SECOND DIVISION
BANGKO SENTRAL NG
PILIPINAS,
Petitioner,
G.R.
No.
139885
January 13, 2003 -versus-
JESUS G.
SANTAMARIA,
DOING BUSINESSUNDER THE
NAME AND
STYLEOF J.
SANTAMARIA
& ASSOCIATES,
Respondent.
D E C I S I O N
QUISUMBING,
J.:
For review on
certiorari is the Court of Appeals’ decision[1]
dated May 21, 1999, in CA-G.R. SP No. 47274, which dismissed the Bangko
Sentral ng Pilipinas’ (BSP) petition for review under Rule 43 of the
1997
Rules of Civil Procedure of the decision[2]
dated February 9, 1998 and Amended Award[3]
dated February 20, 1998 of the Construction Industry Arbitration
Commission
(CIAC), in CIAC Case No. 37-97. The appellate court affirmed in toto
the
CIAC decision ordering BSP to pay herein respondent Jesus G. Santamaria
(JGS), doing business under the name and style of J. Santamaria and
Associates
(JSA), unpaid billings amounting to P621,666.53 plus the corresponding
interest. Before us, BSP likewise assails the appellate court’s
resolution[4]
dated August 19, 1999 denying its motion for reconsideration.chanrobles virtuallaw libraryred
The facts, as culled
from the records, are as follows:
Petitioner BSP, thru
its Pre-qualification, Bids & Awards Committee (PBAC), invited
respondent
herein to submit a sealed proposal for Project Construction Management
(PCM) services of petitioner’s Regional Unit Building in Lucena City.
Initially,
respondent’s proposal amounted to P1,087,963.56 but this was later
reduced
to a lump sum fee of P676,044.35, broken down into P59,278.86
pre-construction
phase fee for two months and P616,765.49 construction/post-construction
phase fee for the succeeding eight (8) months, or a total service
period
of 10 months. chanrobles virtuallaw libraryred
On January 7, 1993,
BSP issued the Notice of Award to JSA for the said project.cralaw:red
On March 13, 1993, BSP
and respondent entered into a "Contract for the Project Construction
Management
Services,"[5]
with the following pertinent provisions:
ARTICLE I - SCOPE OF
WORKchanrobles virtuallaw libraryred
The PCM[6]
shall undertake the project management, design management and
construction
management, with the end-view of ensuring for the BANK a high degree of
quality control and inspection, and that all phases of the
construction,
such as architectural, structural, electrical, mechanical,
sanitary/plumbing,
airconditioning, civil works and other phases of work that are
necessary
to complete the project, are properly accomplished. Its services shall
supplement and/or complement administrative supervision by the BANK and
the PCM shall provide an on-site Construction Management Staff to
monitor
and closely coordinate the different phases of the construction work.cralaw:red
x x x
ARTICLE II- COMPENSATION
AND MANNER OF PAYMENT
For services to be rendered
by the PCM for ten (10) months, inclusive of the pre-construction,
construction
and post-construction periods, the BANK shall pay the amount of SIX
HUNDRED
SEVENTY SIX THOUSAND FORTY FOUR PESOS & 35/100 (P676,044.35)
Philippine
Currency, broken down as follows:chanrobles virtuallaw libraryred
Pre-Construction Phase
- P59,278.86 to be paid in two (2) equal payments: 1st payment to be
released
after the opening of bids while the 2nd payment will be released after
the issuance of the Notice of Award (NOA). chanrobles virtuallaw libraryred
Construction, Post-Construction
- P616,765.49 to be paid as progress Project Close-out Phase billings
on
the value of work accomplished
Including cost of
owner-furnished
materials. chanrobles virtuallaw libraryred
Supervision of construction
work beyond the original contract completion time, unless officially
authorized
by the BANK, shall not entitle the PCM to additional compensation and
shall
be undertaken by the PCM for his own account. chanrobles virtuallaw libraryred
Contract completion
time may, however, be extended only for the following reasons:
1. Delay
in delivery of owner-furnished materials
2. Change
in scope of work due to revisions
3. Hold
orders on areas requiring the decision of the BANK
4.
