THIRD DIVISION
G.R. Nos. 193969-193970, July 05, 2017
KA KUEN CHUA, DOING BUSINESS UNDER THE NAME AND STYLE KA KUEN CHUA ARCHITECTURAL, Petitioner, v. COLORITE MARKETING CORPORATION, Respondent.
G.R. Nos. 194027-194028
COLORITE MARKETING CORPORATION, Petitioner, v. KA KUEN CHUA, DOING BUSINESS UNDER THE NAME AND STYLE KA KUEN CHUA ARCHITECTURAL, Respondent.
D E C I S I O N
REYES, J.:
These are consolidated petitions for review on certiorari assailing the Decision1 dated July 28, 2009 and Resolution2 dated October 4, 2010 of the Court of Appeals (CA) in CA-G.R. SP Nos. 103892 and 103899, which affirmed with modifications the Final Award3 of the Construction Industry Arbitration Commission (CIAC) dated May 27, 2008 in CIAC Case No. 32-2007.
a) He is capable[,] competent and duly licensed to undertake the project in accordance with the plans and specifications but [his liability cannot] extend to the excavation works[,] which were not undertaken by KKCA but by a subcontractor; b) His obligation to complete the construction of [Colorite's] residential/commercial building in 365 days reckoned from the seventh day after release of the downpayment was suspended by the stoppage of the excavation by the Makati City Building Officer[,] and by [Colorite's] failure to pay the cost of soil protection and the balance of its 70% share in the costs of restoration work of the Hontiveros property[,] which not only delayed the construction and increased its costs but rendered the performance of the contract extremely difficult; c) On January 10, 2004, full blast excavation work in the construction project was beg[u]n by [WCC]. On January 17, 2004, substantial soil erosion occurred and caused damages to the adjacent Hontiveros property and [on] January 27, 2004, the Makati City Building Office ordered the suspension of the excavation which lasted up to the present despite [diligent] effort on the part of [KKCA] to lift the suspension order and repair the damage to the Hontiveros property. On February 28, 2004[,] another erosion occurred causing further damage to the Hontiveros property; d) [Colorite] agreed to share 70% in the restoration cost of the Hontiveros property [but] the remaining 30% was [KKCA's] share; as proof of [Colorite's] commitment to the new agreement[,] it paid Php150,000.00 for the boring test, but [Colorite] reneged on its undertaking to share in the restoration costs of the Hontiveros property thereby compelling [KKCA] to advance [the] costs[,] which claimant was duly notified [of] and billed[.] [H]owever, the latter refused further payment and instead offered the amount of Php800,000.00 as its donation not by way of sharing; e) [KKCA] denied the claim of [Colorite] for rental income loss in the sum of Php13,345,481.00 as without basis and purely speculative; [KKCA] further denied [Colorite's] claim for liquidated damages in the sum of Php8,780,000.00 because the period of construction was deemed suspended with the suspension of the excavation by [Colorite's] failure to pay its share in the soil protection and restoration costs of the Hontiveros property; [and] f) On its counterclaims[,] [KKCA] claimed for soil protection installed in the sum of Php1,324,340.64, soil protection for the unexcavated portion in the sum of Php3,583,872.00, design fee in the sum of Php2,310,000.00, ECC permit in the sum of Php50,000.00, balance of 70% share in the restoration of Hontiveros property in the sum of Php1,777,011.00; cost of maintaining the project site in the sum of Php2,047,269.00, moral damages for Php500,000.00, exemplary damages for Php500,000.00 and attorney's fees for Php500,000.00.23
On the basis of the evidence submitted by the parties the Arbitral Tribunal finds and so holds:Not satisfied with the CIAC award, both parties filed their respective petitions for review before the CA.
[COLORITE]:
1. [Colorite] is entitled to its claim for liquidated damages but only for 50% thereof (Php8,780,000.00) or for the sum of Php4,390,000.00 because it is equally responsible for the delay; [and]
2. [Colorite] is not entitled to recover its other claims for loss of rental earnings, attorney's fees and litigation expenses.
