December 2009 - Philippine Supreme Court Resolutions
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[G.R. No. 185232 : December 16, 2009] ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION, PETITIONER, VS. TEMP EXPRESS, INC., RESPONDENT.:
[G.R. No. 185232 : December 16, 2009]
ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION, PETITIONER, VS. TEMP EXPRESS, INC., RESPONDENT.
Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of this Court dated 16 December 2009,
G.R. No. 185232 - ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION, petitioner, versus TEMP EXPRESS, INC., respondent.
Before us is a petition for review on certiorari assailing the Decision[1] and Resolution[2] dated August 29, 2008 and November 4, 2008, respectively, of the Court of Appeals in CA-G.R. CV No. 86759.
In April 1997, the Asian Construction and Development Corporation (ACDC) was contracted by the Philippine Centennial Expo 98 Corporation (PCE 98 Corp.) for the design and construction of the Philippine Centennial Exposition 1998 Freedom Ring Project. PCE 98 Corp. assigned all its rights and obligations to First Centennial Clark Corporation. Subsequently, ACDC subcontracted to respondent Temp Express, Inc. (TEI) the Air-conditioning and Ventilation works at the Stagehouse and Services Structures at said project for the amount of P9,172,600.00. TEI commenced working on the project and partial payments were made by ACDC. The amount of the contract increased to P9,883,568 as a result of the changes in die orders of ACDC. Work continued on the project bat ACDC failed to fully pay TEI with the latter maintaining an outstanding obligation of P1,145,870.20. In addition thereto, TEI asked that it be paid P620,510.34 as additional cost necessary to complete the works and that the retention fee of P953,416.80 be returned to it. Demand letters were sent to ACDC which the latter ignored.[3]
For ACDC's failure to pay its obligation in the amount of P1,765,597.54, TEI filed on March 22, 2002 a Complaint[4] for Collection of Sum of Money and Damages with Application for Preliminary Attachment before the Regional Trial Court of Para�aque City. TEI asked that ACDC be ordered to pay the following: (a) The total amount of P1,765,597.54 plus interest at 12% per annum; (b) The retention fee m the amount of P953.416.80 plus interest at 12% per annum; (c) The amount of P350,000 by way of exemplary damages; (d) Attorney's fees based on the terms of the stipulated retainer agreement; and (e) Costs of the suit.
In its Answer with Counterclaim and Opposition to the Application for Preliminary Attachment,[5] ACDC raised, among others, the defenses: (1) the work done has not yet been approved nor accepted by the government; (2) the government refused to release funds as payment to TEI; and (3) the amount to be collected is not yet due and demandable.
During trial Andy Giotia, Gen. Manager of TEI, presented, among others, a photocopy of a document entitled "TEMP EXPRESS CHANGE ORDER NO. 02"[6] in support of TEI's claim for additional costs necessary to complete the works. Said document was objected to for being a photocopy, but same was nonetheless admitted by the court.
ACDC for its part, presented Napoleon Garcia, Vice-President of its Finance Department, who testified that TEI completed only 97% of the project and that its failure to pay TEI was caused by the failure of First Centennial Clark Corp. to pay ACDC.
The trial court ruled in favor of TEI. It found the work performed by TEI complete. It considered the admissions made by ACDC in its Answer and the documentary evidence presented by TEI. It did not give weight to ACDC's defenses on the ground that the contract entered into by TEI and ACDC is separate from ACDC's contract with the government. The failure of ACDC to question both the condition of the project when it was delivered and the billing statements sent to it bolstered TEI's money claims against it.[7] The trial court disposed of the case as follows:
ACDC appealed to the Court of Appeals contending that TEI's work was not completed and that the document allegedly showing that it agreed with the additional works amounting to P620,510.34 should not have been admitted in evidence it being a mere photocopy. It also questioned the awarding of the 12% legal interest and attorney's fees.
