On August 13, 1992, the National Power Corporation (NAPOCOR) awarded the project of rehabilitating the Caliraya Glory Hole Service Spillway (CGHSS) at Caliraya Reservoir, Lumban, Laguna to GROGUN INC. (GROGUN). Among several contractors, GROGUN offered the most workable and viable design at the lowest price.chanrob1es virtua1 1aw 1ibrary
The primary purpose of the Caliraya Reservoir was to keep the lake’s water lever within the specified limit not only for the protection of the dam but also to prevent the flooding of the towns surrounding the dam. Ever since the Caliraya Reservoir and the CGHSS were built in 1930, the CGHSS was regularly used to flush down excess water from the lake whenever the lake’s water level reached critical level. Numerous leaks, however occurred in the vertical shaft of CGHSS.
It appears that prior to 1992, NAPOCOR engaged ALA Industries Corporation to repair the CGHSS. The design and method, however adopted by ALA Industries Corporation were not workable. Leaks recurred in the vertical shaft of the CGHSS immediately after the project was accepted by NAPOCOR.
NAPOCOR failed to pay for the costs of the rehabilitation despite the completion of the project. Thus, on March 22, 1994, GROGUN filed a request for adjudication before the Construction Industry Arbitration Commission (CIAC), docketed as CIAC Case No. 06-94, 1 pursuant to the arbitration clause 2 in their Contract. 3 However, finding no stipulation in the contract of the parties providing for arbitration as a mode of settling disputes, CIAC dismissed the case. 4
On September 10, 1996, GROGUN filed an action for collection of sum of money and damages before the Regional Trial Court of Quezon City, Branch 216, which was docketed as Civil Case No. Q-96-28731. 5 NAPOCOR filed its Answer with Counterclaim 6 asserting that the poor quality of GROGUN’S workmanship led to numerous defects in the project.
After the pre-trial conference, the parties filed a Joint Manifestation and Motion 7 submitting their dispute to arbitration under Republic Act No. 876 8 taking into consideration the highly technical nature of their contract. The Arbitration Tribunal was composed of Atty. Alfredo F. Tadiar as Chairman, Engineer Carlito T. Kingkay and Atty. Alejandro A. Padaen as members.chanrob1es virtua1 1aw 1ibrary
On May 14, 1998, the Arbitration Tribunal rendered a decision, the decretal portion of which reads:chanrob1es virtual 1aw library
WHEREFORE, judgment is hereby rendered and AWARD is made as follows:chanrob1es virtual 1aw library
FOR THE PLAINTIFF-CONTRACTOR:chanrob1es virtual 1aw library
Defendant is directed to pay the Plaintiff the following amounts on its various claims:chanrob1es virtual 1aw library
P1,440,000.00 as bonus for early completion of works under Article IV, Clause 6 of their contract.
P670,369.61 as cost of standby or downtime overhead cost of skeleton force during the forced work suspension in November, 1992.
P1,447,670.00 as the value of the accomplished works of the Plaintiff that were destroyed by the waters released by the opening of the spillway gates.
P3,558,039.61 Total claims awarded to the Plaintiff-Contractor.
FOR THE DEFENDANT-OWNER
Plaintiff is directed to pay the Defendant its counterclaim:chanrob1es virtual 1aw library
P1,047,850.00 as the cost of rectification of the defective works performed by Plaintiff
OFFSETTING the two amounts mutually due to each other; Defendant-Owner, National Power Corporation shall pay the net amount remaining of P2,510,189.61 to the Plaintiff-Contractor, GROGUN, INC. 9
GROGUN submitted a copy of the above decision to the trial court.chanrob1es virtua1 1aw 1ibrary
On May 20, 1998, GROGUN filed before the trial court a Manifestation and Motion to Modify the Arbitral Decision, alleging that the Arbitration Tribunal did not include in its Decision a provision on who should bear the costs of arbitration pursuant to the parties’ Agreement on Arbitration Expenses. 10
In its Comment, NAPOCOR argued that the foregoing Motion is premature because the Arbitration Tribunal had not submitted its recommendation to the trial court and the same had not been approved or adopted by the trial court. 11
In the meantime, GROGUN filed another Manifestation 12 asking the trial court to grant its Manifestation and Motion to Modify the Arbitral Award since NAPOCOR did not file a motion to vacate, modify or correct the same within one month from the time it was rendered, pursuant to Section 23 of the Arbitration Law.