[KKCA]:
1. [KKCA] is entitled to his claim for soil protection works but only for the sum of Php552,840.60 but cannot recover his claim for soil protection works for the unexcavated portion;
2. [KKCA] is entitled to recover [its] claim for design fee in the sum of Php2,310,000.00;
3. [KKCA] is not entitled to [its] claim for recovery of ECC permit fee inasmuch as there is evidence [that] it was paid by [Colorite];
4. [KKCA] is entitled to [its] claim for restoration costs but only for the sum of Php523,579.20, which is 50% of [its] proven total claim of Php1,047,157.40;
5. [KKCA] is entitled to [its] claim for recovery of the costs of maintaining the project site but only for the sum of Php313,684.32[,] which is 50% of [its] total proven costs of Php627,368.64, inasmuch as the costs are part of the restoration costs of the Hontiveros property;
6. [KKCA] is not entitled to [its] claim for moral and exemplary damages and for attorney's fees; [and]
7. The parties shall bear their respective arbitration costs.25
WHEREFORE, in view of the foregoing, the instant PETITION is partially GRANTED. The assailed Final Award dated May 27, 2008 of the [CIAC] in CIAC Case No. 32-2007 is AFFIRMED with MODIFICATIONS.According to the CA, the construction contract shows that Colorite was indeed liable for the payment of the design fee, it being not really included in the summary of the bid proposal, which itemized all the works that KKCA proposed to perform.28 On the other hand, soil protection and excavation works were deemed included in the KKCA's scope of work; hence, expenses for said items should be deemed as necessarily contained in the agreed contract cost and no separate computation and payment for the same is necessary.29 Nevertheless, the CA adjudged that KKCA is entitled to its claim for soil protection works in the amount proved by the evidence presented, and the same shall be deducted from the total down payment already made.30
Accordingly, the assailed Award IS hereby AFFIRMED with respect to the following:FOR COLORITE:In addition, the Final Award is MODIFIED with respect to the following:
1. Colorite is entitled to its claim for liquidated damages but only for 50% of Php8,780,000.00 or for the sum of Php4,390,000.00.
2. Colorite is not entitled to loss of rental earnings, attorney's fees and litigation/arbitration expenses.
FOR KKCA:
1. KKCA is entitled to its claim for soil protection works but only in the amount of Php552,840.60.
2. KKCA is entitled to its claim for design fee in the amount of Php2,310,000.00.
3. KKCA is not entitled to its claim for increase in the price of construction materials, moral and exemplary damages, attorney's fees and litigation/arbitration costs.FOR COLORITE:SO ORDERED.27
1. Colorite is hereby ordered to pay KKCA the amount of Php550,000.00 (Php700,000.00 less P150,000.00 which it already advanced) as part of its share in the restoration costs of the Hontiveros property;
2. Colorite is ordered to share 50% in the total maintenance costs (Php2,047,268.75) or a total amount of Php1,023,634.30.
3. Colorite is ordered to reimburse KKCA the amount paid by the latter for the ECC permit in the amount of Php50,000.00.
4. In satisfying Colorite's obligations, the necessary deductions should be made from its down payment of Php6,600,000.00 as may be appropriate.
FOR KKCA:
1. KKCA is directed to finish the subject construction project subject to the necessary adjustments in the contract price;
2. KKCA is enjoined to secure the quitclaim from the Hontiveros family and the lift order from the city government of Makati in order for the construction project to proceed.
For its part, KKCA asserts that the CA erred in:
a) not awarding Colorite full liquidated damages and in ordering the adjustment of the contract price; b) ruling that Colorite is not entitled to loss of rentals and attorney's fees; c) ruling that Colorite is liable to share in the restoration costs of the Hontiveros property and maintenance costs of the project; d) ruling that Colorite is liable to pay the costs of design fee and ECC permit; and e) ruling that KKCA is entitled to its claim for soil protection works.40
a) finding that excavation and soil protection works are included in KKCA's responsibilities and should be deemed included in the Contractor's Scope of Work indicated in the contract; b) directing KKCA to finish the subject construction project; c) ruling that KKCA is enjoined to secure the quitclaim from the Hontiveros family, and the lift order from the City Government of Makati so that the construction project can proceed; d) awarding Colorite liquidated damages m the amount of Php4,390,000.00; e) ruling that Colorite is liable only for the amount of Php700,000.00 and not 70% of the costs for the restoration of the Hontiveros property; f) ruling that KKCA was only able to prove the amount of Php552,840.64 as cost for soil protection works; g) ruling that Colorite is liable only for 50% of the cost of maintaining the project site; and h) not holding Colorite liable for moral damages, exemplary damages, attorney's fees, arbitration fees, and other costs of suit.41
The actual cause of the delay is the failure by the parties to realize and admit that they are both to blame for the erosion the excavation had caused to the adjacent Hontiveros property and therefore are to share equally the expenses of restoring said property.On the basis of estoppel, the CIAC concluded that eolorite was also at fault considering that it attended the various meetings regarding the restoration of the Hontiveros property; and it did not attribute any fault on WCC. To this, the Court cannot agree.
