Philrock Vs Construction

2/10/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 359
632 SUPREME COURT REPORTS ANNOTATED

Philrock, Inc. vs. Construction Industry Arbitration
Commission
*
G.R. Nos. 132848-49. June 26, 2001.
PHILROCK, INC., petitioner, vs. CONSTRUCTION

INDUSTRY ARBITRATION COMMISSION and Spouses
VICENTE and NELIA CID, respondents.
Actions; Arbitration; Construction Industry Arbitration

Commission (CIAC); Jurisdiction; Section 4 of Executive Order
(EO) 1008 expressly vests in the CIAC original and exclusive
jurisdiction over disputes arising from or connected with
construction contracts entered into by parties that have agreed to
submit their dispute to voluntary arbitration.—Petitioner avers
that the CIAC lost jurisdiction over the arbitration case after both
parties had withdrawn their consent to arbitrate. The June 13,
1995 RTC Order remanding the case to the CIAC for arbitration
was allegedly an invalid mode of referring a case for arbitration.
We disagree. Section 4 of Executive Order 1008 expressly vests in
the CIAC original and exclusive jurisdiction over disputes arising
from or connected with construction contracts entered into by
parties that have agreed to submit their dispute to voluntary
arbitration.
Same; Same; Same; Same; The Supreme Court will not
countenance the effort of any party to subvert or defeat the
objective of voluntary arbitration for its own private motives.—As
pointed out by the solicitor general, petitioner maneuvered to
avoid the RTC’s final resolution of the dispute by arguing that the
regular court also lost jurisdiction after the arbitral tribunal’s
April 13, 1994 Order referring the case back to the RTC. In so
doing, petitioner conceded and estopped itself from further
questioning the jurisdiction of the CIAC. The Court will not
countenance the effort of any party to subvert or defeat the
objective of voluntary arbitration for its own private motives.
After submitting itself to arbitration proceedings and actively
participating therein, petitioner is estopped from assailing the
jurisdiction of the CIAC, merely because the latter rendered an
adverse decision.
http://www.central.com.ph/sfsreader/session/00000168d76e64115a863952003600fb002c009e/t/?o=False 1/18
Same; Same; Same; Words and Phrases; “Cause of Action”

Defined.—Cause of action is defined as an act or omission by
which a party violates the right of another. A complaint is deemed
to have stated a cause of action provided it has indicated the
following: (1) the legal right of the plaintiff, (2) the correlative
obligation of the defendant, and (3) the act or the omission of the
defendant in violation of the said legal right. The
_______________
* THIRD DIVISION.
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VOL. 359, JUNE 26, 2001 633
Philrock, Inc. vs. Construction Industry Arbitration Commission
cause of action against petitioner was clearly established.

Respondents were purchasers of ready-mix concrete from
petitioner. The concrete delivered by the latter turned out to be of
substandard quality. As a result, respondents sustained damages
when the structures they built using such cement developed
cracks and honeycombs. Consequently, the construction of their
residence had to be stopped.
Same; Same; Same; Judicial Review; Voluntary arbitrators,
by the nature of their functions, act in quasi-judicial capacity,
such that their decisions are within the scope of judicial review.—
We disagree with the solicitor general. As pointed out earlier,
factual findings of quasi-judicial bodies that have acquired
expertise are generally accorded great respect and even finality, if
they are supported by substantial evidence. The Court, however,
has consistently held that despite statutory provisions making the
decisions of certain administrative agencies “final,” it still takes
cognizance of petitions showing want of jurisdiction, grave abuse
of discretion, violation of due process, denial of substantial justice
or erroneous interpretation of the law. Voluntary arbitrators, by
the nature of their functions, act in a quasi-judicial capacity, such
that their decisions are within the scope of judicial review.
Interests; If the obligation consists of the payment of a sum of
money, and the debtor incurs delay, the indemnity for damages
shall be the payment of legal interest.—The payment of interest is
based on Article 2209 of the Civil Code, which provides that if the
obligation consists of the payment of a sum of money, and the
debtor incurs delay, the indemnity for damages shall be the
payment of legal interest which is six percent per annum, in the

