSN,
[32]
Records, p. 126.
[33]
See Exhibit “F”, Records, p. 128.
[34]
See Exhibit “G”, id. at 129.
[35]
See Exhibit “B”, id. at 124.
[36]
See Exhibit “C”, id. at 125.
[37] Sanchez v. Court of Appeals, 345 Phil.
155, 190-191 (1997).
[38] G.R.
Nos. L-17858-9,