The excavation was done by [WCC] that was engaged by [Colorite] and it was done without the correct and adequate soil protection for which reason it caused erosion to the adjacent Hontiveros property. [Colorite] assumed responsibility for the defective excavation of its contractor when it did not hold [WCC] accountable and was present in the various meetings with [KKCA], the Hontiveros family[,] and Makati Building Official regarding the restoration of the Hontiveros property and it is estopped to deny it. Estoppel precludes one from denying or asserting by his own deed or representative any contrary to that established as the truth in the legal contemplation (R-11 Builders Inc. v. CIAC G.R. No. 152545 & 165687, Nov. 15, 2007). But [KKCA] is equally to blame because erosion occurred on January 20, 200745 (sic) after full blast excavation started on January 17, 200746 (sic) after excavation was added to its scope of work on December 15, 2003 (Exh. R-11), which placed under its supervision the excavation works of the sub-contractor. x x x.47 (Emphasis in the original)
In the construction industry[,] soil protection is part of excavation works inasmuch as it is necessary in order to prevent erosion. The sub-contractor, [WCC], the company contracted by [Colorite] to do the excavation work for the basement and foundation of the building before the contract and Addendum #01 were signed by the parties, is duty bound to provide correct and adequate soil protection to avoid erosion. [Co1orite] failed to establish that its sub-contractor did soil protection work and if it did[,] it was [not] adequate or properly done. On the contrary, what happened was that after its initial full blast excavation works[,] the wall of the excavated basement adjacent [to] the Hontiveros property collapsed.48The CIAC concluded that by not holding wee accountable, eolorite, thereby, condoned its actions and assumed its liabilities. As such, WCC's liability in the resulting damage to the Hontiveros property should be borne by Colorite. To this, the Court once again disagrees. For one, WCC was not an employee of Colorite within the contemplation of Article 2180,49 in relation to Article 2176,50 of the Civil Code as to make the latter liable tor the damages caused by the former. Further, the fact that it was Co1orite, which contracted WCC to do the excavation works, is of no moment. It is beyond dispute that the parties expressly agreed that all excavation works are included in KKCA's scope of work, as the general contractor of the project. Paragraph 21 of Addendum #01 is clear on this point. It reads:
21. All excavation works as required for, should be included on the scope of works of the Contractor. Disregard Pre-Bid Minutes Item II-G at Page 3.In view of the said stipulation, WCC was placed under KKCA's supervision and control.
NOTE: Corresponding cost to be paid to the contractor based on sub-contractor's cost.51 (Emphasis ours)
Archt. L. T. Reyes (Respondent):As found by the CIAC:
Actually[,] we have performed the remedial measures on that. We have installed the warmest and plastering, so that we can contain the erosion.
Atty. B. G. Fajardo (Arbitrator):
Yeah[,] before this warmest, this remedial measure was done[,] there were prior erosions. There were a remedial measure because erosion took place, is that correct?
Archt. L. T. Reyes (Respondent):
Yes. There is an erosion, there [were] erosion[s].
Atty. B. G. Fajardo (Arbitrator):
That's why precisely, after you did a remedial measures after the erosion took place in January 2004, is that correct?
Archt. L. T. Reyes (Respondent):
2004?
Atty. B. G. Fajardo (Arbitrator):
Yes.
Archt. L. T. Reyes (Respondent):
Yes, sir.
Atty. B. G. Fajardo (Arbitrator):
Then of course after you made a remedial measure[.] you [were] continuous[ly] supervising the excavation, is that correct?
Archt. L. T. Reyes (Respondent):
Excuse me[,] sir.
Atty. B. G. Fajardo (Arbitrator):
You just follow me, in January, okay, you took over this revision of the excavation work. Now during the work, excavation works [which] you supervise[d] because of the addendum[,] there was an erosion in January 2004, is that correct?
Archt. L. T. Reyes (Respondent):
Yes[,] sir.
Atty. B. G. Fajardo (Arbitrator):
After the erosion, you did the remedial measures?
Archt. L. T. Reyes (Respondent):
Yes[,] sir.
Atty. B. G. Fajardo (Arbitrator):
Okay. Now...
Archt. L. T. Reyes (Respondent):
They do continuously...
Atty. B. G. Fajardo (Arbitrator):
Just answer me, just answer then go ahead. You did the remedial measures, okay. Then the excavation works continued then there was another erosion. So you abide again [by] the remedial measures, that's my point. In other words, you perform[ed] duties attendant to your work as contractor in the excavation works in the basement.
Archt. L. T. Reyes (Respondent):
Excuse me, sir. We do remedial measure continuously not only when there is erosion. We continuously put a (unintelligible) and subsequently during that time[,] we consulted a foundation specialist which [is] Pearl and Jade. We do not attack the problem when there is a problem. We attack it before the problem occurs.
Atty. B. G. Fajardo (Arbitrator):
Yeah, that is correct. That should be the ideal thing. But you did the remedial measures in January after the erosion took place in January, is that correct?
Archt. L. T. Reyes (Respondent):
Yes.
Atty. B. G. Fajardo (Arbitrator):
Okay. That's true, you did the remedial measures because [erosion] already took place. And it[']s good that you continued making a remedial measure, but the fact is there was a prior erosion before you did the remedial measures. And you continued [with] this[.] [D]espite your remedial measure[,] another erosion took place in February 2004, is that correct?