absence of a stipulation of the rate.
Damages; Where a person and his family were deprived of the
comfort and the safety of a house and were exposed to the agony of
witnessing the wastage and the decay of the structure for more
than seven years brought about by the unreasonable delay in the
construction of their residence due to the delivery of substandard
ready-mix concrete by the supplier, they are entitled to an award of
moral damages.—Respondents were deprived of the comfort and
the safety of a house and were exposed to the agony of witnessing
the wastage and the decay of the structure for more than seven
years. In her Memorandum, Respondent Nelia G. Cid describes
her family’s sufferings arising from the unreasonable delay in the
construction of their residence, as follows: “The family lives
separately for lack of space to stay in. Mrs. Cid is staying in a
small dingy bodega, while her son occupies another makeshift
room. Their only daughter stayed with her aunt from 1992 until
she got married in 1996. x x x.” The Court also notes that
634
during the pendency of the case, Respondent Vicente Cid died

without seeing the completion of their home. Under the
circumstances, the award of moral damages is proper.
Same; Nominal damages are recoverable only if no actual or
substantial damages resulted from the breach, or no damage was
or can be shown.—Nominal damages are recoverable only if no
actual or substantial damages resulted from the breach, or no
damage was or can be shown. Since actual damages have been
proven by private respondents for which they were amply
compensated, they are no longer entitled to nominal damages.
Attorney’s Fees; Where the award is not only for attorney’s fees
but also for expenses of litigation, it does not matter if the litigant
represented himself in court, because it is obvious that he incurred
expenses in pursuing his action.—Petitioner protests the grant of
attorney’s fees, arguing that respondent spouses did not engage
the services of legal counsel. Also, it contends that attorney’s fees
and litigation expenses are awarded only if the opposing party
acted in gross and evident bad faith in refusing to satisfy
plaintiffs valid, just and demandable claim. We disagree. The
award is not only for attorneys fees, but also for expenses of
litigation. Hence, it does not matter if respondents represented
themselves in court, because it is obvious that they incurred

expenses in pursuing their action before the CIAC, as well as the
regular and the appellate courts. We find no reason to disturb this
award.
PETITION for review on certiorari of a decision of the

Court of Appeals.
The facts are stated in the opinion of the Court.

Ponce Enrile, Reyes & Manalastas for petitioner.
PANGANIBAN, J.:
Courts encourage the use of alternative methods of dispute

resolution. When parties agree to settle their disputes
arising from or connected with construction contracts, the
Construction Industry Arbitration Commission (CIAG)
acquires primary jurisdiction. It may resolve not only the
merits of such controversies; when appropriate, it may also
award damages, interests, attorney’s fees and expenses of
litigation.
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VOL. 359, JUNE 26, 2001 635

Commission
The Case
Before us is a Petition for Review under Rule 45 of the

Rules of Court. The
1
Petition seeks the reversal of the July
9, 1997 Decision and the February 24, 1998 Resolution of
the Court of Appeals (CA) in the consolidated cases
docketed as CA-G.R. SP Nos. 39781 and 42443. The
assailed Decision disposed as follows:
“WHEREFORE, judgment is hereby rendered DENYING the

petitions and, accordingly, AFFIRMING
2
in toto the CIAC’s
decision. Costs against petitioner.”
The assailed Resolution ruled in this wise:
“Considering that the matters raised and discussed in the motion

for reconsideration filed by appellant’s counsel are substantially
the same arguments which the Court had passed upon and
resolved in the decision sought to be reconsidered, and there3 being
no new issue raised, the subject motion is hereby DENIED.”
The Facts
The undisputed facts of the consolidated cases are

summarized by the CA as follows:
“On September 14, 1992, the Cid spouses, herein private

respondents, filed a Complaint for damages against Philrock and
seven of its officers and engineers with the Regional Trial Court of
Quezon City, Branch 82.
“On December 7, 1993, the initial trial date, the trial court
issued an Order dismissing the case and referring the same to the
CIAC because the Cid spouses and Philrock had filed an
Agreement to Arbitrate with the CIAC.
_______________
1 Penned by Justice Ramon A. Barcelona with the concurrence of

