Ong v. Bogñalbal
REITERATIONFacts
1. The Antecedents: Ernesto Bogñalbal, an architect-contractor, entered into an agreement with Victoria Ong, a businesswoman, for the construction of a boutique. The contract stipulated a P200,000.00 price for labor, tools, and equipment to complete the work within 45 days, excluding Sundays, from material delivery. Payment was to be made via progress billings every two weeks, based on work accomplished and certified by the on-site architect. The contract also allowed for change orders regarding additional work or omissions. 2. Procedural History: Bogñalbal submitted progress billings, which Ong paid for the first three periods. Controversy arose with the fourth progress billing for P30,950.00. Ong refused payment, citing either Bogñalbal's insistence on a rushed flooring completion or that the billing was excessive. Bogñalbal subsequently filed a complaint for sum of money with damages with the Metropolitan Trial Court (MeTC). The MeTC ruled in favor of Bogñalbal. Ong appealed to the Regional Trial Court (RTC), which reversed the MeTC decision. Bogñalbal then filed a Petition for Review with the Court of Appeals (CA), which granted the petition, setting aside the RTC decision and reinstating the MeTC decision. Ong's motion for reconsideration with the CA was denied. 3. The Petition: Victoria Ong filed a Special Civil Action for Certiorari under Rule 65 of the Rules of Court, seeking to nullify the Court of Appeals' Resolution denying her Motion for Reconsideration. Ong argued that the CA committed grave abuse of discretion amounting to lack of jurisdiction. The Supreme Court, however, found that the CA's alleged errors were errors of judgment, not grave abuse of discretion, and that the petition should have been filed under Rule 45. The Court affirmed the CA's decision, reinstating the MeTC ruling that held Ong liable for damages.
Issue(s)
Whether a Special Civil Action for Certiorari under Rule 65 is the proper remedy. Whether the architect's certification of work accomplished is binding, absent proof of fraud or manifest error. Whether there was a novation of the Owner-Contractor Agreement regarding the payment of the fourth progress billing. Whether respondent Bogñalbal was justified in abandoning the project. Whether petitioner Ong's counterclaim for damages should be granted.
Ruling
The Supreme Court dismissed the Petition for Certiorari for lack of merit. The Court affirmed the decision of the Court of Appeals, which reinstated the Metropolitan Trial Court's decision holding petitioner Victoria Ong liable for damages.
Ratio Decidendi
On the Propriety of Certiorari: The Court reiterated that a special civil action for certiorari under Rule 65 is proper only to correct errors of jurisdiction or grave abuse of discretion, not mere errors of law or fact, which are correctible by appeal under Rule 45. While the Court may review factual findings in exceptional cases, the petition must demonstrate grave abuse of discretion amounting to lack of jurisdiction. In this case, the alleged errors of the Court of Appeals were found to be errors of judgment, not grave abuse of discretion. On the Credibility of the Architect's Certification: The Court held that under Article 1730 of the Civil Code, the decision of a third person (the architect) approving the work is final, except in cases of fraud or manifest error. Petitioner Ong failed to adequately prove fraud or manifest error on the part of Architect Cano. Her allegations of bias were mere speculations, and her claim that the architect was not present enough to certify the work was not sufficiently proven. The MeTC, having observed the architect's demeanor, upheld his credibility, and neither the RTC nor the CA questioned it. On the Alleged Novation: The Court found no novation of the Owner-Contractor Agreement. Petitioner Ong's claim of a verbal agreement to hold payment of the fourth billing until completion of the kenzo flooring was not sufficiently proven. Novation is never presumed and requires clear agreement or equivalent acts. Furthermore, even if such an agreement existed, Article 1186 of the Civil Code deems the condition fulfilled when the obligor voluntarily prevents its fulfillment. Ong's subsequent hiring of another contractor to finish the project prevented Bogñalbal from completing the kenzo flooring, thus fulfilling the condition under Article 1186. On the Authority to Abandon Work: The Court ruled that respondent Bogñalbal was not justified in unilaterally abandoning the project. While the Court of Appeals reasoned that Ong's breach (non-payment) justified Bogñalbal's stoppage, the Court clarified that the power to rescind obligations must generally be invoked judicially, not exercised unilaterally, in the absence of a stipulation to the contrary. Therefore, Bogñalbal's abandonment was unjustified. On Petitioner Ong's Counterclaim: Applying Article 1192 of the Civil Code, which states that in case of mutual breaches, the liability of the first infractor shall be equitably tempered, and if it cannot be determined who the first infractor is, the obligation is extinguished. The Court found that petitioner Ong committed the first breach by refusing to pay the fourth progress billing despite the architect's certification. Consequently, Bogñalbal, as the second infractor, was not liable for damages on Ong's counterclaim. However, the Court noted that Ong should first pay for the accomplished work before applying the damage scheme under Article 1192, and that the mitigation of damages is subject to the court's discretion.
Main Doctrine
A party's refusal to pay a progress billing, despite the architect's certification of work accomplished, constitutes a substantial breach of a reciprocal obligation, justifying the contractor's abandonment of the project. Furthermore, a petition for certiorari under Rule 65 is only proper to correct errors of jurisdiction or grave abuse of discretion, not mere errors of law or fact which are correctible by appeal.