Archt. L. T. Reyes (Respondent):
It's correct.55 (Emphasis ours)
[E]rosion occurred on January 20, 200756 (sic) after full blast excavation started on January 17, 200757 (sic) after excavation was added to its scope of work on December 15, 2003 (Exh. R-11) which placed under its supervision the excavation works of the sub-contractor. Plainly, when [KKCA] accepted excavation as an additional work to the scope of the contract[,] it became part of its contractual obligations under the contract. x x x [KKCA] showed [it] felt answerable for the erosion when it voluntarily took measures to contain the erosion after it happened. (Affidavit of Luis T. Reyes) [KKCA] did not have the competence to do soil protection itself or supervise its being done by the sub-contractor and hid this deficiency, consequently, failing to address the problem immediately until the erosion took place. The soil protection it did immediately after the initial erosion was not adequate as further erosion was evident which compelled [KKCA] to engage the services of a foundation specialist, Pearl and Jade[,] in order to improve the soil protection methodology. (Affidavit of Luis T. Reyes) x x x.58In its petition before the Court, KKCA imputes negligence on the part of WCC,59 but fails to specifically mention how. Nothing was asserted to point out how the erosion occurred due to WCC's action or inaction.
Atty. B. G. Fajardo (Arbitrator):Indeed, KKCA cannot deny its contractual obligation to ensure that excavation works were properly done. It is settled that the law does not relieve a party from the effects of an unwise, foolish, or disastrous contract, entered into with all the required formalities and with full awareness of what he was doing, and courts have no power to relieve parties from obligations voluntarily assumed, simply because their contracts turned out to be disastrous deals or unwise investments. Valenti non fit injuria.65
x x x. Now when you sign[ed] the addendum, you sign[ed] it freely, without duress, is that correct? You signed it without duress[,] you signed it freely?
Archt. K. K. Chua (respondent):
Yes.63
x x x x
Atty. B. G. Fajardo (Arbitrator):
No, but you know when you sign[ed] the contract on December 15, 2003, you already knew that there were excavations there.
Archt. K. K. Chua (Re ondent):
Yes, we do sir.64 (Emphasis ours)
Article XIII of the Main Construction Contract:
- The Contractor to provide, erect and maintain all necessary bracing, shoring, planking, etc.[,] as required to protect the adjoining property against settlement and damages. Adequate dewatering equipments (sic) and pumps to be provided. The Contractor has the prerogative to choose what type of methodology that he would use for the project but he [has] to make sure that [itJ will protect the adjacent properties against erosion and settlement.67
The OWNER shall be held free and harmless from any liability arising from claims ofthird parties arising from the construction such as[,] but not limited to wages, pay, compensation for injury or death to laborers, SSS premiums, adjoining property settlement, etc.[,] all of which shall be for the account of the CONTRACTOR.68The factors which delayed the project's completion
"We (or I) make this proposal with full knowledge of the kind, quantity, and quality of the Articles and services required and if the proposal is accepted, undersigned (KKCA) agrees to enter into formal agreement and mobilize and start after the excavation work by the other contractor."73 (Emphasis ours)The Court cannot sanction KKCA's stance. What is material is that KKCA agreed to the stipulations contained in Addendum #01, which, among others, placed excavation and soil protection works within its scope of undertakings. Neither does it matter that the stipulations in Addendum #01 and Addendum #02 were not included in the discussion on the contents of the main Construction Contract as long as the concerned party was not deprived of ample time to study them. In any event, it was established that KKCA's consent to the provisions of Addendum #01 and Addendum #02 was not vitiated.
g) KKCA advised all the Bidders that excavation works from the natural grade line up to the Basement level shall be done by separate Excavation Contractor. However, excavation works from the Basement level up to the required column foundation height and other trimming works shall be included under the Contract of the General Contractor.In spite of the presence of interested bidders, Colorite decided to secure the services of KKCA as the project's general contractor.78 KKCA agreed, and was asked to submit a formal Summary of Bid Proposal.79 As pointed out above, and pursuant to item II, paragraph (g) of the pre-bid conference minutes of meeting, the summary of bid proposal pertinently stated that KKCA shall mobilize and start after the excavation works are performed by the excavation sub-contractor.
Furthermore, all safety requirements needed during the General excavation works shall be included under the Contract of the Excavation Contractor. However, any safety requirements needed during the excavation works of the column footing foundation shall be included under the Contract of the General Contractor.77
Article 1370 of the Civil Code in part states that "if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control."NOTE: Corresponding cost to be paid to the contractor based on sub-contractor's cost.80
- All excavation works as required for, should be included on the scope of works of the Contractor. Disregard Pre-Bid Minutes Item II-G at Page 3.
