G.R. No.
172525
October 20, 2010
SHINRYO (PHILIPPINES) COMPANY, INC., Petitioner,
vs.
RRN INCORPORATED,* Respondent.
DECISION
PERALTA, J.:
This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court, praying that
the Decision1 of the Court of Appeals (CA) dated February 22, 2006, affirming the Decision of the
Construction Industry Arbitration Commission (CIAC), and the CA Resolution 2 dated April 26, 2006,
denying herein petitioner's motion for reconsideration, be reversed and set aside.
The facts, as accurately narrated in the CA Decision, are as follows.
Petitioner Shinryo (Philippines) Company, Inc. (hereinafter petitioner) is a domestic corporation
organized under Philippine laws. Private respondent RRN Incorporated (hereinafter respondent) is
likewise a domestic corporation organized under Philippine laws.
Respondent filed a claim for arbitration against petitioner before CIAC for recovery of unpaid account
which consists of unpaid portions of the sub-contract, variations and unused materials in the total
sum of P5,275,184.17 and legal interest in the amount of P442,014.73. Petitioner filed a
counterclaim for overpayment in the amount ofP2,512,997.96.
The parties admitted several facts before the CIAC. It was shown that petitioner and respondent
executed an Agreement and Conditions of Sub-contract (hereafter Agreement signed on June 11,
1996 and June 14, 1996, respectively. Respondent signified its willingness to accept and perform for
petitioner in any of its projects, a part or the whole of the works more particularly described in
Conditions of Sub-Contract and other Sub-contract documents.
On June 11, 2002, the parties executed a "Supply of Manpower, Tools/Equipment, Consumables for
the Electrical Works-Power and Equipment Supply, Bus Duct Installation" for the Phillip Morris
Greenfield Project (hereafter Project) covered by Purchase Order Nos. 4501200300-000274 and
4501200300-000275 amounting toP15,724,000.00 and P9,276,000.00 respectively, or a total
amount of P25,000,000.00. The parties also agreed that respondent will perform variation orders in
the Project. In connection with the Project, petitioner supplied manpower chargeable against
respondent.
Respondent was not able to finish the entire works with petitioner due to financial difficulties.
Petitioner paid respondent a total amount of P26,547,624.76. On June 25, 2005 [should read 2003],
respondent, through its former counsel sent a letter to petitioner demanding for the payment of its
unpaid balance amounting to P5,275,184.17. Petitioner claimed material back charges in the amount
of P4,063,633.43. On September 26, 2003, respondent only acknowledged P2,371,895.33 as
material back charges. Thereafter, on October 16, 2003, respondent sent another letter to petitioner
for them to meet and settle their dispute.
On January 8, 2004, respondent sent another letter to petitioner regarding the cost of equipment
rental and the use of scaffolding. Thereafter, on August 12, 2004, petitioner sent a letter to
respondent denying any unpaid account and the failure in their negotiations for amicable settlement.
On September 3, 2004, respondent, through its new counsel, advised petitioner of their intention to
submit the matter to arbitration. Thereafter, their dispute was submitted to arbitration. During the
preliminary conference, the parties agreed in their Terms of Reference to resolve eight issues, to wit:
1. What should be the basis in evaluating the variation cost?
1.1 How much is the variation cost?
2. Is the Respondent (petitioner in the instant case) justified in charging claimant (herein
respondent) the equipment rental fee and for the use of the scaffoldings? If so, how much
should be charged to Claimant?
3. What should be the basis in evaluating the total cost of materials supplied by Respondent
to the Project which is chargeable to Claimant?
3.1 How much is the total cost of materials supply chargeable to Claimant?
4. How much is the value of the remaining works left undone by the Claimant in the project?
5. Is the Claimant's claim for inventory of excess materials valid? If so, how much is the
value thereof?
6. Is the Respondent entitled to its claim for an overpayment in the amount
of P2,512,997.96?
7. Is Claimant entitled to its claim for interest? If so, how much?
8. Who between the parties shall bear the cost of Arbitration?
The CIAC rendered the assailed decision after the presentation of the parties' evidence. [The
dispositive portion of said decision reads as follows:
WHEREFORE, judgment is hereby rendered in favor of the claimant and respondent is ordered to
pay claimant its unpaid account in the sum of P3,728,960.54 plus legal interest of 6% reckoned from
June 25, 2003 up to the filing of the case on October 11, 2004 and 12% of P3,728,960.54 from the
finality of the judgment until fully paid and arbitration cost of P104,333.82 representing claimant's
share of the arbitration cost which respondent should reimburse.
SO ORDERED.]
Petitioner accepts the ruling of the CIAC only in Issue No. 1 and Sub-Issue No. 1.1 and in Issue No.
2 in so far as the amount of P440,000.00 awarded as back charges for the use of scaffoldings. x x x 3
On February 22, 2006, the CA promulgated the assailed Decision affirming the decision of the CIAC.
The CA upheld the CIAC ruling that petitioner failed to adduce sufficient proof that the parties had an
agreement regarding charges for respondent's use of the manlift. As to the other charges for
materials, the CA held that the evidence on record amply supports the CIAC findings. Petitioner
moved for reconsideration of said ruling, but the same was denied per Resolution dated April 26,
2006.
