nature and effect of obligations

7/24/2019 Nature and Effect of Obligations

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NATURE AND EFFECT OF

OBLIGATIONSFEDERAL BUILDERS, INC. vs. FOUNDATION SPECIALISTS, INC., G.R. No.

194507, Septe!e" #, $014, %. Pe"&'t&

G.R. No. 194507 September 8, 2014

FEDERAL BUILDERS, INC.,Petitioner,

vs.

FUNDA!IN S"ECIALIS!S, INC.,Respondent,

x - - - - - - - - - - - - - - - - - - - - - - - x

G.R. No. 194#21

FUNDA!IN S"ECIALIS!S, INC.,Petitioner,

vs.

FEDERAL BUILDERS, INC.,Respondent.

D E C I S I O N

"ERAL!A, J.:

Before the Court are two consoidated cases, na!e"# $%& Petition for review on certiorari under Rue

'( of the Rues of Court, doc)eted as *.R. No. %+'(, fied " /edera Buiders, Inc., assaiin0 the

Decision%and Resoution,1dated 2u" %(, 1% and Nove!er 13, 1%, respective", of the Court of

4ppeas $C4& in C4-*.R. C5 No. 6'+, which affir!ed with !odification the Decision3dated 7a" 3,1% of the Re0iona 8ria Court $R8C& in Civi Case No. +1-(9 and $1& Petition for review on

certiorari under Rue '( of the Rues of Court,doc)eted as *.R. No. %+':1%, fied " /oundation

Speciaists, Inc., assaiin0 the sa!e Decision'and Resoution,(dated 2u" %(, 1% and Nove!er

13, 1%,respective", of the C4 in C4- *.R. C5 No. 6'+, which affir!ed with !odification the

Decision:dated 7a" 3, 1% of the R8C in Civi Case No. +1-(.

8he antecedent facts are as foows#

On 4u0ust 1, %++, /edera Buiders, Inc. $/BI& entered into an a0ree!ent with /oundation

Speciaists, Inc. $/SI& where" the atter, as sucontractor, undertoo) the construction of the

diaphra0! wa, cappin0 ea!, and 0uide was of the 8rafa0ar Pa;a ocated at Sacedo 5ia0e,

7a)ati Cit" $the Pro


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with accrued interest fro! 4u0ust %, %++% pus !ora and exe!par" da!a0es with attorne"As

fees.+In its co!paint,/SI ae0ed that /BI refused to pa" said a!ount despite de!and and

itsco!petion of ninet"-seven percent $+@& of the contracted wor)s.

In its 4nswer with Countercai!, /BI cai!ed that /SI co!peted on" ei0ht"-five percent $6(@& of

the contracted wor)s, faiin0 to finish the diaphra0! wa and co!ponent wor)s in accordance with

the pans and specifications and aandonin0 the


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Both parties fied separate 7otions for Reconsideration assaiin0 different portions of the

C4Decision, ut to no avai.%'>ndaunted, the" suse?uent" eevated their cai!s withthis Court via

petitions for review on certiorari.

On the one hand, /SI asserted that the C4 shoud not have deeted the su! of P1+,(6(.

representin0 the cost of undeivered ce!ent and reduced the award of attorne"As fees

to P(,., since it was an undisputed fact that /BI faied to deiver the a0reed ?uantit" of

ce!ent. On the other hand, /BI fauted the C4 for affir!in0 the decision of the ower court insofar as

the award of the su! representin0 Biin0s 3 and ', the interest i!posed thereon, and the reN8 O/ P33,3('.'

NO8I8=S84NDIN* 8=48 8=E DI4P=R4*7 4 CONS8R>C8ED B /O>ND48ION

SPECI4IS8, INC. 4S CONCEDED DE/EC8I5E 4ND O>8-O/-SPECI/IC48IONS 4ND

8=48 PE8I8IONER =4D 8O REDO I8 48 I8S ON EPENSE.

II.

8=E CO>R8 O/ 4PPE4S CO77I88ED SERIO>S, RE5ERS4BE ERROR =EN I8

I7POSED 8=E %1@ E*4 IN8ERES8 /RO7 4>*>S8 3, %++% ON 8=E DISP>8ED

C4I7 O/ P%,1',:. ESS 8=E 47O>N8 O/ P33,3('.' DESPI8E 8=E /4C8 8=48

8=ERE 4S NO S8IP>48ION IN 8=E 4*REE7EN8 O/ 8=E P4R8IES I8= RE*4RD

8O IN8ERES8 4ND DESPI8E 8=E /4C8 8=48 8=EIR 4*REE7EN8 4S NO8 4 FO4N

OR /ORBE4R4NCE O/ 7ONE.F

III.

8=E CO>R8 O/ 4PPE4S CO77I88ED *R45E 4ND SERIO>S RE5ERS4BE ERROR

=EN I8 DIS7ISSED 8=E CO>N8ERC4I7 O/ PE8I8IONER NO8I8=S84NDIN*

O5ER=E7IN* E5IDENCE S>PPOR8IN* I8S C4I7 O/ P6,(61,(:.1+ 4S 4C8>4

D474*ES.