- The Contractor to provide, erect and maintain all necessary bracing, shoring, planking, etc. as required to protect the adjoining property against settlement and damages. Adequate dewatering equipments (sic) and pumps to be provided. The Contractor has the prerogative to choose what type of methodology that he would use for the project but he have (sic) to make sure that they will protect the adjacent properties against erosion and settlement.81
The rule is that where the language of a contract is plain and unambiguous, its meaning should be determined without reference to extrinsic facts or aids. The intention of the parties must be gathered from that language, and from that language alone. Stated differently, where the language of a written contract is clear and unambiguous, the contract must be taken to mean that which, on its face, it purports to mean, unless some good reason can be assigned to show that the words used should be understood in a ditierent sense. Courts cannot make for the parties better or more equitable agreements than they themselves have been satisfied to make, or rewrite contracts because they operate harshly or inequitably as to one of the parties, or alter them for the benefit of one party and to the detriment of the other, or by construction, relieve one of the parties from terms which he voluntarily consented to, or impose on him those which he did not.83 (Emphasis in the original deleted)There was no agreement that Colorite has to share in the restoration of the Hontiveros property.
It can thus be seen that despite its earlier commitment to contribute P700,000.00 for restoration costs, Colorite failed to pay the said amount. This Court holds that while Colorite cannot be held accountable for 70% of the restoration costs in the absence of a clear agreement to this effect, it should nonetheless be directed to fulfill its obligation to pay P700,000.00. x x x.As can be deduced from the foregoing, it is not clear that the parties really agreed on whether Colorite was to contribute Php700,000.00 or 70% of the restoration cost. The CA's conclusion arose from KKCA's demand of Php700,000.00 from Colorite. The CA regarded the same as KKCA's acceptance ofColorite's purported offer.
x x x [A]lthough their contract states that KKCA should be held liable for expenses pertaining to such damage, the subsequent acts of the parties, specifically Colorite's undertaking to contribute P700,000.00 to the restoration costs, effectively superseded the said terms of the contract, and should now be made the governing law between the parties. Article 1159 of the Civil Code supports this conclusion, when it provides that "(o)bligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith." Moreover, Article 1315 of the same Code provides that "(c)ontracts are perfected by mere consent, and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law." When Colorite thus bound itself to share in the restoration cost by paying P700,000.00, this effectively became the contract between the parties with regard to this matter. While at first, there appeared to be a confusion as to the exact amount becuuse KKCA was insisting on a 70-30 sharing, it has been established that KKCA also eventually demanded P700,000.00 from Colorite, thereby showing that at that point, there was already an agreement as to the amount that should be delivered by Colorite. It may be said, therefore, that a binding agreement has been perfected between the parties insofar as the restoration cost is concerned, and they should be bound by it regardless of who should be blamed, if any for the erosion. x x x.
x x x x
x x x We are convinced that the parties' incapability to perform what was incumbent upon them was not attended by bad faith. On the part of Colorite, its failure to advance P700,000.00 as part of its share in the restoration cost was due to a breakdown in the negotiation process which occurred when KKCA was insisting on a 70-30 sharing. Although We maintain that Colorite was still at fault when it failed to give the promised P700,000.00 when KKCA was already demanding the same, it cannot be said that such refusal was tainted by bad faith. Instead, it was more a case of a breakdown in the negotiation process, or a deadlock which the parties were not able to overcome due to their adherence to their respective positions. x x x.85 (Emphasis ours)
The Arbitral Tribunal is not convinced that there was an agreement by the parties on the sharing of expenses for the restoration of the Hontiveros property. [Colorite] denied there was such an agreement (during the ocular inspection of Project Site) and the alleged written agreement presented by [KKCA] was not signed by the parties. (Exh. R-19) [KKCA] mentioned several names whose presence supposedly witnessed [Colorite's] agreeing to the 70%-30% sharing in the restoration expenses but failed to present any at the hearing in order to support his contention. (Affidavit of Ka Kuen Tan Chua, Item 37)89KKCA is under obligation to secure the quitclaim of the Hontiveros family and the lifting of the Hold Order issued by the City Government of Makati
The owner shall be held free and harmless from any liability arising from claims of third parties arising from the construction such as but not limited to wages, pay, compensation for injury or death to laborers, SSS premiums, adjoining property settlement, etc. all of which shall be for the account of the CONTRACTOR.92 (Emphasis ours)By express provision of Article 1315 of the Civil Code, the parties are bound not only to the fulfilment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law.
Atty. A. H. Habitan (Counsel-Claimant):It also appears that even if Colorite took it upon itself to secure the quitclaim, and work for the lifting of the Hold Order, there was no guarantee that the project will be continued. As shown by the following, KKCA was adamant on its position that unless Colorite delivers the amount corresponding to 70% of the restoration cost of the Hontiveros property, the project will not continue. Thus:
So, you see now that the Hontiveros property, the damage portion was finally restored...
Archt. K. K. Chua (Respondent):
Yes sir.
Atty. A. H. Habitan (Counsel-Claimant):
When was that, the date of completion of restoration?
Archt. K. K. Chua (Respondent):
The target date of completion as stated here is sometime of October 2005.
Atty. A. H. Habitan (Counsel-Claimant):
2005, and you were able to accomplish it within the target date.
Archt. K. K. Chua (Respondent):
They did the JSV Group.
