Case Digest (G.R. No. 182648)
Facts:
Systems Energizer Corporation v. Bellville Development Incorporated, G.R. No. 205737, September 21, 2022, the Supreme Court Third Division, Gaerlan, J., writing for the Court.The dispute arose from two successive construction contracts between Systems Energizer Corporation (petitioner/contractor) and Bellville Development, Incorporated (respondent/owner) for electrical works at the Molito 3–Puregold commercial building in Alabang. The parties first executed an Owner‑Contractor Agreement on May 21, 2009 (the First Agreement) for a fixed lump‑sum price of ₱15,250,000.00. Article 2.02 of that agreement allowed later mutually agreed documents to form part of the contract; Article 5.05 addressed adjustments in price for additional or reduced work. Petitioner started work but operations were suspended after a few months.
Respondent issued a new Notice of Award/Notice to Proceed on March 25, 2010 reflecting revised specifications and larger scope and, on April 5, 2010, the parties executed a Second Agreement with a contract price of ₱51,550,000.00. Article 2.4 of the Second Agreement stated that the contract documents “contain the entire agreement … and … supersedes all prior agreements … and all other documents … are deemed waived and/or abandoned.” Several Work Authorization Orders (WAOs) followed and the parties proceeded with construction; respondent’s accounting reflected a final cost of ₱80,711,308.05. Respondent withheld 10% retention under each contract (₱1,525,000 and ₱5,155,000) and did not pay WAO No. 20 (₱1,350,000). Petitioner demanded payment on July 12, 2011; respondent asked for supporting documentation.
Petitioner filed a Complaint with the Construction Industry Arbitration Commission (CIAC) on September 13, 2011, seeking the unpaid retention fees and WAO No. 20. Respondent counterclaimed for reimbursement of alleged overpayments made under the First Agreement, asserting the Second Agreement novated the First. After hearings, the CIAC issued a Final Award dated July 16, 2012 ordering respondent to pay petitioner ₱8,030,000 (both 10% retentions and WAO No. 20) with 12% legal interest, denying claims for exemplary damages and attorneys’ fees, and allocating arbitration costs pro rata. The CIAC found (inter alia) that the Second Agreement did not specifically stipulate that it superseded the First Agreement and emphasized that petitioner had billed for and performed the works, certified by project professionals.
Respondent petitioned for review under Rule 43 (in relation to Section 18.2 of the CIAC’s Revised Rules) to the Court of Appeals. The CA, in a Decision dated January 31, 2013 (10th Division), modified the CIAC award and ordered petitioner to reimburse respondent ₱13,593,273.00 — concluding the Second Agreement superseded the First (an express novation), that petitioner had been unjustly enriched, and that pe...(Subscriber-Only)
Issues:
- Did petitioner’s failure to file a motion for reconsideration with the Court of Appeals bar the Supreme Court from entertaining the Rule 45 petition?
- Did the Second Agreement objectively and expressly novate (supersede and extinguish) the First Agreement?
- Is there sufficient evidence to sustain the CA’s finding that petitioner performed only 6.774% of the First Agreement and thus must reimburse respondent the excess payments (application o...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
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Doctrine:
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