THIRD DIVISION
G.R. No. 121484 January 31, 2005
MEA BUILDERS, INC., VICENTE LLAVE, ERNESTO YU and ANGEL YUANLIAN, Petitioners,
vs.
COURT OF APPEALS (FORMER FIFTEENTH DIVISION) and METROPOLITAN BANK AND TRUST COMPANY, Rrespondents.
D E C I S I O N
CORONA, J.:
Petitioners MEA Builders Inc., (MEA), Vicente Llave (Llave), Ernesto Yu (Yu), and Angel Yuanlian (Yuanlian) assail the August 30, 1994 decision1 of the Court of Appeals in CA-G.R. No. 40146 which reduced the amount awarded to them by way of counterclaim awarded to them by the Makati Regional Trial Court, Branch 147 in its July 18 1991 decision2 in Civil Case No. 8532.
On July 15, 1982, MEA entered into a contract3 with Capital Resources Corporation (CRC), for the construction of housing units for CRC’s residential subdivision in Multinational Village, Parañaque, Metro Manila in consideration of ₱39,256,880, payable in cash and negotiable securities. Under the contract the cash portion shall be payable in 90-day stand-by letters of credit from a bank.
On August 11, 1982, MEA, CRC and private respondent Metropolitan Bank and Trust Company (Metrobank) entered into a tripartite agreement4 in which it agreed to issue the whereby stand-by letters of credit would be issued to cover the cash portion of the payments on completed housing units in the MEA and CRC July 15, 1982 contract, subject to the following conditions:
i) The houses, townhouses, and duplexes shall have already been completed, as attested to by the Certificate of Completion duly signed by the Contractor and accepted by the owner or the owner’s representative, Metrobank representative, and the Home Financing Corporation;
ii) That the letters of credit shall be in amounts not less than ₱2,000,000.00 for each letter of credit, in other words, the aggregate total of the contracted price of the completed units should not fall below ₱2,000,000.00 per letter of credit;
iii) That the letter of credit shall be a domestic, assignable, divisible, and irrevocable letter of credit payable ninety (90) days from date of issuance and/or opening of the letter of credit and the drawdown date can be advanced to the date of receipt of payment by Metrobank from the National Home Mortgage Finance Corporation/other entities for units covered by the particular of credit; and,
iv) That the owner shall secure an HFC Guarantee in favor of Metrobank to cover the amounts of these letters of credit which are fully secured by real estate mortgages as provided for in the agreement.
On the same day, MEA and CRC amended the July 15, 1982 construction agreement, by increasing the contract price to ₱45,552,950.5
In a letter6 dated August 9, 1982, addressed to Home Financing Corporation (HFC), Metrobank expressed its willingness to finance the construction of the CRC Multinational Village project, up to the amount of ₱190 Mmillion, thru letters of credit.
On September 13, 1982, MEA wrote to Metrobank asking if it couldan obtain the desired stand-by letters of credit even without the HFC guarantee.. 7
In its reply8 dated September 30, 1982, Metrobank advised MEA that the letters of credit shall could be issued only upon submission of the HFC guarantee and only for completed houses/townhouses/duplex units.
On January 14, 1983, with the construction work under the tripartite agreement already in progress, MEA and CRC executed another contract,9 this time for the horizontal development of another parcel of land also in Multinational Village. Under the contract, MEA willas to perform landfill and other stipulated infrastructural work for ₱7,755,000, excluding the cost of filling materials which MEA would advance chargeable to CRC.
On January 18, 1983, CRC submitted to HFC a summary of Progress Report10 of work accomplished by MEA stating its accomplishment to be worth ₱2,691,685.45.
On February 11, 1983, HFC issued an official resolution approving the ₱120,000,000 cash guarantee.11
On March 1, 1983, in order to increase its capital, MEA secured from Metrobank an advance of ₱3,000,000 from the amounts which may become due to it under the tripartite agreement. Metrobank advanced said the amount on the condition that it would be nominally be covered by a promissory note12 and by a suretyship agreement to be executed by petitioners Llave, Yu, and Yuanlian. The suretyship agreement13 was executed on March 3, 1983.
The promissory note was twice extended. When MEA completed construction of several housing units entitling it to ₱3,330,277.60 from Metrobank, the amount was applied as follows:
a. partial liquidation of the ₱3,000,000.00 advance made by MEA in the amount of P1,5000,000.00;
b. various other accounts payable by MEA to or assumed by it in favor of Metrobank in the amount of ₱1,253,511.14;
c. balance received by or credited to the account of MEA in the amount of ₱576,716.45.