Unreasonably
delayed payments chanrobles virtuallaw libraryred
5. Force
majeure
Supervision by the PCM
during duly authorized extensions of contract time shall be compensated
on the basis of actual man-months rendered and approved rates
multiplied
by a factor of 1.5. chanrobles virtuallaw libraryred
x x x
On September 9, 1994,
BSP and C.T. Gumaru Construction (CTGC) entered into a "Contract for
the
Complete Supply of Labor and Materials for the Proposed Construction of
the Bangko Sentral Regional Unit Building in Lucena City." By virtue of
said agreement, CTGC bound itself to, among other things, undertake the
proposed construction of BSP’s building in Lucena City to be completed
within two hundred forty (240) calendar days, to be reckoned from ten
(10)
calendar days after CTGC’s receipt of the Notice to Proceed. chanrobles virtuallaw libraryred
Construction commenced
on September 29, 1994 with a target completion date on May 26, 1995,
after
CTGC received the Notice to Proceed on September 19, 1994.cralaw:red
The construction incurred
delays. On January 26, 1995, the construction was suspended pending
finalization
of revisions and issuance by BSP of Variation Orders.[7]
On June 28, 1995, BSP
issued Variation Order No. 1 for the relocation of the guardhouse, pump
room, underground water tank, front property fence and gate, and the
electrical
service pedestal. As a result, construction work came to a halt in the
areas affected by the order. chanrobles virtuallaw libraryred
On July 18, 1995, BSP
lifted the suspension and came out with Variation Order No. 2 covering
the increase in height of the additional columns, walls, additional
filling
works, and additional height of shoring for the second floor at the
main
building. Once more, work on the construction was suspended in the
affected
areas. chanrobles virtuallaw libraryred
On August 16, 1995,
BSP issued Variation Order No. 3 with certain revisions for the
exterior
site development.cralaw:red
In view of the Variation
Orders, BSP granted CTGC’s request for a 90-day extension of the
construction
period. The target completion date of the project was reset to April 9,
1996. chanrobles virtuallaw libraryred
On January 8, 1996,
CTGC requested the BSP for temporary suspension of the contract time
pending
resolution of CTGC’s unpaid billings, request for unit price adjustment
and the effect of the Expanded Value Added Tax on its contract.
Respondent
recommended denial of the request for lack of merit and suggested that
BSP rescind CTGC’s contract should the delay in the construction
schedule
reach the critical limit. chanrobles virtuallaw libraryred
On February 23, 1996,
respondent submitted to BSP claims for payment for extended services
from
May 27, 1995 to January 31, 1996 in the amount of P450,604.96 (stress
supplied).[8]
However, BSP took no action on said request for payment. chanrobles virtuallaw libraryred
Upon the expiration
of the April 9, 1996 extended completion date, CTGC had completed only
32.8884% of the project but continued working on the site, while JSA
continued
to provide project management services. chanrobles virtuallaw libraryred
On July 31, 1996, CTGC
pulled out of the project, having only completed only about one-third
or
33.1881% of the work. The following day, respondent likewise ceased to
provide management services. chanrobles virtuallaw libraryred
On September 10, 1996,
JSA submitted another claim for payment of extended services from
February
1, 1996 to April 9, 1996 in the amount of P62,451.05.[9]
Again, BSP played deaf and dumb to the request for payment. Respondent
sent several follow-up letters to BSP regarding this as well as the
previous
claim but without any response from BSP. chanrobles virtuallaw libraryred
On August 4, 1997, BSP
and CTGC entered into a "Supplemental Contract for the Proposed
Construction
of the Bangko Sentral Regional Unit in Lucena City." Under this new
agreement,
the project was to be completed within two hundred forty (240) calendar
days effective from receipt of the Notice to Resume Work. chanrobles virtuallaw libraryred
On August 14, 1997,
BSP issued to CTGC the Notice to Resume Work.cralaw:red
On September 25, 1997,