Justices Jesus M. Elbinias, Division chairman; and Maximiano C.
Asuncion, member. By the time the assailed Resolution was promulgated,
Justice Asuncion had died and had thus been replaced by Justice Jorge S.
Imperial.
2 CA Decision, p. 10; rollo, p. 55.
3 Rollo, p. 44.
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Commission
“Thereafter, preliminary conferences were held among the parties

and their appointed arbitrators. At these conferences,
disagreements arose as to whether moral and exemplary damages
and tort should be included as an issue along with breach of
contract, and whether the seven officers and engineers of Philrock
who are not parties to the Agreement to Arbitrate should be
included in the arbitration proceedings. No common ground could
be reached by the parties, hence, on April 2, 1994, both the Cid
spouses and Philrock requested that the case be remanded to the
trial court. On April 13, 1994, the CIAC issued an Order stating,
thus:
‘x x x the Arbitral Tribunal hereby formally dismisses the above-

captioned case for referral to Branch 82 of the Regional Trial Court,
Quezon City where it first originated.
SO ORDERED.’
“The Cid spouses then filed with said Branch of the Regional
Trial Court of Quezon City a Motion To Set Case for Hearing
which motion was opposed by Philrock.
“On June 13, 1995, the trial court declared that it no longer
had jurisdiction over the case and ordered the records of the case
to be remanded anew to the CIAC for arbitral proceedings.
“Pursuant to the aforementioned Order of the Regional Trial
C[o]urt of Quezon City, the CIAC resumed conducting
preliminary conferences. On August 21, 1995, herein [Petitioner
Philrock requested to suspend the proceedings until the court
clarified its ruling in the Order dated June 13, 1995. Philrock
argued that said Order was based on a mistaken premise that ‘the
proceedings in the CIAC fell through because of the refusal of
[Petitioner] Philrock to include the issue of damages therein,’
whereas the true reason for the withdrawal of the case from the
CIAC was due to Philrock’s opposition to the inclusion of its seven
officers and engineers, who did not give their consent to
arbitration, as party defendants. On the other hand, private
respondent Nelia Cid manifested that she was willing to exclude
the seven officers and engineers of Philrock as parties to the case
so as to facilitate or expedite the proceedings. With such
manifestation from the Cid spouses, the Arbitral Tribunal denied
Philrock’s request for the suspension of the proceedings.
Philrock’s counsel agreed to the continuation of the proceedings
but reserved the right to file a pleading elucidating the position
he [had] raised regarding the Court’s Order dated June 13, 1995.
The parties then proceeded to finalize, approve and sign the
Terms of Reference. Philrock’s counsel and representative, Atty.
Pericles C. Consunji affixed his signature to said Terms of
Reference which stated that ‘the parties agree that their
differences be settled by an Arbitral Tribunal x x x x‘ (p. 9, Terms
of Reference, p. 200, Rollo).
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VOL. 359, JUNE 26, 2001 637

Commission
“On September 12, 1995, [P]etitioner Philrock filed its Motion to

Dismiss, alleging therein that the CIAC had lost jurisdiction to
hear the arbitration case due to the parties’ withdrawal of their
consent to arbitrate. The motion was denied by x x x CIAC per
Order dated September 22, 1995. On November 8, 1995 public
respondent ordered the parties to appear before it on November
28, 1995 for the continuation of the arbitral proceedings, and on
February 7, 1996, public respondent directed [P]etitioner Philrock
to set two hearing dates in the month of February to present its
evidence and to pay all fees assessed by it, otherwise x x x

Philrock would be deemed to have waived its right to present
evidence.
“Hence, petitioner instituted the petition for certiorari but
while said petition was pending, the CIAC rendered its Decision
dated September 24, 1996, the dispositive portion of which reads,
as follows:
‘WHEREFORE, judgment is hereby rendered in favor of the Claimant,

directing Respondent to pay Claimant as follows:
1. P23,276.25 representing the excess cash payment for materials

ordered by the Claimants, (No. 7 of admitted facts) plus interests
thereon at the rate of 6% per annum from September 26, 1995 to
the date payment is made.
2. P65,000.00 representing retrofitting costs.
3. P13,404.54 representing refund of the value of delivered but
unworkable concrete mix that was laid to waste.
4. P50,000.00 representing moral damages.
5. P50,000.00 representing nominal damages.
6. P50,000.00 representing attorney’s fees and expenses of litigation.
7. P144,756.80 representing arbitration fees, minus such amount
that may already have been paid to CIAC by respondent.
“Let a copy of this Decision be furnished the Honorable

