THE
INDUSTRIAL TECHNOLOGY G.R.
No. 163359
DEVELOPMENT INSTITUTE rep. by
DR. RUFINO C. LIRAG, JR., Present:
Petitioner,
QUISUMBING,
J.,
Chairperson,
-
versus - CARPIO,
CARPIO
MORALES,
TINGA, and
VELASCO,
JR., JJ.
RUFINO
M. VILLANUEVA, doing
business under the name and
style of Promulgated:
R.M. VILLANUEVA CONSTRUCTION,
Respondent.
x----------------------------------------------------------------------------------x
Tinga, J.:
On
Villanueva, for RMVC, and Dr. Rufino C. Lirag, Jr., representing ITDI, provided that the
construction of the entire second floor of the said building should be finished
within 180 days or on or before P10,469,270.00.[1]
Work on the project
promptly started the following month. As the work proceeded, however, RMVC
began to fall behind schedule in completing the various phases of the project
as provided by the approved performance schedule. This situation prompted ITDI to inform RMVC on
RMVC replied that the slippage in its work was caused by
its discovery and correction of some structural defects in Phase I of the
project referring to the existing foundation and basement of the building
earlier constructed by the previous contractor.[4] RMVC requested a 45-day extension of the
contract period and informed ITDI that it had incurred additional costs
amounting to P1,982,190.00.
At the job construction
site meeting on
On January 14, 1993, the DOST Infrastructure Committee
made a final evaluation of RMVC’s work and found that
as of January 10, 1993, the latter had accomplished only 46.7139% of the
project on the basis of the Project Evaluation Review Technique/Critical Path
Method (PERT/CPM). Pursuant to Section
CI-1(8-4) of PD 1594, the DOST Infrastructure Committee required RMVC to pay
ITDI the amount of P1,570,390.50 as liquidated
damages.[6] A Summary of RMVC’s Accountability was presented
by ITDI showing that RMVC owed ITDI the
amount of P2,642,082.88 after considering its
collectibles, accomplishment, materials delivered at site, damages, and ITDI’s progress and advance payments.[7]
On P600,000.00 representing the total uncollected amount due it as of
January 1993; P1,383,011.20
representing the cost of construction materials belonging to RMVC and
appropriated by ITDI; moral damages in the amount of P500,000.00; attorney’s
fees of P50,000.00 plus P1,000.00 per court appearance; and costs
of suit.[8]
Both parties appealed to the Court of Appeals. On
IN VIEW OF THE FOREGOING, the appealed
decision is AFFIRMED, with the following modifications:
1) The actual damages is reduced to P263,366.86;
2) The awarded cost of construction materials is reduced
to P713,992.00; while
3) The award of moral damages and attorney’s fees are
deleted.
No Cost.
SO
ORDERED.[10]
ITDI’s motion for
reconsideration was denied in the Resolution[11]
dated
In the present petition filed on behalf of ITDI by the
Office of the Solicitor General, ITDI urges the Court to re-examine the
appellate court’s finding that RMVC has completed 51.48% of the project thereby
entitling it to the corresponding actual damages. It claims that RMVC was actually able to
complete only 46.71% of the project. Thus, ITDI owes it only P33,903.46 which
is equivalent to the difference between P4,890,609.27 (representing
46.71% of the original contract cost of P10,469,270.00) and P4,856,705.81
(representing 46.39% of the original contract cost which had already been paid and
received by RMVC).
ITDI also denies having appropriated for itself the
construction materials amounting to P713,992.00 left by RMVC on the
project site.[12]
RMVC, on the
other hand, would have us sustain the appellate court’s award of actual damages
and cost of construction materials.[13]
The issue of
whether ITDI is entitled to unilaterally cancel the contract has been correctly
resolved in the affirmative by the Court of Appeals. Moreover, it is deemed settled, as RMVC did
not appeal and in the present petition it has limited its Comment[14]
and Memorandum[15]
to the issue of its entitlement to actual damages.
The only
issue left for resolution is whether RMVC indeed completed 51.48% of the
project as it alleged in its Amended Complaint[16]
to entitle it to the actual damages awarded by the Court of Appeals. This is a factual question which this Court,
as a general rule, cannot pass upon, its jurisdiction in cases brought to it
from the Court of Appeals by way of petition for review under Rule 45 being limited
to reviewing or revising errors of law.
However, there is in this case a clear conflict between the factual
findings of the trial court and the appellate court necessitating a review of
this factual issue as an exception to the general rule.[17]
The trial
court ruled that RMVC is entitled to actual damages amounting to P600,000.00 representing its total uncollected amount as of
January 1993. It also found that ITDI
appropriated for itself the construction materials amounting to P1,383,011.20
left by RMVC on the project site. In
contrast, the Court of Appeals declared RMVC to have completed 51.48% of the
project and therefore still entitled to an additional P263,366.86 corresponding
to the difference between 51.48% of the total contract price and the amount
already paid to it. Additionally, the
appellate court reduced the awarded cost of construction materials to P713,992.00.
