G.R. No. L-60687 - Philippine Long Distance Telephone Co. vs. Genovea

Better Building, Inc. (BBI) had been providing janitorial maintenance and sanitation services to the Philippine Long Distance Telephone Company (PLDT) for over ten years.
In 1977, BBI requested PLDT to readjust its monthly billing due to increased cleaning material prices and the payment of additional employee benefits mandated by the Labor Code and various Presidential Decrees.
On September 18, 1978, PLDT agreed to a billing adjustment; however, it countered by agreeing to a reduced rate of P550.00 per janitor as opposed to BBI’s proposed rate of P595.00.
BBI asserted that, based on this counter offer, a total of P315,906.03 became due, from which PLDT had paid only P103,281.25, leaving a balance of P212,624.78 unpaid.

On February 4, 1981, BBI filed a complaint before the Court of First Instance of Rizal, Branch XIII (Civil Case No. 39943), to recover the unpaid balance plus additional amounts:

BBI, as an independent contractor, was responsible for the payment of benefits to its employees;
PLDT’s liability was limited strictly to the agreed payment of P550.00 per month; and
The documentary evidence submitted by BBI was either already paid, exaggerated, or of doubtful validity.

At the pre-trial on October 15, 1981, the trial court allowed BBI to mark its documentary evidence, terminated the pre-trial, and set the case for trial by stating that payment was the sole issue.
On January 6, 1982, the court admitted all of BBI’s documentary evidence notwithstanding PLDT’s objections and scheduled the presentation of PLDT’s evidence.
When PLDT’s counsel sought postponement on March 18, 1982, citing the sudden illness of a witness, the request was denied; PLDT was consequently considered to have waived its right to present its evidence, and the case was deemed submitted for decision.
On April 27, 1982, the court rendered a decision in favor of BBI, awarding:

P212,624.78 plus interest (computed from May 1976 until full payment) for extra fringe benefits advanced to the janitors;
P29,038.25 for the balance of regular billings;
P7,400.00 for special jobs rendered;
Attorney’s fees at 25% of the claim; and
Costs of suit.

On May 27, 1982, PLDT filed a Motion for New Trial and/or Reconsideration asserting:

It never admitted liability at pre-trial; and
BBI’s documentary evidence (pertaining to billing adjustments) had not been duly approved by PLDT.

On the same day, BBI moved for Immediate Execution and opposed PLDT’s motion for new trial/reconsideration.
On June 7, 1982, the trial judge denied PLDT’s motion for new trial/reconsideration on the ground that:

There was no valid reason to alter her earlier decision; and
PLDT had, after lengthy delays exceeding seven months, no longer been permitted to challenge the pre-trial order.

In the same order, the judge granted BBI’s motion for immediate execution, reasoning that:

A corresponding Writ of Execution was issued on June 8, 1982.
On June 9, 1982, PLDT filed a petition challenging the Order and the Writ of Execution, alleging grave abuse of discretion.
During the subsequent proceedings, BBI also filed a Motion for the Approval of its Bill of Costs, which enumerated expenses including:

The trial judge approved the Bill of Costs ex parte, ordering the deposit of the stated sums by specified banks.

Whether the issuance of a writ of execution pending appeal was justified given that:

PLDT maintained it never admitted liability and was deprived of its opportunity to present evidence;
The alleged “delay” used as a rationale by the trial judge did not, in itself, constitute a sufficient basis for immediate execution.

The judgment had not yet become final due to PLDT’s pending appeal; and
The items enumerated in the Bill of Costs extended beyond the statutory definition of costs, particularly the inclusion of attorney’s fees and interest computed at a non-judicial basis.

Its request for postponement on account of a key witness’s illness was denied; and
It was subsequently precluded from presenting its evidence, effectively prejudicing its case before the award was rendered.

Whether the computation of interest based on a 21% rate (reflecting private commercial borrowing rates) was valid under the term “legal rate of interest” as stipulated in the decision.