In its decision dated August 29, 2008, the Court of Appeals affirmed the RTC decision but modified the legal interest and attorney's fees awarded. It Ruled that ACDC admitted in open court that the project was completed and that this was stipulated by the parties. It likewise said that TEI was able to prove its claim for additional cost on the variation or change order. It added that assuming that Exhibit "P" was excluded, there were other evidence (Exhs. "G" and "H") to prove the same. The two (2) exhibits (letters/billings) which referred to the additional cost on the variation or change orders were not objected to by ACDC.[9] The dispositive portion of the Court of Appeals' decision reads:
ACDC is now before us via a petition for review on certiorari under Rule 45 raising the sole issue of whether or not the claim for additional cost of the variation or change order was duly proven by admissible evidence.
We rule that the claim for additional cost of the variation or change order was duly proven.
First, it is to be noted that petitioner did not specifically deny the allegations as well as the documents attached to the complaint and merely raised the defense that the money to be used as payment (to TEI) has not yet been released by the government. As such, petitioner is deemed to have admitted the claims, as well as the documentary evidence, of TEL We consider this a negative pregnant, that is, a denial pregnant with the admission of the substantial facts in the pleading responded to which are not squarely denied. It was in effect an admission of the averments it was directed at. Stated otherwise, a negative pregnant is a form of negative expression which carries with it an affirmation or at least an implication of some kind favorable to the adverse party. It is a denial pregnant with an admission of the substantial facts alleged in the pleading. Where a fact is alleged with qualifying or modifying language and the words of the allegation as so qualified or modified are literally denied, it has been held that the qualifying circumstances alone are denied while the fact itself is admitted.[11]
Petitioner is, in effect, saying that TEI has a claim but it still cannot pay because the government has not yet released the money to pay the same. On this point alone, the admissions made by petitioner are sufficient to establish the claim for additional cost. Its failure to specifically deny the material allegations in the complaint, together with the documents attached thereto, amounts to an admission under Section 11 of Rule 8 of the Rules of Court.[12] Any evidence to prove this point may already be considered superfluous.
Second, even assuming arguendo that Exhibit "P" is inadmissible because it is only a photocopy, there are other evidence to establish the claim for additional cost. The two (2) letters/progress billings[13] sufficiently prove there were additional costs for the change orders. It can be gathered from these documents the amounts from the change orders. Though these documents are not direct evidence of the change orders, they can be considered as indirect evidence. In other words, they are evidence which are circumstantial in nature still sufficient to prove what can be directly proved by Exhibit "P". Not having been objected to by ACDC, these documents are deemed admitted and have probative value.
As to the amounts and interest awarded by the Court of Appeals, we find them to be in accordance with jurisprudence.
WHEREFORE, the instant petition is DENIED. The Decision and Resolution dated August 29, 2008 and November 4, 2008, respectively, of the Court of Appeals in CA- G.R. CV No. 86759 are hereby AFFIRMED.
With costs against the petitioner
SO ORDERED.
WITNESS the Honorable Chief Justice Reynato S. Puno, Chairperson, Honorable Justice Conchita Carpio Morales. Working Chairperson, Honorable Justices Teresita Leonardo de Castro, Lucas P. Bersamin, and Martin S. Villarama, Jr.. Members, First Division, this 16th day of December 2009.
G.R. No. 185232 - ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION, petitioner, versus TEMP EXPRESS, INC., respondent.
Before us is a petition for review on certiorari assailing the Decision[1] and Resolution[2] dated August 29, 2008 and November 4, 2008, respectively, of the Court of Appeals in CA-G.R. CV No. 86759.