Confirmation of Award. — Any time within one month after the award is made, any party to the controversy which was arbitrated may apply to the court having jurisdiction, as provided in section twenty-eight, for an order confirming the award, and thereupon the court must grant such order unless the award is vacated, modified or corrected, as prescribed herein. Notice of such motion must be served upon the adverse party or his attorney as prescribed by law for the service of such notice upon an attorney in action in the same court. (Emphasis supplied
On September 15, 1998, the trial court issued an Order, viz:chanrob1es virtual 1aw library
WHEREFORE, the Arbitral Decision dated May 14, 1998 is hereby ordered modified as follows:chanrob1es virtual 1aw library
a) the Arbitrators’ Fees of P420,836.28 shall be shared by defendant NAPOCOR and plaintiff GROGUN in proportion to their respective claims, i.e., 69.94% and 30.06%, respectively;
b) the defendant NAPOCOR is hereby ordered to reimburse the plaintiff GROGUN the following amounts: (1) P294,332.89 representing the Arbitrators’ Fees; and (2) P25,000.00 representing the agreed 50% share of NAPOCOR in the Administrative Costs; and
c) the rest of the Arbitral Decision is hereby confirmed and maintained. 13
NAPOCOR’s Motion for Reconsideration of the said Order 14 was denied. 15
Thus, NAPOCOR appealed to the Court of Appeals raising the following’ errors:chanrob1es virtual 1aw library
THE REGIONAL TRIAL COURT ERRED IN AFFIRMING THE DECISION OF THE ARBITRAL TRIBUNAL DESPITE THE FACT THAT A COPY OF THE ARBITRAL DECISION DATED MAY 14, 1998 SUBMITTED BY GROGUN WAS NOT VERIFIED.chanrob1es virtua1 1aw 1ibrary
THE REGIONAL TRIAL COURT ERRED IN ADOPTING THE DECISION OF THE ARBITRAL TRIBUNAL ALTHOUGH THE FINDINGS OF THE ARBITRAL TRIBUNAL WERE NOT SUBSTANTIATED BY LAW AND EVIDENCE. 16
Instead of filing an Appellee’s Brief, GROGUN filed a Motion to Dismiss 17 the appeal based on the following grounds: (a) NAPOCOR failed to file the record on appeal required in an arbitration proceeding under R.A. No. 876; (b) NAPOCOR failed to contest the award before the Arbitration Tribunal or the trial court; (c) NAPOCOR’s two assigned errors were not raised in the trial court and (d) the appeal raised only questions of law.
