Case Digest (G.R. No. 166408)
Facts:
In Spouses Bonifacio and Lucia Paras v. Kimwa Construction and Development Corporation, decided April 8, 2015, petitioners Spouses Bonifacio and Lucia Paras (hereafter “Spouses Paras”) sued respondent Kimwa Construction and Development Corporation (“Kimwa”) for breach of contract with damages. Lucia Paras held a Special Permit to extract sand and gravel from Block VI of the Sapang Daco River in Kabulihan, Toledo City, valid from November 14, 1994 until May 15, 1995, and estimated to yield 40,000 cubic meters. On December 6, 1994, Lucia Paras and Kimwa entered into an Agreement for Supply of Aggregates, under which Kimwa would haul up to 40,000 cubic meters of aggregates at ₱240.00 per truckload exclusively from Paras’s permit area, payable within fifteen days after billing. Pursuant to the Agreement, Kimwa hauled 10,000 cubic meters but then stopped and allegedly moved to an adjacent concession area. Spouses Paras sent demand letters and, on their nonresponse, filed a complaintCase Digest (G.R. No. 166408)
Facts:
- Parties and Procedural Posture
- Petitioners Spouses Bonifacio and Lucia Paras (plaintiffs in RTC) filed an action for breach of contract with damages against respondent Kimwa Construction and Development Corporation (defendant in RTC).
- The Regional Trial Court (RTC), Branch 55, Mandaue City, rendered a Decision on May 16, 2001 in favor of petitioners. The Court of Appeals (CA) Special 20th Division reversed the RTC Decision by its Decision dated July 4, 2005 and denied a subsequent motion for reconsideration in its Resolution of February 9, 2006. This Supreme Court petition for review on certiorari under Rule 45 ensued.
- Supply Agreement and Special Permit
- On December 6, 1994, Lucia Paras, as “Supplier,” and Kimwa, as “Contractor,” entered into an “Agreement for Supply of Aggregates.” The Agreement:
- Allotted 40,000 cubic meters of sand and gravel exclusively to Kimwa at ₱240.00 per truckload;
- Stated terms of payment within fifteen (15) days after billing;
- Prohibited modification, amendment, assignment, or transfer except in writing.
- Lucia held a Special Permit issued November 14, 1994, valid for six months (until May 15, 1995), authorizing extraction of approximately 40,000 cu. m. from her concession area in Toledo City.
- Performance and Dispute
- Kimwa extracted and hauled 10,000 cu. m. but thereafter ceased operations.
- Petitioners contended Kimwa breached its obligation to haul the remaining 30,000 cu. m. by permit expiration; demanded damages and, upon non-compliance, filed the Complaint.
- Kimwa’s Answer denied any commitment to haul by May 15, 1995, maintained 40,000 cu. m. was a maximum limit without deadline, and invoked the Parol Evidence Rule to exclude extrinsic evidence of pre-contractual assurances.
- Trial and Appellate Findings
- RTC Decision (May 16, 2001): Held Kimwa liable for breach, awarding ₱720,000 (value of unhauled 30,000 cu. m.), attorney’s fees, and costs, reasoning Kimwa knew of the permit’s expiry.
- CA Decision (July 4, 2005) and Resolution (Feb 9, 2006): Reversed and dismissed the Complaint, ruling the written Agreement left no room for interpretation and barred parol evidence.
Issues:
- Whether Kimwa was obliged under the Agreement (and in light of the Special Permit) to haul the entire 40,000 cu. m. of aggregates on or before May 15, 1995.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)