In April 1997, the Asian Construction and Development Corporation (ACDC) was contracted by the Philippine Centennial Expo 98 Corporation (PCE 98 Corp.) for the design and construction of the Philippine Centennial Exposition 1998 Freedom Ring Project. PCE 98 Corp. assigned all its rights and obligations to First Centennial Clark Corporation. Subsequently, ACDC subcontracted to respondent Temp Express, Inc. (TEI) the Air-conditioning and Ventilation works at the Stagehouse and Services Structures at said project for the amount of P9,172,600.00. TEI commenced working on the project and partial payments were made by ACDC. The amount of the contract increased to P9,883,568 as a result of the changes in die orders of ACDC. Work continued on the project bat ACDC failed to fully pay TEI with the latter maintaining an outstanding obligation of P1,145,870.20. In addition thereto, TEI asked that it be paid P620,510.34 as additional cost necessary to complete the works and that the retention fee of P953,416.80 be returned to it. Demand letters were sent to ACDC which the latter ignored.[3]
For ACDC's failure to pay its obligation in the amount of P1,765,597.54, TEI filed on March 22, 2002 a Complaint[4] for Collection of Sum of Money and Damages with Application for Preliminary Attachment before the Regional Trial Court of Para�aque City. TEI asked that ACDC be ordered to pay the following: (a) The total amount of P1,765,597.54 plus interest at 12% per annum; (b) The retention fee m the amount of P953.416.80 plus interest at 12% per annum; (c) The amount of P350,000 by way of exemplary damages; (d) Attorney's fees based on the terms of the stipulated retainer agreement; and (e) Costs of the suit.
In its Answer with Counterclaim and Opposition to the Application for Preliminary Attachment,[5] ACDC raised, among others, the defenses: (1) the work done has not yet been approved nor accepted by the government; (2) the government refused to release funds as payment to TEI; and (3) the amount to be collected is not yet due and demandable.
During trial Andy Giotia, Gen. Manager of TEI, presented, among others, a photocopy of a document entitled "TEMP EXPRESS CHANGE ORDER NO. 02"[6] in support of TEI's claim for additional costs necessary to complete the works. Said document was objected to for being a photocopy, but same was nonetheless admitted by the court.
ACDC for its part, presented Napoleon Garcia, Vice-President of its Finance Department, who testified that TEI completed only 97% of the project and that its failure to pay TEI was caused by the failure of First Centennial Clark Corp. to pay ACDC.
The trial court ruled in favor of TEI. It found the work performed by TEI complete. It considered the admissions made by ACDC in its Answer and the documentary evidence presented by TEI. It did not give weight to ACDC's defenses on the ground that the contract entered into by TEI and ACDC is separate from ACDC's contract with the government. The failure of ACDC to question both the condition of the project when it was delivered and the billing statements sent to it bolstered TEI's money claims against it.[7] The trial court disposed of the case as follows:
WHEREFORE, premises considered, it is here[by] ordered:
1. For defendant, Asia Construct and Development Corporation to pay plaintiff, Temp Express, Inc., the amount of One Million Seven Hundred Sixty-Five Thousand Five Hundred and Ninety-seven pesos and Fifty Four Centavos (P1,765,597.54) of unpaid service fee, in addition to a Nine Hundred Fifty-three Thousand, Four Hundred Sixteen pesos and Eighty centavos (P953,416.80) of retention fee for the completion of the project contract, in addition to legal interest thereto;
2. For defendant to pay attorney's fee in the amount of One Hundred Thousand pesos (P100,000.00); and
3. Cost of suit.[8]
ACDC appealed to the Court of Appeals contending that TEI's work was not completed and that the document allegedly showing that it agreed with the additional works amounting to P620,510.34 should not have been admitted in evidence it being a mere photocopy. It also questioned the awarding of the 12% legal interest and attorney's fees.
In its decision dated August 29, 2008, the Court of Appeals affirmed the RTC decision but modified the legal interest and attorney's fees awarded. It Ruled that ACDC admitted in open court that the project was completed and that this was stipulated by the parties. It likewise said that TEI was able to prove its claim for additional cost on the variation or change order. It added that assuming that Exhibit "P" was excluded, there were other evidence (Exhs. "G" and "H") to prove the same. The two (2) exhibits (letters/billings) which referred to the additional cost on the variation or change orders were not objected to by ACDC.[9] The dispositive portion of the Court of Appeals' decision reads:
WHEREFORE, the appeal is DISMISSED, and the assailed Decision of the Regional Trial Court of Para�aque City (Branch 196) in Civil Case No. CV-02-0132 is AFFIRMED with MODIFICATION in that defendant-appellant is ordered to pay interest at six percent (6%) per annum on the principal obligation from December 15, 2000, the date of the first demand by plaintiff-appellee; until said decision on the principal obligation became final and executory, and interest at twelve percent (12%) per annum on the principal obligation from the time said decision became final and executory until full payment of said amount; and the award of attorney's fees is reduced to Php30,000.00.