Hence, this petition where it is alleged that:
I. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE REVERSIBLE ERROR WHEN
IT DENIED PETITIONER'S CLAIM FOR MANLIFT EQUIPMENT RENTAL IN THE AMOUNT
OFP511,000.00 DESPITE EVIDENCE ON RECORD THAT RESPONDENT RRN ACTUALLY USED
AND BENEFITED FROM THE MANLIFT EQUIPMENT.
II. IN RENDERING THE QUESTIONED DECISION AND QUESTIONED RESOLUTION, THE
HONORABLE COURT OF APPEALS HAS DECIDED A QUESTION OF SUBSTANCE NOT IN
ACCORD WITH LAW AND/OR WITH THE APPLICABLE DECISIONS OF THE HONORABLE
SUPREME COURT.
III. THE COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE ERROR IN AFFIRMING THE
CIAC AWARD FOR THE VALUE OF INVENTORIED MATERIALS CONSIDERING THAT:
A. RESPONDENT RRN ADMITTED THE VALIDITY OF THE DEDUCTIONS ON
ACCOUNT OF MATERIAL SUPPLY, WHICH INCLUDED THE INVENTORIED
MATERIALS.
B. RESPONDENT RRN HAS NO BASIS TO CLAIM BECAUSE ENGR. BONIFACIO
ADMITTED THAT RESPONDENT RRN FAILED TO ESTABLISH WHETHER THE
MATERIALS CAME FROM RESPONDENT RRN OR FROM PETITIONER AND
THAT IT WAS PETITIONER THAT ACTUALLY INSTALLED THE SAID MATERIALS
AS PART OF REMAINING WORKS THAT PETITIONER TOOK OVER FROM
RESPONDENT RRN.
C. THE CLAIM FOR THE VALUE OF INVENTORIED MATERIALS IS A DOUBLE
CLAIM OR DOUBLE ENTRY BECAUSE IN THE COMPUTATION OF THE FINAL
ACCOUNT, RESPONDENT RRN WAS CREDITED THE FULL CONTRACT PRICE
AND THE COST OF VARIATIONS, WHICH INCLUDED THE INVENTORIED
MATERIALS.
IV. IN RENDERING THE QUESTIONED DECISION AND QUESTIONED RESOLUTION, THE
COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE ERROR IN THAT IT COMPLETELY
DISREGARDED THE PROVISION OF THE SUBCONTRACT, WHICH ALLOWED PAYMENT OF
ACTUAL COST INCURRED BY PETITIONER IN COMPLETING THE REMAINING WORKS THAT
PRIVATE RESPONDENT ADMITTEDLY FAILED TO COMPLETE.
V. THE COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE ERROR WHEN IT
COMPLETELY DISREGARDED THE EVIDENCE ON ACTUAL COST INCURRED BY PETITIONER
IN COMPLETING THE REMAINING WORKS.
VI. THE COURT OF APPEALS COMMITTED GRAVE REVERSIBLE ERROR WHEN IT AFFIRMED
THE CIAC AWARD FOR INTERESTS AND ARBITRATION COSTS IN FAVOR OF RESPONDENT
RRN.4
The petition is bereft of merit.
Despite petitioner's attempts to make it appear that it is advancing questions of law, it is quite clear
that what petitioner seeks is for this Court to recalibrate the evidence it has presented before the
CIAC. It insists that its evidence sufficiently proves that it is entitled to payment for respondent's use
of its manlift equipment, and even absent proof of the supposed agreement on the charges petitioner
may impose on respondent for the use of said equipment, respondent should be made to pay based
on the principle of unjust enrichment. Petitioner also questions the amounts awarded by the CIAC for
inventoried materials, and costs incurred by petitioner for completing the work left unfinished by
respondent.
As reiterated by the Court in IBEX International, Inc. v. Government Service Insurance System,5 to
wit:
It is settled that findings of fact of quasi-judicial bodies, which have acquired expertise
because their jurisdiction is confined to specific matters, are generally accorded not only
respect, but also finality, especially when affirmed by the Court of Appeals. In particular,
factual findings of construction arbitrators are final and conclusive and not reviewable by
this Court on appeal.
This rule, however, admits of certain exceptions. In Uniwide Sales Realty and Resources
Corporation v. Titan-Ikeda Construction and Development Corporation, we said:
In David v. Construction Industry and Arbitration Commission, we ruled that, as exceptions, factual
findings of construction arbitrators may be reviewed by this Court when the petitioner proves
affirmatively that: (1) the award was procured by corruption, fraud or other undue means; (2) there
was evident partiality or corruption of the arbitrators or any of them; (3) the arbitrators were guilty of
misconduct in refusing to hear evidence pertinent and material to the controversy; (4) one or more of
the arbitrators were disqualified to act as such under Section nine of Republic Act No. 876 and
willfully refrained from disclosing such disqualifications or of any other misbehavior by which the
rights of any party have been materially prejudiced; or (5) the arbitrators exceeded their powers, or
so imperfectly executed them, that a mutual, final and definite award upon the subject matter
submitted to them was not made.
