Title
Bautista vs. Court of Appeals
Case
G.R. No. L-22710
Decision Date
Jun 30, 1967
Bautista's claim for unpaid materials barred by judicial compromise; Central's liability under performance bond extinguished due to Prmcci's payment.
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Case Digest (G.R. No. L-22710)

Facts:

Background of the Case

  • In 1951 and 1952, Philippine Ready-Mixed Concrete Co., Inc. (Prmcci) had several road-building contracts with the Government of the Philippines, including projects on Plaza Lawton, Juan Luna, Plaza Moriones, Espana Extension, and Highway 54.
  • Prmcci, along with Central Surety & Insurance Co. (Central), executed performance bonds under Act 3688 to secure the payment of labor and materials used in these projects.
  • Domingo Bautista, the petitioner, supplied sand, gravel, and filling materials to Prmcci for these projects.

Judicial Compromise Agreement

  • On January 31, 1952, Bautista filed a complaint (Civil Case No. 1636) against Prmcci and Central to recover P102,880.24, the unpaid balance for materials supplied from September 1951 to January 26, 1952.
  • On February 14, 1952, Bautista and Prmcci entered into a judicial compromise agreement, wherein Prmcci acknowledged owing Bautista P104,000.00 for materials supplied. The agreement outlined specific payments to be made from funds collected under various contracts.
  • The Court of First Instance of Rizal approved the compromise agreement on February 15, 1952, rendering judgment accordingly.

Subsequent Legal Actions

  • On April 2, 1952, Bautista filed another case (Civil Case No. 1711) to recover P37,686.80 for materials supplied in February and March 1952.
  • On July 31, 1952, the Director of Public Works informed Bautista that the Highway 54 project was completed and that no further payments would be made to Prmcci. Bautista was advised to proceed against the performance bond.
  • On October 3, 1952, Bautista filed Civil Case No. 1888 to enforce the performance bond for P48,807.74, representing unpaid balances for materials supplied to Highway 54.

Intervention and Trial Court Decision

  • Allied Enterprises Co., Inc. intervened in Civil Case No. 1888, claiming P13,629.42 for crushed rock supplied to Highway 54.
  • The trial court ruled in favor of Bautista and Allied Enterprises, ordering Prmcci and Central to pay the claimed amounts jointly and severally.
  • The Court of Appeals modified the trial court's decision, reducing Bautista's award to P8,012.59, representing materials supplied after the compromise agreement.

Issue:

  1. Whether the final judgment by compromise in Civil Case No. 1636 bars Bautista from claiming P40,795.15 for materials supplied to Highway 54 prior to the compromise agreement.
  2. Whether Bautista can enforce the performance bond for the P40,795.15 balance after the compromise agreement had been fully satisfied.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Conclusion:

The Supreme Court upheld the Court of Appeals' decision, ruling that Bautista’s claim for P40,795.15 was barred by the compromise agreement and that Central’s liability under the performance bond was extinguished. Costs were imposed on Bautista.


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