As a result of the partial liquidation, petitioners executed a new promissory note14 in favor of Metrobank for the remaining ₱1,500,000 balance out of the original ₱3,000,000.
By May 10, 1983, MEA finished 45 single detached units, as evidenced by cCertificates of Ccompletion, authenticated by CRC, MEA, Metrobank and HFC.
On November 4, 1983 MEA informed Metrobank of the suspension of its operations and that it would resume operations after arrangements regarding the letter of credit had beenwere finalized.
Metrobank delivered paid ₱3,274,263.22 for the 45 finished detached houses through, ― ₱1,830,227.60 in irrevocable domestic letter of credit in the amount of ₱1,830,227.60 and ₱1,444,035.62 in cash payment As evidenced by a certificate of full payment.15
,
On January 31, 1984 MEA informed Metrobank and CRC of its work resumption. 16
In its February 9, 1984 reply,17 Metrobank advised MEA to hold off construction work until after CRC would have sold a substantial number of the completed units. because iIt would asbe to their mutual benefit if theyto reduce their exposure to the project.
In a letter18 dated June 11, 1984, MEA objected to the indefinite suspension and demanded payment for all their work accomplishments, with plus interests and charges.
In the meantime, MEA defaulted on the ₱1.5 Mmillion promissory note which matured February 6, 1984. Hence, on September 25, 1984, Metrobank instituted Civil Case No. 8532 for the recovery of the amount covered by the promissory note plus interests in the sum of ₱1,800,840.
In their answer with compulsory counterclaim, MEA and other petitioners admitted the execution of the promissory note as well as the continuing suretyship. However, they denied any liability to Metrobank on the ground that said the promissory note and continuing suretyship failed to reflect the true intent and agreement of the parties. They contended that the real agreement of the parties was not that of a "straight" or simple loan payable within a fixed period of time but an advance payment scheme tied up with the agreements relative to the execution of construction work in the CRC-Multinational Village Project, to be liquidated from payments expected to become due to MEA. In support thereof, they also invoked the tripartite agreement among CRC, MEA and Metrobank., but that of an advance payment tied up with the tripartite agreement which is to be liquidated from payments expected to become due to MEA relative to the execution of construction work in the CRC-Multinational Village Project.
On July 18, 1991, the trial court decided in favor of MEA and rendered a decision in favor of MEA: found that the promissory note covering the ₱1.5 million was not really a "straight" or simple loan. It ruled:
xxx the Court finds that the preponderance of evidence is overwhelmingly in favor of the version of defendant MEA that the amount of ₱1.5 million covered by the promissory note Exhibit A, which is the subject of the "Complaint" is an advance tied up with agreements relative to the execution of construction work in the CRC Multinational Village which is to be liquidated from payments expected to become due to defendant MEA in accordance with the Tripartite Agreement entered into by and among plaintiff bank, defendant MEA and CRC.
xxx xxx xxx
xxx xxx xxx In view of the blunt refusal without any legal justification whatsoever of the plaintiff bank to comply with its obligation to finance the construction work undertaken by defendant MEA as agreed upon in the Tripartite Agreement by stopping the resumption of work by defendant MEA on the still unfinished housing units and it appearing that the supposed "straight" or simple loan of ₱1.5 million covered by Exhibit "A", which is the subject of the cause of action in the "Complaint" is not really a "straight" or simple loan but is actually an advance tied up with the Tripartite Agreement and the construction agreements to be liquidated later with the amounts of money due to defendant MEA by virtue of the construction of the housing units involved in this case, which fact was deliberately concealed by plaintiff bank in its "Complaint", the Court finds that plaintiff bank’s cause of action is clearly unfounded for which reason it is, therefore, liable for attorney’s fees.
WHEREFORE, in view of all the foregoing, the Court hereby renders judgment in favor of the defendants and against the plaintiff, ordering the latter to pay the former:
1) the sum of ₱18,200,000.00 representing the actual fair market value of construction work already performed by defendant MEA including the cost of filling materials advanced by it at the CRC Multinational Village minus the amount of P1.5 million covered by the promissory note dated November 7, 1983;
2) the sum of ₱9,000,000.00 as actual and consequential damages suffered by defendant MEA up to April 1984;
3) the sum equivalent to three percent (3%) per month on the sums due as above stated, starting May 1984 until the above-mentioned amounts are fully paid;
4) the sum equivalent to 10% of all amounts found due to the defendants;
5) dismissing the plaintiff’s complaint.