The appellate
court’s finding that RMVC was able to finish 51.48% of the project was based on
RMVC’s Amended Complaint and its own progress report.[18] It does not escape notice that this document
was prepared wholly by RMVC and was not signed by ITDI’s
representative. It was, in fact,
objected to by ITDI for being self-serving.[19]
RCVM’s
allegation that it continued construction and was able to finish 51.48% of the
project as of January 1993 could not have been possible in light of Architect Rufino M. Villanueva’s admission, presented as RCVM’s rebuttal evidence, that the contract was
terminated in November 1992 and that he and his
employees were driven away by ITDI’s personnel in
December of that year.[20] Offering Villanueva’s direct written
testimony in rebuttal, RCVM admitted that it was only able to complete 46.7139%
of the project. It said:
7. That while plaintiff was able to accomplish
only 46.7139% of the construction of the basis of PERT/CPM as of January 10,
1993 as per letter of Chairman Arbis {Exh. “10”}, the defendant committed a grave mistake by
driving away the plaintiff and his workers from the construction site during
the month of November 1992 when the contract has not expired; that the
contract was supposed to terminate on January 10, 1993 but defendant
unceremoniously terminated the same over and above plaintiff’s objection;
defendant, ITDI {DOST} is, therefore, liable for damages to the plaintiff;
plaintiff did not violate any of the implementing rules of PD [No.] 1594.[21]
What does
appear undisputed from the records is that the DOST Infrastructure Committee
certified that as of
In light of
these findings, we hold that the appellate court erred in awarding actual
damages to RMVC on the basis of a 51.48% rate of completion. The clear preponderance of evidence supports ITDI’s contention that RMVC was only able to accomplish
46.7139% of the project and is only entitled to a proportionate amount in
damages. Translated into figures, RMVC
is entitled to P33,909.97 corresponding to the difference between P4,890,604.32,
representing 46.7139% of the contract price of P10,469,270.00, and P4,856,694.35,
representing 46.39% of the contract price which had already been paid to RMVC.
In concluding
that ITDI is liable to pay P713,992.00 as cost
of construction materials, the Court of Appeals referred to the same conclusion
reached by the trial court in its decision based on an admission by ITDI that
it appropriated these materials.[24] ITDI claims that this conclusion is without
basis.
Our own
review of the records reveals that ITDI failed to deny RMVC’s
allegation in par. 13 of its Amended Complaint that it appropriated the unused
construction materials left at the site.
RMVC alleged:
13.
When plaintiff was forced to vacate the project site in January 1993,
he has unused construction materials therein, the value of which is P1,382,091.20
as shown in the inventory of materials, a copy of which is hereto attached as
Annex “D” and that such materials are being appropriated by the defendant thus
making him liable for the payment of such amount to the plaintiff;[25]
In its Answer, ITDI
admitted the existence of the unused materials on the project site but denied
that these materials have a value of P1,382,091.20.[26] Instead, it claimed that based on its own
impartial canvass, the value of these materials is only P713,992.88.[27]
It is a
familiar rule in this jurisdiction that material averments in the complaint,
such as the allegation that ITDI appropriated the construction materials left
by RMVC at the site, shall be deemed admitted when not specifically denied.[28] In this case, while it presented its own
estimate of the value of the construction materials, nowhere in its Answer did
ITDI deny having appropriated the same.
It is also significant
that ITDI’s witness, Engr. Arnaldo Reyes, testified that the value of the construction
materials amounting to P713,992.88 was “duly deducted from plaintiff’s
indebtedness.”[29]
This indicates that ITDI indeed
appropriated these materials. Otherwise, it would not have deducted their value
from RMVC’s accountability.
As a final
note, we deem it best, in the interest of justice, not to award interest in the
concept of actual damages on the total amount due to RMVC. This case was first filed in 1993. The parties have been locked in a long and
protracted legal battle for 14 years due to no fault on the part of ITDI. To require it to pay interest on the amount
due to RMVC from the time of the filing of the Amended Complaint would be unwarranted
and unjust.[30] Thus, interest at the rate of twelve percent
(12%) per annum on the award of actual damages in the amount of P33,909.97 and cost of construction materials in the amount of P713,992.00
should be imposed only upon the finality of the judgment of this Court.[31]
IN VIEW OF THE
FOREGOING, the petition is PARTIALLY GRANTED.
The Decision of the Court of Appeals dated P236,366.86. Petitioner is instead ordered to pay respondent
the reduced amount of P33,909.97 as actual
damages and the amount of P713,992.00 as cost of construction materials.
Legal interest at the rate of twelve
percent
(12%) per annum shall be imposed
on these amounts upon finality of this Decision until full payment
thereof. No pronouncement as to costs.
SO ORDERED.
DANTE O. TINGA Associate Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
ANTONIO T. CARPIO CONCHITA CARPIO MORALES
Associate Justice Associate Justice
PRESBITERO J. VELASCO,
JR.
Associate Justice
ATTESTATION
I attest that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
LEONARDO A. QUISUMBING
Associate Justice
Chairperson,
Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Chairperson’s Attestation, it is hereby
certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
REYNATO S. PUNO
Chief Justice
[9]Rollo, pp. 24-34; Penned by Associate Justice Conrado M. Vasquez, Jr. and concurred in by Associate Justices Bienvenido L. Reyes and Arsenio J. Magpale.
[17]Vazquez v. Ayala Corporation, G.R. No. 149734, November 19, 2004, 443 SCRA 281; Spouses Rosario v. Court of Appeals, 369 Phil. 729 (1999).
[24]
There is also no clear evidence that the amount of the construction
materials left at the site and appropriated by ITDI is P1,383,011.20.
The latter, however, admitted that it appropriated P713,992.00 of the
said materials (RTC Decision, p. 4; Records, p. 375). The awarded damages for
construction materials arrogated by ITDI should therefore be reduced to the
latter amount.
[28]Rules of Court, Rule 8, Sec. 18; Vda. de Gabriel v. Court of Appeals, G.R. No. 103883, November 14, 1996, 264 SCRA 137; Yap v. NLRC, 343 Phil. 803 (1997).
[30]National Power Corporation v. National Merchandising.
Corporation, G.R. Nos.
L-33819 and L-33897,