Atty. A. H. Habitan (Counsel-Claimant):
And also the contractor which is the JSV Contract Services was fully paid by you?
Archt. K. K. Chua (Respondent):
Yes sir.
Atty. A. H. Habitan (Counsel-Claimant):
Now at the time you handle the full payment, did you not require them to issue you a certification of the completion of the Hontiveros property?
Archt. K. K. Chua (Respondent):
We did follow [them up] for that.
x x x x
Atty. A. H. Habitan (Counsel-Claimant):
How about from Hontiveros, did you not try also to get a certification of completion of the restoration or what you claim as [quit]claim?
Archt. K. K. Chua (Respondent):
No, because the ETCOR, the constmction manager appointed by them and the City Hall committed to do so.
x x x x
Atty. A. H. Habitan (Counsel-Claimant):
x x x After so many follow ups and you were not given [a certification/quitclaim] did you not consult a lawyer what legal action could be done against this three entities, ETCOR, JSV Contract Services and Hontiveros family.
Archt. K. K. Chua (Respondent):
No, I did not.
Atty. A. H. Habitan (Counsel-Claimant):
Did it not occur to your mind that this certifications or [quit]claim could be a basis for you to present it to the Building Official so that the Hold Order will be entirely lifted?
Archt. K. K. Chua (Respondent):
During that time it's more in my mind the obligation with the owner which is [to] settle their share. Because of that.
Atty. B. G. Fajardo (Arbitrator):
You did not ansvver my question. My question is, if you give the certification either from ETCOR, from JSV Contract Services, or from the Hontiveros family that the restoration of the damaged portion of their property was completed, you can present this to the building officials so that the hold order will be lifted.
Archt. K. K. Chua (Respondent):
We did follow up regularly at their office and sometime through phone, that [quit]claim you are saying.
x x x x
Atty. A. H. Habitan (Counsel-Claimant):
Did [it] not occur to your mind that you ultimately will be liable to the owner for not completing the project within this five times (sic)?
Archt. K. K. Chua (Respondent):
No Idon't think so because of their...is the negligence of the Hontiveros and the ETCOR. It's not my negligence.
x x x x
Atty. A. H. Habitan (Counsel-Claimant):
You did not consult your lawyer what action, legal action should be...
Archt. K. K. Chua (Respondent):
I did not.
Atty. A. H. Habitan (Counsel-Claimant):
You did not?
Archt. K. K. Chua (Respondent):
I did not.93
Atty. M. Somera (Counsel-Respondent):KKCA is guilty of negligence
Archt. Chua, you said that there was no [quit]claim or you were not been able to secure the [quit]claim...
Archt. K. K. Chua (Respondent):
Yes ma'am.
Atty. M. Somera (Counsel-Respondent):
Have you secure the [quit]claim would you have to continue the project?
Archt. K. K. Chua (Respondent):
I would have, and...
Atty. M. Somera (Counsel-Respondent):
When you have secure the [quit]claim, you have to continue the construction.
Archt. K. K. Chua (Respondent):
If I will be settled with the sharing of the 70-30.
x x x x
Atty. M. Somera (Counsel-Respondent):
If you were able to secure that [quit]claim but you were not paid, would you still have to continue with the project?
Archt. K. K. Chua (Respondent):
I won't.
Atty. M. Somera (Counsel-Respondent):
Why not?
Archt. K. K. Chua (Respondent):
Because that's part of our agreement the 70-30, I have shoulder[ed] so much expenses. It's so hard to bear with that, and owner has [breached] its contract, and its obligation and its commitment.94
The party suffering loss or injury must exercise the diligence of a good father of a family to minimize the damages resulting from the act or omission in question.This codal rule clearly obligates the injured party to undertake measures that will alleviate and not aggravate his condition after the infliction of the injury, and places upon him the burden of explaining why he could not do so.98
Further, the fact of KKCA's delay in the performance of its obligation is well established. Nevertheless, it is also true that the delay would not have been that long had Colorite opted to exercise its right to take over the project.
- Time being of the essence of this Agreement and the CONTRACTOR'S acknowledgment that the OWNER will suffer loss by the delay or failure of the CONTRACTOR to have the work completed in all parts within the time stipulated in Article IV, the CONTRACTOR hereby expressly covenants and agree to pay the OWNER liquidated damages in the amount of TEN THOUSAND PESOS (P10,000.00) for each calendar day of delay (Sundays, and legal holidays included) until final completion and acceptance by the OWNER, the said payment to be made as liquidated damages, and not by way of penalty.106 (Emphasis ours)
Endnotes:
1 Penned by Associate Justice Mariflor P. Punzalan Castillo, with Associate Justices Rosmari D. Carandang and Ramon M. Bato, Jr. concurring; rollo (G.R. Nos. 193969-70), pp. 69-110; rollo (G.R. Nos. 194027-28), pp. 45-86.