BSP advised respondent of CTGC’s resumption of work. It then requested
that respondent remobilize and deploy his resident/project engineer at
the project site. Respondent, however, refused to comply with BSP’s
request
pending resolution of his claims for payment for the extended services
previously rendered.cralaw:red
In its letter of October
27, 1997, BSP explained its position on the contract saying that
payments
were to be made on a lump sum basis. It promised to pay respondent
after
a definite milestone had been reached in the project. It again
reiterated
its request for remobilization of respondent’s resident/project
engineer.chanrobles virtuallaw libraryred
On November 12, 1997,
respondent filed a Request for Adjudication before the CIAC to demand
payment
from BSP of unpaid billings amounting to P746,867.93, inclusive of
interest
and arbitration fees. CIAC found respondent’s claims to be valid, thus:chanrobles virtuallaw libraryred
On the basis of the
above findings, it is the conclusion of this Arbitrator that the claim
of JGS is valid. Accordingly, BSP is ordered to pay JGS its first
billing
in the amount of P450,604.96, with interest at the rate of 6% per annum
from February 23, 1996 until it is fully paid; and its second billing
for
the amount of P62,451.05 with interest also at the rate of 6% per annum
from September 10, 1996 until it is fully paid. chanrobles virtuallaw libraryred
In view of the long
delay in the construction of the Project, the prices quoted by JGS are
no longer realistic. It would be unjust and inequitable for JGS to be
required
to complete the balance of the work which is estimated to be 66% in
accordance
with the unit rates made by JGS in his proposal. This Arbitrator would
have no basis for determining the appropriate adjustment taking into
consideration
cost escalation. The parties are, therefore, directed to negotiate and
determine the amount of cost escalation to be allowed JGS for work
already
performed and for performing the balance of 66% of the work. chanrobles virtuallaw libraryred
x x x
In view of the finding
that neither party acted in bad faith, no award for attorney’s fees is
made. Both parties are ordered to pay in equal share the cost of
arbitration
including the arbitrator’s fees.[10]chanrobles virtuallaw libraryred
The CIAC noted that
the contract itself had allowed additional compensations on authorized
extensions and that any delays in this case are solely attributable to
BSP first, due to design revision and second, due to its delay in
resolving
the issues raised by CTGC, so that the project completion date had gone
far beyond what the parties had contemplated. Hence, BSP should bear
any
resulting losses. chanrobles virtuallaw libraryred
Upon respondent’s request,
CIAC amended the first paragraph of the award to read as follows:
On the basis of the
above findings, it is the conclusion of this Arbitrator that the claim
of JGS is valid. Accordingly, BSP is ordered to pay JGS its first
billing
in the amount of P450,604.96, with interest at the rate of 6% per annum
from February 23, 1996 until it is fully paid; and its second billing
for
the amount of P62,451.05 with interest also at the rate of 6% per annum
from September 10, 1996 until it is fully paid; and the amount of
P108,610.52
for services rendered from April 10, 1996 to July 31, 1996.[11]
On March 11, 1998, BSP
filed a Motion for Correction/ Reconsideration, which the CIAC denied
in
its Order[12]
of March 16, 1998. chanrobles virtuallaw libraryred
BSP then filed a petition
for review before the Court of Appeals, but the latter affirmed in toto
the decision and amended award of the CIAC, to wit:
FOR ALL THE FOREGOING,
the instant petition is hereby DISMISSED and the challenged decision
dated
February 9, 1998 and Amended Award dated February 20, 1998, both of the
Construction Industry Arbitration Commission in CIAC Case No. 37-97
AFFIRMED
(sic) in toto. chanrobles virtuallaw libraryred
SO ORDERED.[13]
The Court of Appeals
found that while the PCM contract provided for a lump-sum payment for
services
rendered, it also provided for additional compensation for services
rendered
beyond the original completion date, if officially authorized by BSP.