On March 30, 2001, the Court of Appeals rendered a decision, 18 reversing the Orders of the Regional Trial Court in Quezon City, Branch 216 in Civil Case No. Q-96-28731, dated September 15, 1998 and January 8, 1999 and remanded the case to the trial court for further proceedings. 19
GROGUN filed a Motion for Reconsideration 20 of the said decision which was denied by the Court of Appeals in its Resolution dated November 21, 2002. 21
Hence, this petition for review on the following assignment of errors:chanrob1es virtual 1aw library
COURT OF APPEALS PATENTLY ERRED IN NOT ISSUING THE APPEAL, DESPITE:chanrob1es virtual 1aw library
1. THE DEFECT OF NOT HAVING FILED A RECORD ON APPEAL WHICH IS REQUIRED IN SPECIAL PROCEEDINGS SUCH AS ARBITRATION UNDER REPUBLIC ACT NO. 876;
2. THE FILING OF THE BRIEF HAVING BEEN DELAYED FOR MORE THAN ONE (1) YEAR FROM THE NOTICE OF APPEAL;
3. IT HAVING FAILED TO REPUDIATE THE ARBITRAL AWARD WITHIN THE REGLEMENTARY PERIOD OF 30 DAYS UNDER REPUBLIC ACT NO. 876;
4. THE ARBITRAL DECISION BY VIRTUE OF A JOINT SUBMISSION BY THE PARTIES WAS EFFECTIVELY ONE OF A "JUDGMENT BY CONSENT", AS SUCH IT SHOULD HAVE BEEN FIRST REPUDIATED BEFORE THE ARBITRAL TRIBUNAL. FAILING TO REPUDIATE THE SAME BEFORE THE ARBITRAL TRIBUNAL, ITS CONFIRMATION BY THE REGIONAL TRIAL COURT BECAME MINISTERIAL. THUS THE REGIONAL TRIAL COURT’S CONFIRMATION THEREOF IS NOT APPEALABLE;chanrob1es virtua1 1aw 1ibrary
5. THE ONLY TWO ASSIGNMENT OF ERRORS ARE NOT APPEALABLE AS THEY HAVE NOT BEEN RAISED IN THE REGIONAL TRIAL COURT;
6. THE APPEAL, WHICH ULTIMATELY RAISES ONLY QUESTIONS OF LAW, WAS IMPROPERLY FILED UNDER RULE 41 OF THE RULES OF COURT; AND
7. IT APPEARS THAT THERE HAVE ALREADY BEEN A DISMISSAL OF THE APPEAL FOR FAILURE TO FILE APPELLANT’S BRIEF, AND THE SAME DOES NOT APPEAR TO HAVE BEEN RECONSIDERED YET.
THE COURT OF APPEALS PATENTLY ERRED IN CAVALIERLY GRANTING THE RELIEF APPEALED FOR ON THE MERITS WITHOUT YET GIVING APPELLEE THE OPPORTUNITY TO FILE ITS BRIEF AND/OR WITHOUT YET THE COURT OF APPEALS HAVING RESOLVED THE PENDING INCIDENT WHICH IS THE MOTION TO DISMISS FILED UNDER RULE 50 OF THE RULES OF COURT.
THE COURT OF APPEALS PATENTLY ERRED IN SETTING ASIDE THE ORDER OF THE REGIONAL TRIAL COURT DATED 15 SEPTEMBER 1998 WHICH MODIFIED IN PART AND CONFIRMED THE REST OF THE ARBITRAL DECISION AND THE ORDER DATED 8 JANUARY 1999 WHICH DENIED RESPONDENT’S MOTION FOR RECONSIDERATION, SUPPOSEDLY BECAUSE THE ARBITRAL DECISION WAS NOT VERIFIED, WHEN SUCH A LACK OF VERIFICATION:chanrob1es virtual 1aw library
1. UNLIKE FOR AD HOC ARBITRATIONS WHICH ARE CONDUCTED OUTSIDE THE AUSPICES OF THE COURTS, MAY NOT REQUIRE A VERIFICATION FOR AUTHENTICATING THE ARBITRAL AWARD;
2. IS MERELY A FORMAL DEFECT THAT IS NEITHER JURISDICTIONAL NOR FATAL;
3. CAN BE DISPENSED WITH OR EXCUSED;
4. DOES NOT OPERATE TO MAKE THE COURT TO NECESSARILY COMMIT REVERSIBLE ERROR;
5. DOES NOT AFFECT THE COURT OF ITS JURISDICTION;
6. SIMPLY AN ASSURANCE AGAINST PRODUCTS OF IMAGINATION;
7. CANNOT BE RAISED AS AN OBJECTION FOR THE FIRST TIME ON APPEAL; HAS BEEN COMPLIED WITH BY PETITIONER’S MOTION TO CONFIRM/MODIFY THE SAME;chanrob1es virtua1 1aw 1ibrary
8. NOT NECESSARY WHERE AN OPPOSITION IS NOT BASED ON FRAUD, ACCIDENT, MISTAKE OR EXCUSABLE NEGLIGENCE;
9. HAS BEEN CURED/OFFSET BY LACK OF OBJECTION THERETO AT FIRST INSTANCE IN THE COURT BELOW; AND
10. DOES NOT BY ITS TECHNICALITY SACRIFICE SUBSTANTIAL JUSTICE. 22
The petition lacks merit.