With Ccosts.19
On appeal, the Court of Appeals modified the decision of the trial court:
xxx xxx xxx
To us, the ₱18,200,000.00 assessment by the court a quo was an over -computation.
xxx xxx xxx
Also, the agreement between CRC and MEA Builders made mention of ₱39,256,880.00 as the total contract price; method of payment through cash (standby Letters of Credit from appellant bank); an HFC guarantee, but not a pre-condition to the contract; taxes; a system of retention; contractors work guarantee; completion of project; and final Certificate of Completion, the latter pre-supposing a Certificate of Completion stating that the project has been completed and accepted. This was amended on August 11, 1982, by increasing the contract price to ₱45,552,950.00.
The horizontal project, on the other hand, was stipulated only between CRC and MEA Builders, and mentioned filling materials to be advanced by MEA Builders, but to be reimbursed by CRC through a Letter of Credit from METROBANK; a schedule of completion; a contract amount of ₱7,755,000.00; a schedule of payment; and acceptance and final payment through a Final cCertificate of Completion, and thereafter issuance of Letters of Credit as payment.
We also have before us the Progress Report with the corresponding amounts for the period ending January 18, 1983 (Exhs. 18 and 18-A), for ₱2,691,685.45; the Progress Report (Exh. 20), also dated January 18, 1983 for ₱6,384,184.00; and then finally, the Progress Report dated January 20, 1983 (Exh. 19), horizontal construction, for ₱6,889,560.30. Obviously, Exh. 20 is only a duplicate original of the Progress Report dated January 18, 1983. This means a total of 120 units were built for Lots 9, 10 and 4. Built were townhouses of two models, duplex and single detached units. Admittedly, a total of 45 single detached housing units were already paid (Exh. M) in the total amount of ₱3,274.263.82.
Necessarily, the appellant bank should only be held answerable for an amount definitely less than ₱18,200,000.00, or the cost of the units being mentioned in Exh. 20, less ₱3,274,263.22, and still less the balance of the unpaid loan.1awphi1.nét
We go to the P9 Million actual and consequential damages until April 1984, which the court computed. It must have been misled by the testimony of Vicente Llave (TSN, pp. 46-49, Aug. 27, 1987) who made a sweeping statement that the P9 Million represents unrealized profits and 3% per month interests. We add the letter, Exh. 14, dated June 11, 1984, by MEA Builders to the appellant bank which mentioned non-recovery of the capital outlay because of devaluation and high prices, expected "margin", and liability for interests and borrowings, both from METROBANK and other investment houses.1ªvvphi1.nét
xxx xxx xxx
It is not the fact of winning alone that entitles a party to recover attorney’s fees but rather the attendance of any of the exceptional circumstances being enumerated in Art. 2208, otherwise, we would be putting a premium on the right to litigate which should not be so (Rizal Surety and Ins. Company, p. 14, Appellants’ Reply Brief). Article 2208 has no applicability in this case.
Modification of the judgment is the only option.
THE FOREGOING CONSIDERED, judgment is hereby rendered as follows:
Directing the plaintiff-appellant to pay MEA Builders Corporation ₱6,308,484.54 representing the value of the townhouses, duplex and single detached units, Exh. 20 (Progress Report dated January 18, 1983) less ₱3,274,263.22 representing payment of the 45 duplex and single detached units, Exh. M; and further less the loan of ₱1.5 Million (Nov. 7, 11983 Promissory Note, Exh. 10) with 26% interest per annum and 12% per annum penalty; and with costs against the appellants.20
The Ssubsequent motion for reconsideration was denied on August 11, 1995.
Petitioners are now before theis Court with the following assignments of error:
I.
THE DECISION DATED 30 AUGUST 1994 AND RESOLUTION DATED 11 AUGUST 1995 ISSUED BY THE HONORABLE COURT OF APPEALS ARE BASED ON A MISAPPREHENSION OF THE DOCUMENTARY EVIDENCE PRESENTED WHICH RESULTED IN FINDINGS AND CONCLUSIONS INCONSISTENT WITH ITS OWN AND WITH THAT OF THE TRIAL COURT.
A. THE HONORABLE COURT OF APPEALS ERRED IN CONCLUDING THAT THE VALUE OF THE WORK ACTUALLY ACCOMPLISHED BY PETITIONER MEA BUILDERS, INC. AND FOR WHICH IT HAS NOT BEEN PAID IS ONLY ₱6,308,454.54.
B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT PETITIONERS ARE NOT ENTITLED TO ACTUAL AND COMPENSATORY DAMAGES.
C. THE HONORABLE COURT OF APPEALS ERRED IN CONCLUDING THAT THE AMOUNT OF ₱3,274,263.22 REPRESENTING THE VALUE OF FORTY-FIVE (45) DUPLEX AND SINGLE-DETACHED UNITS SHOULD BE DEDUCTED FROM THE AMOUNT DUE TO PETITIONERS DESPITE IT HAVING BEEN ALREADY PREVIOUSLY DEDUCTED.