Thus,
it is purely lump sum only when the project is accomplished on the
original
completion date. The appellate court likewise observed that the absence
of formal authorization to extend the completion date cannot be a
source
of comfort for BSP, as the contract was ambiguous on this point. It was
not comprehensive enough to include mechanisms for respondent to compel
BSP to issue an official authorization to extend the project period,
should
circumstances call for such an issuance. It noted that the delays were
clearly not attributable to respondent. Hence, it would be utterly
oppressive
to respondent if the "progress billing" provisions be strictly applied
as such presupposes that the project will be completed within the
targeted
completion date. The appellate court ruled that respondent should not
be
made to pay for the consequence of CTGC’s incompetence, negligence or
abandonment
of the project since respondent rendered full service within the
project
period. chanrobles virtuallaw libraryred
Hence, the instant petition,
alleging that the Court of Appeals erred in not finding that:
1. THE
PCM CONTRACT IS A LUMP SUM CONTRACT IN AND FOR THE SUM OF P676,044.35.cralaw:red
2. THE
COMPENSATION FOR THE PROJECT CONSTRUCTION MANAGEMENT SERVICES IN THE
CONSTRUCTION,
POST-CONSTRUCTION, AND PROJECT CLOSE-OUT PHASES IS TO BE PAID ON
PROGRESS
BILLINGS BASED ON THE VALUE OF WORK ACCOMPLISHED BY THE GENERAL
CONTRACTOR,
INCLUDING THE COST OF OWNER-FURNISHED MATERIAL. chanrobles virtuallaw libraryred
3
ADDITIONAL COMPENSATION FOR ALLEGED EXTENDED SERVICES RENDERED BY JSA
MAY
BE GIVEN ONLY IF THE SUPERVISION IS OFFICIALLY AUTHORIZED BY BSP.cralaw:red
4. THE
CONSTRUCTION INDUSTRY ARBITRATION COMMISSION’S COMPUTATION OF THE AWARD
IN FAVOR OF JSA’S IS NOT SUPPORTED BY EVIDENCE.[14]
Given these averments,
the only issue for our resolution is whether or not the Court of
Appeals
erred in holding that respondent is entitled to the payment claimed for
extended services under the PCM Contract. chanrobles virtuallaw libraryred
At the outset, we must
stress that petitioner is raising factual issues which are not proper
in
a petition for review. In an appeal via certiorari, only questions of
law
may be reviewed.[15]
We note that matters on the entitlement of respondent to additional
compensation
for the extended services and the provisions of lump-sum payment and
progress
billings on the PCM contract are factual issues which had been
exhaustively
discussed and ruled upon by CIAC and affirmed by the Court of Appeals.
It is well settled that factual findings of quasi-judicial bodies that
have acquired expertise are generally accorded great respect and even
finality,
if they are supported by substantial evidence.[16]
In this case, we find
no cogent reason to disturb the factual findings of the CIAC as
affirmed
by the Court of Appeals. Both the Court of Appeals and CIAC found that
the PCM contract is purely lump sum and payments be made based on
"progress
billings" only when it is completed within the original completion
date.