Supreme Court Circular No. 2-90, which is based in a Resolution of the Court En Banc in UDK-9748 (Anacleto Murillo v. Rodolfo Consul), March 1, 1990, provides in §4(c) thereof:chanrob1es virtual 1aw library
c) . . . If an appeal under Rule 41 is taken from the regional trial court to the Court of Appeals and therein the appellant raises only questions of law, the appeal shall be dismissed, issues purely of law not being reviewable by said Court. . . . (Emphasis supplied
This was reproduced in Rule 50, Section 2 of the 1997 Rules of Civil Procedure.
An appeal under Rule 41 taken from the Regional Trial Court to the Court of Appeals raising only questions of law shall be dismissed, issues purely of law not being reviewable by said court. (Italics supplied
Corollary thereto, in Roman Catholic Archbishop of Manila v. Court of Appeals, Et Al., 24 it was held that there is a question of law when the issue does not call for an examination of the probative value of evidence presented, the truth or falsehood of facts being admitted and the doubt concerns the correct application of law and jurisprudence on the matter.
The issues raised by NAPOCOR in its appeal to the Court of Appeals are not purely questions of law. Specifically, NAPOCOR’s arguments assailing the award by the trial court to GROGUN of the amount of (a) P1,447,670.00 representing the value of its accomplished works which were destroyed by the flood waters; and (b) P670,369.61 representing the compensation for idle time of manpower and equipment caused by the opening of the CGHSS, raised factual issues. Furthermore, the determination of the amount of damages NAPOCOR was entitled to under its counterclaim depends on whether the leakages were causally linked to any defective work performed by GROGUN.
Then, too, the mere filing of the notice of appeal is sufficient. Rule 41, Section 2 of the 1997 Rule on Civil Procedure categorically states:chanrob1es virtual 1aw library
(a) Ordinary appeal. — The appeal to the Court of Appeals in cases decided by the Regional Trial Court in the exercise of its original jurisdiction shall be taken by filing a notice of appeal with the court which rendered the judgment or final order appealed from and serving a copy thereof upon the adverse party. No record on appeal shall be required except in special proceedings and other cases of multiple or separate appeals where the law or these Rules so require. In such cases, the record on appeal shall be filed and served in like manner.chanrob1es virtua1 1aw 1ibrary
This petition originated from an action for collection of a sum of money filed with the Regional Trial Court, 25 which is an ordinary civil action. 26 The decision of the parties to submit their dispute to arbitration during the proceedings did not change the nature of the original action to one of special proceeding, under which an appeal shall be by record on appeal. Section 22 of the Arbitration Law, 27 which provides that arbitration is in the nature of a special proceeding, is not applicable.
GROGUN argues that the Court of Appeals should have dismissed the appeal because NAPOCOR filed its Appellant’s Brief more than one year from the filing of the Notice of Appeal.
The argument is tenuous. Rule 44, Section 7 of the 1997 Rules of Civil Procedure provides that the appellant shall file his brief within forty-five (45) days from receipt of notice from the Court of Appeals. 28
In the case at bar, NAPOCOR received notice from the Court of Appeals to file its Brief within 45 days on October 26, 1999. On December 10, 1999, it filed a Motion for Extension of forty five days, or until January 25, 2000, within which to file its Brief, which was granted. 29 Hence, NAPOCOR’s Appellant’s Brief filed on January 24, 2000 was on time.