8he petition is part" !eritorious.

e a0ree with the courts eow and re


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e"ond the issues of the case, or fai to notice certain reevant facts which, if proper" considered,

wi


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construct the cappin0 ea! for the atterAs faiure to deiver the ce!ent as provided in their

a0ree!ent$Exh. FIF&. 4thou0h records show that there was !ention of revision of desi0n, there was

no evidence presented to show such revision re?uired ess a!ount of ce!ent than what was a0reed

on " paintiff and defendant.

8he seventh phase of the construction of the diaphra0! wa is the construction of the stee props

which coud e instaed on" after the soi has een excavated " the !ain contractor. hen

defendant directed paintiff to insta the props, the atter re?uested for a site inspection to deter!ine

if the excavation of the soi was finished up to the 'th eve ase!ent. Paintiff, however, did not

receive an" response.It ater earned that defendant had contracted out that portion of wor) to

another su-contractor $Exhs. FOF and FPF&. Nevertheess, paintiff infor!ed defendant of its

wiin0ness to execute that portion of its wor). %6

It is cear fro! the fore0oin0 that contrar" to the ae0ations of /BI, /SI had indeed co!peted its

assi0ned oi0ations, with the exception of certain assi0ned tas)s, which was due to the faiure of

/BI to fufi its end of the ar0ain.

It can si!iar" e deduced that the defects /BI co!pained of, such as the !isai0ned diaphra0!wa and the erroneous ocation of the rear dowes, were not on" anticipated " the parties, havin0

stipuated aternative pans to re!ed" the sa!e, ut !ore i!portant", are aso attriutae to the

ver" actions of /BI. 4ccordin0", considerin0 that the ae0ed defects in /SIAs contracted wor)s were

not so !uch due to the faut or ne0i0ence of the /SI, ut were satisfactori" proven to e caused "

/BIAs own acts, /BIAs cai! of P6,(61,(:.1+ representin0 the cost of the !easures it undertoo) to

rectif" the ae0ed defects !ust necessari" fai. In fact, as the ower court noted, at the ti!e when

/BI had evauated /SIAs wor)s, it did not cate0orica" pose an" o


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4nent /BIAs second assi0n!ent of error, however, e find !erit in the ar0u!ent that the %1@

interest rateis inappicae, since this case does not invove a oan or forearance of!one". In the

and!ar) case of Eastern Shippin0 ines, Inc. v. Court of 4ppeas,1e aid down the foowin0

0uideines in co!putin0 e0a interest#

II. ith re0ard particuar" to an award of interest in the concept of actua and co!pensator"

da!a0es, the rate of interest, as we as the accrua thereof, is i!posed, as foows#

%. hen the oi0ation is reached, and it consists in the pa"!ent of a su! of !one", i.e., a

oan or forearance of !one", the interest due shoud e that which !a" have een

stipuated in writin0. /urther!ore, the interest due sha itsef earn e0a interest fro! the ti!e

it is


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or extra


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8he ter! Fforearance,F within the context of usur" aw, has een descried as a contractua

oi0ation ofa ender or creditor to refrain, durin0 a 0iven period of ti!e, fro! re?uirin0 the orrower

or detor to repa" the oan or det then due and pa"ae.1(

/orearance of !one", 0oods or credits, therefore, refers to arran0e!ents other than oan

a0ree!ents, where a person ac?uiesces to the te!porar" use of his !one", 0oods orcredits

pendin0 the happenin0 of certain events or fufi!ent of certain conditions.1:Conse?uent", if those

conditions are reached, said person is entited not on" to the return of the principa a!ount paid,

ut aso to co!pensation for the use of his !one" which woud e the sa!e rateof e0a interest

appicae to a oan since the use or deprivation of funds therein is si!iar to a oan.1

8his case, however, does not invove an ac?uiescence to the te!porar" use of a part"As !one" ut a

perfor!ance of a particuar service, specifica" the construction of the diaphra0! wa, cappin0

ea!, and 0uide was of the 8rafa0ar Pa;a.

4 review of si!iar


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SO ORDERED.

DISDAD $. "ERAL!A

4ssociate 2ustice

4ctin0 Chairperson

E CONC>R#

RODRIGO RI(ERA vs. SPOUSES SAL(ADOR C)UA AND (IOLETA S. C)UA,

G.R. No. 1#445# *+oso'-&te/, %&&" 14, $015, %. Pe"e2

%OINT AND SOLIDAR3 OBLIGATION

SPOUSES RODOLFO BEROT AND LILIA BEROT vs. FELIPE C. SIAPNO, G.R.

No. 1##944, %' 9, $014, C%. Se"eo

OLONGAPO CIT3 vs. SUBIC ATER AND SEERAGE CO., INC., G.R. No.171$, A6st , $014, %. B"-o

ETINGUIS)8ENT OF OBLIGATIONS

nature and effect of obligations

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