1avvp++i1
Other recognized exceptions are as follows: (1) when there is a very clear showing of grave abuse of
discretion resulting in lack or loss of jurisdiction as when a party was deprived of a fair opportunity to
present its position before the Arbitral Tribunal or when an award is obtained through fraud or the
corruption of arbitrators, (2) when the findings of the Court of Appeals are contrary to those of the
CIAC, and (3) when a party is deprived of administrative due process. 6
A perusal of the records would reveal that none of the aforementioned circumstances, which would
justify exemption of this case from the general rule, are present here. Such being the case, the
Court, not being a trier of facts, is not duty-bound to examine, appraise and analyze anew the
evidence presented before the arbitration body.7
Petitioner's reliance on the principle of unjust enrichment is likewise misplaced. The ruling of the
Court in University of the Philippines v. Philab Industries, Inc.8 is highly instructive, thus:
Unjust enrichment claims do not lie simply because one party benefits from the efforts or obligations
of others, but instead it must be shown that a party was unjustly enriched in the sense that the term
unjustly could mean illegally or unlawfully.
Moreover, to substantiate a claim for unjust enrichment, the claimant must unequivocally prove that
another party knowingly received something of value to which he was not entitled and that the state
of affairs are such that it would be unjust for the person to keep the benefit. Unjust enrichment is a
term used to depict result or effect of failure to make remuneration of or for property or benefits
received under circumstances that give rise to legal or equitable obligation to account for them; to be
entitled to remuneration, one must confer benefit by mistake, fraud, coercion, or request. Unjust
enrichment is not itself a theory of reconvey. Rather, it is a prerequisite for the enforcement of the
doctrine of restitution.
Article 22 of the New Civil Code reads:
Every person who, through an act of performance by another, or any other means, acquires or
comes into possession of something at the expense of the latter without just or legal ground, shall
return the same to him.
In order that accion in rem verso may prosper, the essential elements must be present: (1) that the
defendant has been enriched, (2) that the plaintiff has suffered a loss, (3) that the enrichment of the
defendant is without just or legal ground, and (4) that the plaintiff has no other action based on
contract, quasi-contract, crime or quasi-delict.
An accion in rem verso is considered merely an auxiliary action, available only when there is no
other remedy on contract, quasi-contract, crime, and quasi-delict. If there is an obtainable action
under any other institution of positive law, that action must be resorted to, and the principle of accion
in rem verso will not lie.9
As found by both the CIAC and affirmed by the CA, petitioner failed to prove that respondent's free
use of the manlift was without legal ground based on the provisions of their contract. Thus, the third
requisite, i.e., that the enrichment of respondent is without just or legal ground, is missing. In
addition, petitioner's claim is based on contract, hence, the fourth requisite that the plaintiff has no
other action based on contract, quasi-contract, crime or quasi-delict is also absent. Clearly, the
principle of unjust enrichment is not applicable in this case.
The other issues raised by petitioner all boil down to whether the CIAC or the CA erred in rejecting
its claims for costs of some materials.
Again, these issues are purely factual and cannot be properly addressed in this petition for review
on certiorari. InHanjin Heavy Industries and Construction Co., Ltd. v. Dynamic Planners and
Construction Corp.,10 it was emphasized that mathematical computations, the propriety of arbitral
awards, claims for "other costs" and "abandonment" are factual questions. Since the discussions of
the CIAC and the CA in their respective Decisions show that its factual findings are supported by
substantial evidence, there is no reason why this Court should not accord finality to said findings.
Verily, to accede to petitioner's request for a recalibration of its evidence, which had been thoroughly
studied by both the CIAC and the CA would result in negating the objective of Executive Order No.
1008, which created an arbitration body to ensure the prompt and efficient settlement of disputes in
the construction industry. Thus, the Court held in Uniwide Sales Realty and Resources Corporation
v. Titan-Ikeda Construction and Development Corporation, 11 that:
x x x The Court will not review the factual findings of an arbitral tribunal upon the artful allegation that
such body had "misapprehended facts" and will not pass upon issues which are, at bottom, issues of
fact, no matter how cleverly disguised they might be as "legal questions." The parties here had
recourse to arbitration and chose the arbitrators themselves; they must have had confidence in such
arbitrators. The Court will not, therefore, permit the parties to relitigate before it the issues of facts
previously presented and argued before the Arbitral Tribunal, save only where a clear showing is
made that, in reaching its factual conclusions, the Arbitral Tribunal committed an error so egregious
and hurtful to one party as to constitute a grave abuse of discretion resulting in lack or loss of
jurisdiction.12
As discussed above, there is nothing in the records that point to any grave abuse of discretion
committed by the CIAC.
The awards for interests and arbitration costs are, likewise, correct as they are in keeping with
prevailing jurisprudence.13
IN VIEW OF THE FOREGOING, the Petition is DENIED. The Decision of the Court of Appeals dated
February 22, 2006 and its Resolution dated April 26, 2006 are AFFIRMED.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