GROGUN claims that the Court of Appeals had already dismissed the appeal in its Resolution dated April 18, 2000, to wit:chanrob1es virtual 1aw library
In view of the resolution dated March 3, 2000 which considered the case DISMISSED for failure to file appellant’s brief, the motion for extension of time to file brief by the OSG and the motion for early resolution filed by plaintiff-appellee Grogun, Inc. are merely noted. (Emphasis and Italics supplied
GROGUN’s reliance is misplaced. In a subsequent Resolution, the Court of Appeals corrected itself thus:chanrob1es virtual 1aw library
Considering that the resolution of this Court dated April 18, 2000 in CV NO. 62017 was intended for CV NO. 62357, the same is hereby RECALLED and SET ASIDE.
We come now to the issue of whether the copy of the arbitral award submitted by GROGUN to the trial court was valid.
GROGUN admits that the copy of the arbitral award it submitted to the trial court was not verified. However, it argues that the lack of verification is a formal defect which is not fatal, and may be waived or dispensed with. It cites cases which, however, refer to the effect of lack of verification in the pleadings.chanrob1es virtua1 1aw 1ibrary
Verification in general is confirmation of correctness, truth, or authenticity by affidavit, oath, or deposition. 30 The verb verify is frequently used in its legal sense in legal proceeding and matters of law, and as used and understood by lawyers it has a technical signification, and means the swearing to an affidavit; to affirm under oath; to confirm and substantiate by oath; or even by agreement, to confirm by formal oath; to testify or affirm formally or upon oath; to confirm or establish the authority of; as by affirmation or competent evidence; to confirm or substantiate by proof; to establish by evidence. 31 The word verified, in connection with statutory reports, has a settled or well known meaning; and refers to an affidavit attached to the statement as to the truth of the matters therein set forth, within the personal knowledge of the affiant, and it has been held that the word means "sworn to" and ordinarily imports a verity attested by the sanctity of an oath. 32
In the case at bar, the copy of the arbitral award did not meet the requirements of Section 20 of the Arbitration Law, and consequently, therefore can not be the basis of the assailed Orders of the trial court. Specifically, Section 20 provides:chanrob1es virtual 1aw library
Form and contents of award. — The award must be made in writing and signed and acknowledged by a majority of the arbitrators, if more than one; and by the sole arbitrator, if there is only one. Each party shall be furnished with a copy of the award. The arbitrators in their award may grant any remedy or relief which they may deem just and equitable and within the scope of the agreement of the parties, which shall include, but not be limited to, the specific performance of a contract. (Emphasis supplied
GROGUN argues that NAPOCOR did not raise as issue the lack of verification of the copy of the arbitral award in the trial court. Neither did NAPOCOR repudiate the arbitral award before the Arbitration Tribunal and the trial court.
The argument is not well-taken. Ordinarily, points of law, theories, issues and arguments not brought to the attention of the lower court cannot be raised for the first time on appeal. 33
In the case at bar, however, NAPOCOR could not have raised the lack of verification of the copy of the arbitral award submitted by GROGUN since it was assailing the authenticity and due execution of the copy itself. It was only after the trial court upheld the said copy as a valid arbitral award that NAPOCOR was able to raise the issue, which was during the filing of its appellant’s brief before the Court of Appeals.
GROGUN also argues that the Court of Appeals should have first decided the Motion to Dismiss filed by the NAPOCOR before resolving the merits of the appeal. It also alleges that the Court of Appeals did not require it to file an Appellee’s Brief.
The contention is without merit. The grant or denial of the Motion to Dismiss was within the sound discretion of the Court of Appeals. Its resolution of the appeal on its merits meant that it found the Motion to Dismiss to be without merit. On the other hand, Rule 44, Section 8 of the 1997 Rules of Civil Procedure, 34 provides that the appellee shall file his brief within forty-five days from receipt of the appellant’s brief. Hence, there was no need for the Court of Appeals to require GROGUN to file its appellee’s brief.