II.
THE COURT OF APPEALS ERRED IN RULING THAT PETITIONERS ARE NOT ENTITLED TO ATTORNEY’S FEES IN THE AMOUNT SO FOUND BY THE LOWER COURT DESPITE THE FACT THAT THEY WERE COMPELLED TO PROTECT THEIR RIGHTS IN VIEW OF THE UNFOUNDED AND BASELESS ACTION FILED BY PRIVATE RESPONDENT METROBANK.
III.
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT PRIVATE RESPONDENT BANK IS ENTITLED TO INTEREST AND PENALTY CHARGES ON THE AMOUNT PROVIDED FOR IN THE SUBJECT PROMISSORY NOTE.
Obviously, the resolution of these issues will call foinvolve ar determination of facts. It is not the function of theis Supreme Court to analyze or weigh all over again evidence already considered in the proceedings below, its jurisdiction being limited to reviewing only errors of law that may have been committed by the lower courts.21
Under Rule 45, only questions of law may be raised. This rule, however, admits certain exceptions. The findings of fact of the Court of Appeals, which are as a general rule deemed conclusivare generally conclusive bute, may admit ofbe reviewed by this Court when: (1) when the factual findings of the Court of Appeals and the trial court are contradictory; (2) when the findings are grounded entirely on speculation, surmises, or conjectures; (3) when the inference made by the Court of Appeals from its findings of fact is manifestly mistaken, absurd, or impossible; (4) when there is grave abuse of discretion in the appreciation of facts; (5) when the appellate court, in making its findings, goes beyond the issues of the case, and such findings are contrary to the admissions of both appellant and appellee; (6) when the judgment of the Court of Appeals is premised on a misapprehension of facts; (7) when the Court of Appeals fails to notice certain relevant facts which, if properly considered, will justify a different conclusion; and (8) when the findings of fact of the Court of Appeals are themselves contrary to those of the trial court orconflicting; (9) when the findings of fact are mere conclusions without citation of the specific evidence, or where the facts set forth by the petitioner are not disputed by respondent, or where on which they are based; and (10) when the findings of fact of the Court of Aappeals are premised on the absence of evidence but such findings are contradicted by the evidence on record. 22
In the present case, there is variance in the computation of the amount MEA is entitled to under the tripartite agreement but tThe findings of the appellate court awere not without basis.
The appellate court reduced the award of counterclaim when, upon perusal of the records, it discovered, that the trial court failed to consider certain matters in the computationfactors which should have would considerably reduced the amount due to MEA.1awphi1.nét
PertinentlySpecifically, the obligation of Metrobank was limited to thoseat embodied in the tripartite agreement. It is which clearly provided in said agreement that the issuance of the letter of credit was conditioned on the completion of the houses/townhouses/ duplex units as attested to by the certificate of completion duly signed by the contractor and accepted by the owner or the owner’s representative, Metrobank representative, and the Home Financing CorporationHFC. As reflected in the Progress Report dated January 18, 1983,23 120 townhouses/duplex/single detached units covered by MEA and CRC’s construction project were built. Out of the 120 units, Metrobank had already paid 45 units amounting to ₱3,274,263.82.24 Certainly, the amount paid should have been deducted from the cost of the 120 units indicated in the Progress Report or the ₱18,200,000.00 adjudged by the trial court.
Furthermore, the trial court’s computation of the award of the counterclaim The trial court erred when it included in its computation, petitioner’s claim for payment for the horizontal project amounting to ₱7,755,000.00. But to which Metrobank wais a complete stranger to the project and had nothing to do with it. It was thus unfair to hold it liable for that amount.
;Likewise, the trial court included in its computation and the cost of filling materials advanced by MEA. whichBut this iwas ultimately chargeable to CRC and not to Metrobank. The foregoing amounts, including the ₱1.5 Million unpaid loan MEA obtained from Metrobank, should have accordingly been deducted from the liability of the latter under the tripartite agreement.