Salvador C. Ceguera, presiding judge, Branch 82 of Regional Trial
Court of Quezon City who referred this case to the Construction
Industry Arbitration Commission for arbitration 4
and proper
disposition.’(pp. 44-45, Rollo, CA-G,R.SPNo.42443)”
Before the CA, petitioner filed a Petition for Review,

docketed as CA-G.R. SP No. 42443, contesting the
jurisdiction of the CIAC and
_______________
4 CA Decision, pp. 1-5; rollo, pp. 46-50.
638

Commission
assailing the propriety of the monetary awards in favor of

respondent spouses. This Petition was consolidated by the
CA with CA-G.R. SP No. 39781, a Petition for Certiorari
earlier elevated by petitioner questioning the jurisdiction of

the CIAC.
Ruling of the Court of Appeals

5
The CA upheld the jurisdiction of the CIAC over the
dispute between petitioner and private respondent. Under
Executive Order No. 1008, the CIAC acquires jurisdiction
when the parties agree to submit their dispute to voluntary
arbitration. Thus, in the present case, its jurisdiction
continued despite its April 13, 1994 Order referring the
case back to the Regional Trial Court (RTC) of Quezon
City, Branch 82, the court of origin. The CIAC’s action was
based on the principle that once acquired, jurisdiction
remains “until the full termination of the case unless a law
provides the contrary.” No such “full termination” of the
case was evident in the said Order; nor did the CIAC or
private respondents intend to put an end to the case.
Besides, according to Section 3 of the Rules of Procedure
Governing Construction Arbitration, technical rules of law
or procedure are not applicable in a single arbitration or
arbitral tribunal. Thus, the “dismissal” could not have
divested the CIAC of jurisdiction to ascertain the facts of
the case, arrive at a judicious resolution of the dispute and
enforce its award or decision.
Since the issues concerning the monetary awards were
questions of fact, the CA held that those awards were
inappropriate in a petition for certiorari. Such questions
are final and not appealable according to Section 19 of EO
1008, which provides that “arbitral awards shall be x x x
final and [u]nappealable except on questions of law which
shall be appealable to the Supreme Court x x x.”
Nevertheless, the CA reviewed the records and found that
the awards were supported by substantial evidence. In
matters falling under the field of expertise of quasi-judicial
bodies, their findings of fact are accorded great respect
when supported by substantial evidence.
_______________
5 The Arbitral Tribunal was composed of Joven B. Joaquin, chairman;

Atty. Alfredo F. Tadiar and Engr. Loreto C. Aquino, members.
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VOL. 359, JUNE 26, 2001 639

Commission
Hence, this petition.
Issues
The petitioner, in its Memorandum, raises the following

issues:
“A.
Whether or not the CIAC could take jurisdiction over the case of
Respondent Cid spouses against Petitioner Philrock after the case
had been dismissed by both the RTC and the CIAC.
“B.
Whether or not Respondent Cid spouses have a cause of action

against Petitioner Philrock.
“C.
Whether or not the awarding of the amount of P23,276.75 for

materials ordered by Respondent Spouses Cid plus interest
thereon at the rate of 6% from 26 September 1995 is proper.
“D.
Whether or not the awarding of the amount of P65,000.00 as

retrofitting costs is proper.
“E.
Whether or not the awarding of the amount of P1,340,454 for

the value of the delivered but the allegedly unworkable concrete
which was wasted is proper.
“F.
Whether or not the awarding o[f] moral and nominal damages

and attorney’s fees and expenses of litigation in favor of
respondents is proper.
_______________
6 This case was deemed submitted for decision upon this Court’s receipt
on October 21, 1999, of the Memorandum filed and personally signed by
Respondent Nelia Cid; Vicente, her husband, had died in the meantime.
The Memorandum for petitioner was signed by Atty. Pericles C. Consunji
of Ponce Enrile Reyes & Manalastas, while the Memorandum for Public
Respondent was signed by Assistant Solicitor Carlos N. Ortega and
Solicitor Geraldine C. Fiel-Macaraig.
640