2Rollo (G.R. Nos. 193969-70) pp. 111-113; rollo (G.R. Nos. 194027-28), pp. 87-89.
3Rollo (G.R. Nos. 193969-70), pp. 631-654.
4 Id. at 70, 642-643.
5Rollo (G.R. Nos. 194027-28), p. 107.
6 Id. at 108.
7 Id.
8 Id.
9Rollo (G.R. Nos. 193969-70), pp. 192-194.
10 Id. at 195.
11 Id. at 70.
12 Id. at 646.
13 Id. at 633.
14 Id.; rollo (G.R. Nos. 194027-28), pp. 46-47.
15Rollo(G.R. Nos. 193969-70), pp. 257-258.
16Rollo (G.R. Nos. 194027-28), p. 47.
17Rollo (G.R. Nos. 193969-70), pp. 795-803.
18 Id. at 798.
19 Id.
20 Id. at 798-799.
21 Id. at 639, 800-801.
22 Id. at 402-421.
23 Id. at 632-633.
24 Id. at 631-654.
25 Id. at 652-653.
26 Id. at 69-110; rollo (G.R. Nos. 194027-28), pp. 45-86.
27Rollo (G.R. Nos. 193969-70), pp. 108-109: rollo (G.R. Nos. 194027-28), pp. 84-85.
28Rollo (G.R. Nos. 193969-70), p. 99; rollo (G.R. Nos. 194027-28), p. 75.
29Rollo (G.R. Nos. 193969-70), pp. 80-81; rollo (G.R. Nos. 194027-28), pp. 56-57.
30Rollo (G.R. Nos. 193969-70), pp. 82-83; rollo (G.R. Nos. 194027-28), pp. 58-59.
31Rollo (G.R. Nos. 193969-70), p. 85; rollo (G.R. Nos. 194027-28), p. 61.
32Rollo (G.R. Nos. 193969-70), pp. 85-90; rollo (G.R. Nos. 194027-28), pp. 61-66.
33Rollo (G.R. Nos. 193969-70), pp. 104-105; rollo (G.R. Nos. 194027-28), pp. 80-81.
34Rollo (G.R. Nos. 193969-70), p. 96; rollo (G.R. Nos. 194027-28), p. 72.
35Rollo (G.R. Nos. 193969-70), pp. 105-108; rollo (G.R. Nos. 194027-28), pp. 81-84.
36Rollo (G.R. Nos. 193969-70), pp. 99-100; rollo (G.R. Nos. 194027-28), pp. 75-76.
37Rollo (G.R. Nos. 193969-70), pp. 111-113; rollo (G.R. Nos. 194027-28), pp. 87-89.
38Rollo (G.R. Nos. 193969-70), pp. 10-67; rollo (G.R. Nos. 194027-28), pp. 11-43.
39Rollo (G.R. Nos. 194027-28), pp. 123-124.
40 Id. at 31.
41Rollo (G.R. Nos. 193969-70), pp. 38-39.
42Geraldine Michelle B. Fallarme and Andrea Martinez-Gacos v. San Juan de Dios Educational Foundation, Inc., Chona M. Hernandez, Valeriano Alejandro III, Sister Conception Gabatino, D.C., and Sister Josefina Quiachon, D.C., G.R. Nos. 190015 & 190019, September 14, 2016; Da Jose, et al. v. Angeles, et al., 720 Phil. 451, 462 (2013); Sampaguita Auto Transport Corp. v. NLRC, et al., 702 Phil. 701, 709 (2013).
43Rollo (G.R. Nos. 193969-70), p. 645.
44 Id.
45 Should be January 17, 2004; id. at 633.
46 Should be January 10, 2004; id.
47 Id. at 645-646.
48 Id. at 647.
49 Art. 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible.
The father and, in case of his death or incapacity, the mother, are responsible for the damages caused by the minor children who live in their company.
Guardians are liable for damages caused by the minors or incapacitated persons who are under their authority and live in their company.
The owners and managers of an establishment or enterprise are likewise responsible tor damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions.
Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry.
The State is responsible in like manner when it acts through a special agent; but not when the damage has been caused by the official to whom the task done properly pertains, in which case what is provided in Article 2176 shall be applicable.
Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices, so long as they remain in their custody.
The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good tather of a family to prevent damage.
50 Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.
51Rollo (G.R. Nos. 193969-70), p. 193.
52 Id. at 633.
53 Id. at 334.
54 Id. at 194.
55 Id. at 278-281.
56 Should be January 17, 2004; id. at 633.
57 Should be January 10, 2004; id.
58 Id. at 646.
59 Id. at 50.
60 Id. at 193.
61 Id. at 42.
62 Id. at 335.
63 Id. at 274.
64 Id. at 335.
65Sanchez v. The Hon. CA, 345 Phil. 155, 190-191 (1997).
66Rollo (G.R. Nos. 194027-28), p. 53.
67Rollo (G.R. Nos. 193969-70), p. 194.
