Case Summary (G.R. No. 189618)
Background of the Joint Venture Agreement (JVA)
On January 25, 1995, Rivelisa Realty and First Sta. Clara entered into a Joint Venture Agreement for the construction and development of a residential subdivision project in Cabanatuan City. First Sta. Clara was tasked to undertake the horizontal development of the remaining 69% undeveloped portion within twelve months. Upon completion, 60% of the subdivided lots were to be transferred to First Sta. Clara. Initially, First Sta. Clara was required to expend its own resources amounting to Php 10,000,000, equivalent to the value of 31% of the project previously developed by Rivelisa Realty, before claiming proceeds from the pre-sale of these developed lots. Costs for additional works not included in the JVA would be shared as 40% by Rivelisa Realty and 60% by First Sta. Clara.
Events During Project Execution
First Sta. Clara subcontracted portions of the work but ran out of funds after two months, compelling Rivelisa Realty to partly cover subcontractor payments. When Rivelisa Realty refused further advances until 60% of the project was completed, First Sta. Clara expressed its intention to withdraw from the JVA. In response, Rivelisa Realty agreed in a letter dated August 24, 1995, to release First Sta. Clara from the JVA and valued its actual accomplishment at Php 4,000,000, inclusive of subcontractor payments and cash advances.
Dispute Over Payment
First Sta. Clara asserted a higher valuation of Php 4,578,142.10 for its completed works, which after deducting advances and subcontractor fees, translated to a net reimbursement claim of Php 3,000,000. Rivelisa Realty eventually agreed to reimburse this amount, emphasizing in correspondence that this sum exceeded its contractual obligations. Despite this, the payment remained unsettled, leading First Sta. Clara to file a complaint for rescission of the JVA and damages due to breach and delay.
Regional Trial Court (RTC) Decision
The RTC, in its March 30, 2000 decision, dismissed First Sta. Clara’s complaint and instead ordered First Sta. Clara to pay Rivelisa Realty damages and attorney’s fees. The court held that First Sta. Clara had to fulfill certain conditions before claiming payment, specifically: completing the horizontal development of the 69% undeveloped portion within twelve months, spending Php 10,000,000 of its own resources initially, and accomplishing at least 60% of the work. First Sta. Clara’s cessation of work halfway was deemed a breach, making it liable.
Court of Appeals (CA) Decision
The CA reversed the RTC ruling in February 2009, holding that Rivelisa Realty remained liable to reimburse First Sta. Clara for the work performed, amounting to Php 3,000,000 after deducting costs. The CA found that the JVA had been terminated by mutual consent, and Rivelisa Realty was obliged to pay for the value of work already accomplished despite the termination.
Procedural Issues on Appeals
After receiving the CA decision on March 3, 2009, Rivelisa Realty sought a 15-day extension to file a motion for reconsideration, which was filed on April 2, 2009—beyond the prescribed period. The CA denied the motion for extension and subsequently dismissed the belated motion for reconsideration as out of time. This resulted in the finality of the CA decision.
Issues Before the Supreme Court
The Supreme Court was tasked with resolving two principal issues:
- Whether the Court of Appeals erred in ruling that the 15-day reglementary period to file a motion for reconsideration is non-extendible.
- Whether First Sta. Clara was entitled to compensation for the development work it had completed under the project.
Supreme Court’s Ruling on Procedural Timeliness
The Court affirmed the non-extendibility of the 15-day period for filing a motion for reconsideration before the CA, relying on existing rules and jurisprudence. The 1999 Internal Rules of the Court of Appeals explicitly state the non-extendible character of this period. The Court underscored prior rulings, specifically Habaluyas Enterprises v. Japzon and Rolloque v. CA, which reinforce that no motion for extension to file a reconsideration motion is allowed in lower courts or appellate courts, except before the Supreme Court, which has discretionary power to grant extensions in Rule 45 petitions only.
The Court held that the filing of a motion for extension by Rivelisa Realty did not toll or suspend the running of the 15-day period, rendering the CA Decision final and executory on March 18, 2009. Rivelisa Realty's failure to file the motion for reconsideration within this term deprived it of
...continue readingCase Syllabus (G.R. No. 189618)
Case Background and Procedural History
- Petitioner Rivelisa Realty, Inc. and respondent First Sta. Clara Builders Corporation entered into a Joint Venture Agreement (JVA) dated January 25, 1995, regarding the construction and development of a residential subdivision in Cabanatuan City.
- Under the JVA, First Sta. Clara was responsible for completing horizontal development works on the 69% undeveloped portion of the project within 12 months, after which they were entitled to 60% of the subdivided lots.
- First Sta. Clara was to initially expend P10,000,000.00 of its own resources before claiming additional funds from pre-sales of the 31% already developed area.
- Costs for additional works not initially part of the JVA were to be shared 40% by Rivelisa Realty and 60% by First Sta. Clara.
- First Sta. Clara subcontracted the development works but ceased operations after running out of funds two months into construction; Rivelisa Realty paid part of the subcontractor's fees.
- First Sta. Clara wished to back out, prompting Rivelisa Realty to agree in writing on August 24, 1995, to release First Sta. Clara from the JVA and estimated the work accomplished at P4,000,000.00.
- First Sta. Clara valued its accomplished work at P4,578,142.10, claiming a net reimbursable amount of P3,000,000.00 after deducting advances and subcontractor fees.
- Rivelisa Realty agreed to reimburse this amount in a letter dated October 9, 1995, emphasizing it exceeded their JVA obligation.
- Despite demands, Rivelisa Realty did not pay; First Sta. Clara filed a complaint for rescission of the JVA, damages, and delay before the Regional Trial Court (RTC).
- The RTC dismissed the complaint, finding First Sta. Clara violated the JVA first by abandoning the project and ordered First Sta. Clara to pay damages and attorney’s fees to Rivelisa Realty.
- First Sta. Clara appealed; the Court of Appeals (CA) reversed and held Rivelisa Realty liable for reimbursement of P3,000,000.00 for work done, recognizing mutual termination by assent.
- Rivelisa Realty received the CA Decision on March 3, 2009, then filed a Motion for Extension of Time to file a Motion for Reconsideration on March 18, 2009, followed by the actual Motion for Reconsideration filed April 2, 2009.
- The CA denied the motion for extension on May 22, 2009, and denied the Motion for Reconsideration on September 8, 2009, as filed out of time.
- Petition for review on certiorari filed before the Supreme Court challenging the CA rulings.
Issues Presented to the Supreme Court
- Whether the Court of Appeals erre