SO ORDERED.[10]
ACDC is now before us via a petition for review on certiorari under Rule 45 raising the sole issue of whether or not the claim for additional cost of the variation or change order was duly proven by admissible evidence.
We rule that the claim for additional cost of the variation or change order was duly proven.
First, it is to be noted that petitioner did not specifically deny the allegations as well as the documents attached to the complaint and merely raised the defense that the money to be used as payment (to TEI) has not yet been released by the government. As such, petitioner is deemed to have admitted the claims, as well as the documentary evidence, of TEL We consider this a negative pregnant, that is, a denial pregnant with the admission of the substantial facts in the pleading responded to which are not squarely denied. It was in effect an admission of the averments it was directed at. Stated otherwise, a negative pregnant is a form of negative expression which carries with it an affirmation or at least an implication of some kind favorable to the adverse party. It is a denial pregnant with an admission of the substantial facts alleged in the pleading. Where a fact is alleged with qualifying or modifying language and the words of the allegation as so qualified or modified are literally denied, it has been held that the qualifying circumstances alone are denied while the fact itself is admitted.[11]
Petitioner is, in effect, saying that TEI has a claim but it still cannot pay because the government has not yet released the money to pay the same. On this point alone, the admissions made by petitioner are sufficient to establish the claim for additional cost. Its failure to specifically deny the material allegations in the complaint, together with the documents attached thereto, amounts to an admission under Section 11 of Rule 8 of the Rules of Court.[12] Any evidence to prove this point may already be considered superfluous.
Second, even assuming arguendo that Exhibit "P" is inadmissible because it is only a photocopy, there are other evidence to establish the claim for additional cost. The two (2) letters/progress billings[13] sufficiently prove there were additional costs for the change orders. It can be gathered from these documents the amounts from the change orders. Though these documents are not direct evidence of the change orders, they can be considered as indirect evidence. In other words, they are evidence which are circumstantial in nature still sufficient to prove what can be directly proved by Exhibit "P". Not having been objected to by ACDC, these documents are deemed admitted and have probative value.
As to the amounts and interest awarded by the Court of Appeals, we find them to be in accordance with jurisprudence.
WHEREFORE, the instant petition is DENIED. The Decision and Resolution dated August 29, 2008 and November 4, 2008, respectively, of the Court of Appeals in CA- G.R. CV No. 86759 are hereby AFFIRMED.
With costs against the petitioner
SO ORDERED.
WITNESS the Honorable Chief Justice Reynato S. Puno, Chairperson, Honorable Justice Conchita Carpio Morales. Working Chairperson, Honorable Justices Teresita Leonardo de Castro, Lucas P. Bersamin, and Martin S. Villarama, Jr.. Members, First Division, this 16th day of December 2009.
Very truly yours,
(Sgd.) ENRIQUETA ESGUERRA-VIDAL
Clerk of Court
First Division
(Sgd.) ENRIQUETA ESGUERRA-VIDAL
Clerk of Court
First Division
Endnotes:
[1] Rollo, pp. 22-36. Penned by Associate Justice Marlene Gonzales-Sison, with Associate Justices Juan Q. Enriquez, Jr. and Isaias P. Dicdican concurring.
[2] Id. at 38-39.
[3] Id. at 23-24.
[4] Id. at 41-50.
[5] Id. at 51-56.
[6] Exh. "P"; Rollo, p. 57.
[7] Rollo, pp. 65-66.
[8] Id. at 67.
[9] Id. at 31-32.
[10] Id. at 35.
[11] Republic v. Sandiganbayan, G.R. No. 152154, July 15, 2003, 406 SCRA 190, 236.
[12] SEC. 11. Allegations not specifically denied deemed admitted. - Material averment in the complaint other than those as to the amount of unliquidated damages, shall be deemed admitted when not specifically denied. Allegations of usury in a complaint to recover usurious interest are deemed admitted if not denied under oath.
[13] Exhs. "G"and"H".
