Local Superior of the Servants of Charity v. Jody King Construction & Development Corporation
REITERATIONFacts
The Antecedents: Petitioner Local Superior of the Servants of Charity (Guanellians), Inc., through its Local Superior Fr. Luigi de Giambattista, invited bids for the construction of certain structures. Respondent Jody King Construction & Development Corporation was awarded the contract as the lowest bidder. The initial contract, dated September 12, 1992, was for Phase I of the project, including site development and the construction of several buildings, with a completion period of 150 calendar days. Subsequently, a second contract for Phase II, encompassing finishing works, was signed on May 28, 1993, with a down payment made on June 2, 1993. During the course of construction, petitioners frequently requested additional works and changes to the scope of the project, including the re-inclusion of Building "A" which had been previously deleted. Respondent submitted its 12th progress billing on October 5, 1993, which petitioners contested, leading to a dispute over payment. Procedural History: Respondent Jody King Construction & Development Corporation filed a complaint for breach of contract, specific performance, and damages against petitioners on September 19, 1994, with the Regional Trial Court, Branch 78, Quezon City. After trial, the RTC rendered a decision in favor of the respondent, ordering petitioners to pay various sums for different causes of action, plus interest and attorney's fees. Petitioners appealed this decision to the Court of Appeals. The Court of Appeals affirmed the RTC's decision with modifications, specifically reducing the interest rate on the monetary awards and deleting the award of attorney's fees. The appellate court's decision was promulgated on January 28, 2000. Petitioners then filed the instant petition for review on certiorari with the Supreme Court. The Petition: Petitioners seek review of the Court of Appeals' decision through a petition for certiorari under Rule 45 of the Rules of Court. They argue that the Court of Appeals erred in its findings of fact, particularly concerning the scope and cost of additional works and the delays in project completion. Petitioners contend that the changed orders did not significantly alter the original contracts and that delays were attributable to the respondent. They also claim the 12th billing was inaccurate. However, the Supreme Court noted that petitioners were raising questions of fact, which are generally beyond its domain, especially when affirmed by both the trial court and the Court of Appeals. The Court found no exceptions to the rule that such concurrent factual findings are binding and not subject to review.
Issue(s)
Whether the Supreme Court can review the factual findings of the lower courts. Whether the additional works performed by the respondent fall outside the scope of the original building contracts. Whether petitioners are liable for the costs of the additional works and Phase II project.
Ruling
The Supreme Court denied the petition and affirmed the decision of the Court of Appeals in toto. The Court held that the factual findings of the RTC, as affirmed by the CA, are binding and not subject to review by the Supreme Court, as no exceptions to this rule were present.
Ratio Decidendi
On the review of factual findings: The Court reiterated the hornbook doctrine that findings of fact of trial courts are entitled to great weight on appeal and should not be disturbed except for strong and valid reasons. This is because the trial court is in a better position to examine the demeanor of witnesses. The Supreme Court's function is primarily to review errors of law, not to re-evaluate evidence. When the factual findings of the RTC are affirmed in toto by the CA, there is even greater reason for the Supreme Court not to disturb them. The Court enumerated ten exceptions where factual findings may be reviewed, but found none applicable in this case. Therefore, the Court cannot re-examine the petitioners' claims regarding changed orders, costs, delays, and the accuracy of the 12th billing, as these are questions of fact. On the scope of the contracts and liability for additional works: The RTC found, and the CA affirmed, that the two building contracts did not govern the 132 additional works required by the petitioners. The RTC noted that petitioners' witness admitted that the plaintiff's engineer would sometimes go directly to Fr. Luigi for approval of works. It was deemed unjust to tie these additional works, including the entire Building "A", to the original contracts, especially concerning the 'no escalation clause' and construction duration. These additional works were considered an arrangement separate from the two contracts, for which partial payments were already made. The RTC concluded that all additional works were directed by the petitioners or their representatives, and billings were duly submitted. The Court found these factual conclusions to be well-supported by the evidence on record and thus binding. On the petitioners' liability: Based on the finding that the additional works were separate from the original contracts and were directed by the petitioners, the Court upheld the lower courts' conclusion that petitioners are liable for these works. The RTC even noted that petitioners had realized their obligation and proposed to pay P1,000,000.00 to settle the entire obligation. The Court found no error in the CA's affirmation of the RTC's monetary awards, subject to the modifications on interest rates and deletion of attorney's fees.
Main Doctrine
Findings of fact of trial courts, when affirmed by the Court of Appeals, are binding on the Supreme Court and will not be disturbed except for strong and valid reasons, as the trial court is in a better position to examine the demeanor of witnesses. The Supreme Court's jurisdiction is limited to reviewing errors of law.