However, it also allowed additional compensations for services rendered
beyond the original completion date and as noted by the CIAC, any
delays
in this case are solely attributable to BSP, hence it should bear any
resulting
losses. Apparently, petitioner would insist on its own interpretation
of
the PCM contract. This cannot be, as it is not in accord with reason
and
the law. In interpreting a contract, its provisions should not be read
in isolation but in relation to each other and in their entirety so as
to render them effective, having in mind the intention of the parties
and
the purpose to be achieved. The various stipulations of a contract
shall
be interpreted together, attributing to the doubtful ones that sense
which
may result from all of them taken jointly.[17]chanrobles virtuallaw libraryred
Petitioner claims that
the monetary awards on the extended services of respondent from May 27,
1995 to July 31, 1996 granted by CIAC and affirmed by the Court of
Appeals
are incorrect and unsupported by evidence. Petitioner assails the CIAC
for relying on the affidavit of Jesus G. Santamaria and the
certification
of one Percival Pagador[18]
which indicate that the Project Manager, Project Engineer and Cost
Engineer
were all present during the extended period and not considering the
logbooks
it presented showing that only a resident engineer was on the site
during
the said period. Again, these are factual matters which are improper in
this petition. But we note the Court of Appeals already found that
petitioner
did not present any substantial evidence to refute the affidavit and
certification,
to wit: chanrobles virtuallaw libraryred
Petitioner BSP itself
alleges that in finding that the personnel of JGS were at the project
site
during the subject periods, CIAC merely relied on the affidavit of
Jesus
Santamaria (Exhibit 'A-29'), and the Certification dated January 27,
1998
(Exh. 'A-30'), of one Percival Pagador, Project Manager of CTGC. In
short,
BSP impliedly admits that this particular finding of the CIAC is
somehow
supported by evidence, albeit not of the quantum desired by it. We are
constrained to uphold such finding because We do not see in the instant
petition any countervailing proof that the same and the computation
made
on the basis thereof are actually inaccurate. chanrobles virtuallaw libraryred
As it appears, BSP is
itself not in a position to competently ascertain the truth of JGS’s
allegation
relative to the number and actual presence of its personnel at the
site.
For sure, on page 19 of its petition, BSP in fact admits that it "had
no
other way of checking the actual presence of JGS’s personnel at the
project
site". If this were so, then how can We fault the CIAC for relying on
the
figures furnished by JGS when no evidence whatsoever was put forward by
the petitioner to refute what JGS had presented as bases for its
monetary
claim?[19]chanrobles virtuallaw libraryred
Moreover, as pointed
out by CIAC, BSP had raised this issue belatedly, thus:
Moreover, the [BSP],
in its answer and in its special defenses, had not raised as issues the
matter of the number of Claimant’s technical personnel at the project
site,
nor of the basis of the computation of the Claimant’s billings. It
should
have done so since the Claimant’s exhibits were attached to his
original
claim. chanrobles virtuallaw libraryred
It is, therefore, too
late in the day for the [BSP] to raise Ground No. IV as basis for
seeking
a reconsideration of the Decision and of the Amended Award.[20]
Finally, we find that
the award of interest needs modification. Except on the amount of
P108,610.52
for services rendered form April 10, 1996 to July 31, 1996, for which
no
interest was awarded, the CIAC awarded interest at the rate of 6% per
annum
from the dates of demand, i.e. February 23, 1996 and September 10,
1996,
respectively, until fully paid. These referred to the first and second
billings amounting to P450,604.96 and P62,451.05, respectively.chanrobles virtuallaw libraryred
In Eastern Shipping
Lines, Inc. vs. CA, 234 SCRA 78 (1994), we laid down the following
guidelines
in the imposition of interest:
x x x
2. When an obligation,
not constituting a loan or forbearance of money, is breached, an
interest
on the amount of damages awarded may be imposed at the discretion of
the
court at the rate of 6% per annum. No interest, however, shall be
adjudged
on unliquidated claims or damages except when or until the demand can
be
established with reasonable certainty. Accordingly, where the demand is
established with reasonable certainty, the interest shall begin to run
from the time the claim is made judicially or extrajudicially (Art.