68Rollo (G.R. Nos. 194027-28), p. 111.
69Rollo (G.R. Nos. 193969-70), pp. 632-633.
70 Id. at 647.
71 Id. at 40.
72 Id. at 41-42.
73 Id. at 42.
74 Id. at 14.
75 Id. at 166-170.
76 Id. at 168.
77 Id.
78 Id. at 14-15.
79 Id. at 172-183.
80 Id. at 193.
81 Id. at 194.
82 G.R. No. 183947, September 21, 2016.
83 Id., citing Bautista v. CA, 379 Phil. 386, 399 (2000).
84Rollo (G.R. Nos. 194027-28), p. 111.
85 Id. at 64-66, 82.
86Rollo (G.R. Nos. 193969-70), pp. 39, 57.
87 G.R. No. 160408, January 11, 2016, 778 SCRA 56.
88 Id. at 67-68, citing Moreno, Jr. v. Private Management Office, 537 Phil. 280, 288 (2006).
89Rollo (G.R. Nos. 193969-70), p. 647.
90Rollo (G.R. Nos. 194027-28), p. 80.
91Rollo (G.R. Nos. 193969-70), pp. 47-49.
92Rollo (G.R. Nos. 194027-28), p. 111.
93Rollo (G.R. Nos. 193969-70), pp. 257-262.
94 Id. at 269-271.
95See Tolentino, A. Commentaries and Jurisprudence on the Civil Code of the Philippines, Vol. IV, p. 111.
96Rollo (G.R. Nos. 194027-28), p. 108.
97Diaz v. Encanto, G.R. No. 171303, January 20, 2016, 781 SCRA 231, 245.
98Velasco v. Manila Electric Company, et al., 148-B Phil. 204, 218-219 (1971).
99 45 Phil. 657 (1924).
100Rollo (G.R. No. 193969-70), pp. 62-64.
101 CIVIL CODE OF THE PHILIPPINES, Article 2232.
102 Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot be recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case ofa clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers and skilled workers;
(8) In actions for indemnity under workmen's compensation and employer's liability laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be reasonable.
103 CIVIL CODE OF THE PHILIPPINES, Articles 2199 and 2200; Kabisig Real Wealth Dev., Inc. and Fernando C. Tio v. Young Builders Corp., G.R. No. 212375, January 25, 2017.
104Rollo (G.R. Nos. 194027-28), p. 72.
105 Id. at 108.
106 Id.
107 Article 2226. Liquidated damages are those agreed upon by the parties to a contract, to be paid in case of breach thereof.
108ACS Development & Property Managers. Inc. v. Montaire Realty and Development Corporation, G.R. No. 195552, April 18, 2016, citing Philippine Charter Insurance Corporation v. Petroleum Distributors & Services Corporation, 686 Phil. 154, 164-165 (2012).
109Philippine Economic Zone Authority v. PILHINO Sales Corporation, G.R. No. 185765, September 28, 2016.
110See H.L. Carlos Construction, Inc. v. Marina Properties Corp., 466 Phil. 182 (2004).
111 Tolentino, A., Commentaries and Jurisprudence on the Civil Code of the Philippines, Vol. V, p. 662.
112 Amount of liquidated damages for 12 years at the rate of Php10,000.00 per day.
113 G.R. No. 187543 and G.R. No. 187580, February 8, 2017.
114 Article X - Escalation Clause
It is agreed that the contract price is already fixed and will not be subjected to escalation in case of increase in the cost of taxes, licenses, permit, fees, materials, including labor escalation. Labor escalation if mandated by law should be shouldered by the CONTRACTOR.
NOTE: If the value of 1US$ reaches Php58.00, then the OWNER will provide cash advances to the CONTRACTOR to be mutually agreed upon.; rollo (G.R. Nos. 194027-28), p. 111.
115Rollo (G.R. Nos. 193969-70), p. 45.
116 Id. at 46.
117 Section 10. No law impairing the obiigatwn of contracts shall be passed.
118Alvarez v. People of the Philippines, 692 Phil. 89 (2012); Llorente, Jr. v. Sandiganbayan, 350 Phil. 820, 838 (1998); Nolledo, Civil Code of the Philippines, 10th ed., Vol. V, p. 927; and Gonzales-Decano, Notes on Torts and Damages, 1992 ed., pp. 141 and 144.
119Marker v. Garcia, 5 Phil. 557, 559 (1906); See also Tolentino, Arturo M., Commentaries and Jurisprudence on the Civil Code of the Philippines, Vol. V, p. 642.
120 Art. 2199. Except as provided by law or by stipulation, one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. Such compensation is referred to as actual or compensatory damages.
121Choa Tek Hee v. Philippine Publishing Co., 34 Phil. 447 (1916); Algarra v. Sandejas, 27 Phil. 284 (1914); Marker v. Garcia, supra note 119.
122 240 Phil. 461 (1987).