Of all the evidence presented by MEA as to its alleged accomplishments, only the January 18, 1983 progress report25 was actually accepted by CRC. This progress report pertained to 55 vertical units valued at ₱6,308,484.54 and of the said number of vertical units, 45 were already paid in the amount of ₱3,274.263.22.26 Thus, said amount should be deducted together with the ₱1,500,000 unpaid loan MEA obtained from Metrobank.1a\^/phi1.net
On the award of damages, Tthe appellate court also correctly deleted the award of ₱9,000,000,000,000 actual compensatory damages. In legal contemplation, the term "damages" is the sum of money which the law awards or imposes as a pecuniary compensation, a recompense, or satisfaction for an injury done or a wrong sustained as a consequence either of a breach of a contractual obligation or a tortioustortuous act. Here, aside from the fact that we find neither breach of contractual obligation nor bad faith on the part of Metrobank when it suggested the suspension of construction work for the protection of the parties’ mutual interests, petitioners failed to establish actual or compensatory damages with a reasonable degree of certainty. The trial court’s sole basis for the award of compensatory damages was the testimony of petitioner Llave who made a sweeping statement that the ₱9,000,000 million representeds unrealized profits plus 3% monthly interests. This is was not sufficient. The award of actual or compensatory damages could not be sustained without any tangible document any proof to support such claim.27
Regarding the award of attorney’s fees, suffice it to state that we find no sufficient justification for such an award. AThe grantward of attorney’s fees is the exception rather than the rule, hencehence, it is necessary for the trial court to make findings of fact and law, which would bring the case within the exception and justify the grant of the award.28
All told, petitioner failed to show establish the presence of any of the exceptions to justify theis Court’s review of the factual findings of the Court of Appeals.1awphi1.nét Verily wWe find no reversible error committed by the Court of AppealsCA in limiting private respondent’s liability to the value of the completed houses/townhouses/duplex units attested to by the cCertificate of Ccompletion as embodied in the tripartite agreement.
Finally, the CourtWe notes that the verification and certification against forum -shopping in the instant petition was executed and signed by counsel instead of petitioners themselves as required by Revised Circular No. 28-91 which took effect April 1, 1994, now embodied in Rule 45, section 4(e) in relation to Rule 7, section 5 of the Rules of Court. This lapse alone is sufficient to cause the outright dismissal of the instant petition.
WHEREFORE, the petition is hereby DENIED and the August 30, 1994 decision of the Court of Appeals in CA-G.R. No. 40146 is affirmed in toto.
SO ORDERED.
RENATO C. CORONA
Associate Justice
WE CONCUR:
JOSE C. VITUG
Associate Justice
|
ARTEMIO V. PANGANIBAN
Asscociate Justice
Chairman |
ANGELINA SANDOVAL-GUTIERREZ
Associate Justice |
CONCHITA CARPIO MORALES
Asscociate Justice |
CANCIO C. GARCIA
Associate Justice
A T T E S T A T I O N
I attest 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
Chairman, Third Division |
JOSE C. VITUG
Asscociate Justice |
C E R T I F I C A T I O N
Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairman’s Attestation, 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.
HILARIO G. DAVIDE, JR.
Chief Justice
Footnotes
1 Penned by Associate Justice Bernardo LL. Salas and concurred in by Associate Justices Alfredo L. Benipayo and Ricardo P. Galvez of the Eleventh Division.
2 Penned by Judge Teofilo L. Guadiz, Jr.
3 Annex "D," Rollo, pp. 94-108.
4 Annex "F," Rollo, pp. 115-117.
5 Annex "E," Rollo, pp, 109-114.
6 Exhibit "15," Records, p. 82.
7 Exhibit "16," Records, p. 84.
8 Exhibit "17," Records, p. 85.
9 Exhibit "6," Records pp. 12-22.
10 Annex "G- H," Rollo, pp. 118-122.
11 Exhibit "9-B," Records.
12 Annex "I," Rollo, p. 123.
13 Annex "J," Rollo, p. 124.
14 Annex "M," Rollo, p. 175.
15 Exhibit "M," Records, p. 387.
16 Exhibit "12," Records, p. 78.
17 Exhibit "13," Records, p. 79.
18 Exhibit "14," Records pp. 80-81.
19 Rollo, pp. 239-240.
20 Rollo, pp. 74-79.
21 Philippine National Bank vs. Court of Appeals, 32481 SCRAPhil. 71420 ([2000]).
22 Sacay v. Sandiganbayan, 226 Phil. 496, as cited in Celestinae Naguiat vsv. CA and Aurora Queaño, G.R. No. 118375 , 3 October 3, 2003, 412 SCRA 591.
23 Exhibit "20," Original Records, pp. 90-91.
24 Exhibit "M," Records, pp. 387-389.
25 Exhibit "20," Original Records, pp. 90-91.
26 Exhibits "M," supra; Exhibit "O," Records, pp. 387-389.
27 People vs. Gadim, Jr., 331 SCRA 345387 Phil. 359 [(2000]).
28 SCC Chemicals Corporation vs. Court of Appeals, G.R. No. 128538 , 28 February 2001, 353 SCRA 70.
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