1169,
Civil Code) but when such certainty cannot be so reasonably established
at the time the demand is made, the interest shall begin to run only
from
the date the judgment of the court is made (at which time the
quantification
of damages may be deemed to have been reasonably ascertained). The
actual
base for the computation of legal interest shall, in any case, be on
the
amount finally adjudged. chanrobles virtuallaw libraryred
3. When the judgment
of the court awarding a sum of money becomes final and executory, the
rate
of legal interest, whether the case falls under paragraph 1 or
paragraph
2, above, shall be 12% per annum from such finality until its
satisfaction,
this interim period being deemed to be by then an equivalent to a
forbearance
of credit.[21]
Since this case does
not involve any obligation arising from loan or forbearance of money,
then
the interest should be imposed as follows:chanrobles virtuallaw libraryred
On the first billing
for P450,604.96 - 6% per annum computed from the date of demand on
February
23, 1996 while an interest of 12% per annum shall be imposed on such
amount
from the finality of this decision until the payment thereof. chanrobles virtuallaw libraryred
On the second billing
for P62,451.05 - 6% per annum computed from the date of demand on
September
10, 1996 while an interest of 12% per annum shall be imposed on such
amount
from the finality of this decision until the payment thereof. chanrobles virtuallaw libraryred
On the P108,610.52 for
services rendered from April 10, 1996 to July 31, 1996 - 6% per annum
computed
from the date of decision of CIAC on February 20, 1998 while an
interest
of 12% per annum shall be imposed on such amount from the finality of
this
decision until the payment thereof. chanrobles virtuallaw libraryred
WHEREFORE, the petition
is DENIED, and the decision of the Court of Appeals in CA G.R. SP. No.
47274 is AFFIRMED with the MODIFICATION that petitioner Bangko Sentral
ng Pilipinas is ordered to pay respondent Jesus G. Santamaria the
amount
of P450,604.96 plus interest thereon at the rate of 6% per annum
computed
from February 23, 1996; the amount of P62,451.05 plus interest thereon
at the rate of 6% per annum computed from September 10, 1996; and the
amount
of P108,610.52 plus interest thereon at the rate of 6% per annum
computed
from February 20, 1998. However, for any amount not yet paid after the
date of the finality of this decision, the rate of interest on the
payable
amount shall be increased to 12% per annum from the date of this
decision
until fully paid. Costs against petitioner. chanrobles virtuallaw libraryred
SO ORDERED.chanrobles virtuallaw libraryred
Bellosillo, J., (Chairman),
Mendoza, Austria-Martinez, and Callejo, Sr., JJ., concur.chanrobles virtuallaw libraryred
____________________________
Endnotes:
[1]
Rollo, pp. 43-60. Per Garcia, J., with Salas and Rivera, JJ.,
concurring.
[2]
Id. at 115-123.
[3]
Id. at 124-126.
[4]
Id. at 62.
[5]
Id. at 211-220.
[6]
The acronym stands for "Project Construction Manager."
[7]
Variation Order - authorizes/directs the execution of additional works
needed and necessary for the completion, improvement or protection of
the
project which were not included as items of work in the original
contract
(par. C1, 1, 4[a] of the Implementing Rules and Regulations of P.D. No.
1594, as amended), cited in Rollo, p. 313, footnote no. 1.
[8]
Rollo, pp. 236-237.chanrobles virtuallaw libraryred
[9]
Id. at 238.chanrobles virtuallaw libraryred
[10]
Id. at 80.
[11]
Id. at 83.
[12]
Id. at 85-88.
[13]
Id. at 59.
[14]
Id. at 10.
[15]
Palon vs. Nino, 353 SCRA 204, 214 ( 2001).
[16]
Philrock, Inc. vs. Construction Industry Arbitration Commission, 359
SCRA
632, 643-644 (2001).
[17]
Civil Code, art. 1374.
[18]
Records, Folder No. 2, Exh. A-29.chanrobles virtuallaw libraryred
[19]
Rollo, p. 59.
[20]
Id. at 129.
[21]
234 SCRA 78, 96-97 (1994). See also Rodzssen Supply Co., Inc. vs. Far
East
Bank & Trust Co., 357 SCRA 618, 624-625 (2001). |