WHEREFORE, in view of the foregoing, the petition is DENIED. The Decision of the Court of Appeals dated March 30, 2001, which set aside the Orders dated September 15, 1998 and January 8, 1999 of the Regional Trial Court of Quezon City, Branch 216, in Civil Case No. Q-96-28731, and remanded the case to the trial court for further proceedings, is AFFIRMED.chanrob1es virtua1 1aw 1ibrary
Davide, Jr., C.J.
, Vitug, Carpio and Azcuna, JJ.
1. CA Rollo, p. 273.
2. Id., p. 271.
3. Id., pp. 262–268.
4. Id., p. 277.
5. Id., pp. 285–295.
6. Id., pp. 297–312.
7. Id., pp. 346–348.
8. An Act to Authorize the Making of Arbitration and Submission Agreements, to Provide for the Appointment of Arbitrators and the Procedure for Arbitration in Civil Controversies, and for other Purposes.
9. Rollo, pp. 60–61.
10. CA Rollo, pp. 429–434.
11. Id., pp. 435–437.
12. Id., pp. 438–441.
13. Rollo, p. 63.
14. CA Rollo, pp. 447–450.
15. Issued by Judge Marciano I. Bacalla.
16. CA Rollo, p. 486.
17. Id., pp. 511–518.
18. Penned by Justice Eriberto U. Rosario, Jr. with Justices Buenaventura J. Guerrero and Alicia L. Santos, concurring.
19. Rollo, p. 57.
20. CA Rollo, pp. 538–556.
21. Rollo, p. 59.
22. Id., pp. 17–18.
23. Macawiwili Gold Mining & Development Company, Inc. and Omico Mining & Industrial Corporation v. Court of Appeals, Et Al., 358 Phil. 245 (1998).
24. G.R. No. 111324, 5 July 1996.
25. SEC. 19 of Batas Pambansa Blg. 129, as amended, otherwise known as The Judiciary Reorganization Act of 1980:chanrob1es virtual 1aw library
(8) In all other cases in which the demand, exclusive of interest, damages or whatever kind, attorney’s fees, litigation expenses, and costs or the value of the property in controversy exceeds One hundred thousand pesos (P100,000.00) or, in such other cases in Metro Manila, where the demand, exclusive of the abovementioned items exceeds Two hundred thousand pesos (P200,000.00).
26. Pahilan v. Talaba, Et Al., G.R. No. 110170, 21 February 1994, 230 SCRA 205.
27. SEC. 22. Arbitration deemed a special proceeding. — Arbitration under a contract or submission shall be deemed a special proceeding, of which the court specified in the contact or submission, or if none be specified, the Court of First Instance for the province or city in which one of the parties resides or is doing business, or in which the arbitration was held, shall have jurisdiction. Any application to the court, or a judge thereof, hereunder shall be made in a manner provided for the making and hearing of motions, except as otherwise herein expressly provided.
28. Appellant’s brief. — It shall be the duty of the appellant to file with the court, within forty-five (45) days from receipt of the notice of the clerk that all the evidence, oral and documentary, are attached to the record, seven (7) copies of his legibly typewritten, mimeographed or printed brief, with proof of service of two (2) copies thereof upon the appellee.
29. CA Rollo, p. 16.
30. Words and Phrases, Permanent Edition, Volume 44, citing Mc Namara v. Powell, 52 N.Y. S. 2 2D 515, 527.
31. 92 CJS 996–997.
32. 92 CJS 997–998.
33. Mendoza v. Court of Appeals, 274 SCRA 527, 538–539, 20 June 1997 per Panganiban, J., City of Cebu v. Heirs of Candido Rubi, supra, per Gonzaga-Reyes, J., Hufana v. Genato, G.R. No. 141209, 17 September 2001, per Panganiban, J., San Juan Structural & Steel Fabricators, Inc. v. Court of Appeals, 296 SCRA 631, 649, 29 September 1998, per Panganiban, J.
34. Appellee’s brief. — Within forty-five (45) days from receipt of the appellant’s brief, the appellee shall file with the court seven (7) copies of his legibly typewritten, mimeographed or printed brief, with proof of service of two (2) copies thereof upon the appellant.