Commission
“G.
Whether or not Petitioner Philrock

7
should be held liable for the
payment of arbitration fees.”
In sum, petitioner imputes reversible error to the CA (1) for

upholding the jurisdiction of the CIAC after the latter had
dismissed the case and referred it to the regular court, (2)
for ruling that respondent spouses had a cause of action
against petitioner, and (3) for sustaining the award of
damages.
This Court’s Ruling
The Petition has no merit.
First Issue:
Jurisdiction
Petitioner avers that the CIAC lost jurisdiction over the

arbitration case after both parties had withdrawn their
consent to arbitrate. The June 13, 1995 RTC Order
remanding the case to the CIAC for arbitration was
allegedly an invalid mode of referring a case for arbitration.
We disagree. Section 4 of Executive Order 1008
expressly vests in the CIAC original and exclusive
jurisdiction over disputes arising from or connected with
construction contracts entered into by parties that have 8
agreed to submit their dispute to voluntary arbitration.
_______________
7 Rollo, pp. 155-156.

8 “SECTION 4. Jurisdiction.—The CIAC shall have original and
exclusive jurisdiction over disputes arising from, or connected with,
contracts entered into by parties involved in construction in the
Philippines, whether the dispute arises before or after the completion of
the contract, or after the abandonment or breach thereof. These disputes
may involve government or private contracts. For the Board to acquire
jurisdiction, the parties to a dispute must agree to submit the same to
voluntary arbitration.
“The jurisdiction of the CIAC may include but is not limited to violation
of specifications for materials and workmanship; violation of the terms of
agreement; interpretation and/or application of contractual provi
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VOL. 359, JUNE 26, 2001 641

Commission
It is undisputed that the parties submitted themselves to

the jurisdiction of the Commission by virtue of their
Agreement to Arbitrate dated November 24, 1993.
Signatories to the Agreement were Attys. Ismael J. Andres
and Perry Y. Uy (president of Philippine Rock Products,
Inc.) for petitioner, and Nelia G.9 Cid and Atty. Esteban A.
Bautista for respondent spouses.
Petitioner claims, on the other hand, that this
Agreement was withdrawn by respondents on April 8,
1994, because of the exclusion of the seven engineers of
petitioners in the arbitration case. This withdrawal became
the basis for the April 13, 1994 CIAC Order dismissing the
arbitration case and referring the dispute back to the RTC.
Consequently, the CIAC was divested of its jurisdiction to
hear and decide the case.
This contention is untenable. First, private respondents
removed the obstacle to the continuation of the arbitration,
precisely by withdrawing their objection to the exclusion of
the seven engineers. Second, petitioner continued
participating in the arbitration even after the CIAC Order
had been issued.
10
It even concluded and signed the Terms of
Reference on August 21, 1995, in which the parties
stipulated the circumstances leading to the dispute;
summarized their respective positions, issues, and claims;
and identified the composition of the tribunal of
arbitrators. The document clearly confirms both parties’
intention and agreement to submit the dispute to voluntary
arbitration. In view of this fact, we fail to see how the CIAC
could have been divested of its jurisdiction.
Finally, as pointed out by the solicitor general,
petitioner maneuvered to avoid the RTC’s final resolution
of the dispute by arguing that the regular court also lost
jurisdiction after the arbitral tribunal’s April 13, 1994
Order referring the case back to the RTC.
_______________
sions; amount of damages and penalties; commencement time and

delays; maintenance and defects; payment; default of employer or
contractor and changes in contract cost.
“Excluded from the coverage of this law are disputes arising from
employer-employee relationships which shall continue to be covered by the
Labor Code of the Philippines.” (EO 1008)
9 Annex “C”; CA rollo for G.R. SP No. 39781, p. 29.
10 Annex “F”; CA rollo for G.R. SP No. 39781, pp. 188-203.
642

Commission
In so doing, petitioner conceded and estopped itself from

further questioning the jurisdiction of the CIAC. The Court
will not countenance the effort of any party to subvert or
defeat the objective of voluntary arbitration for its own
private motives. After submitting itself to arbitration
proceedings and actively participating therein, petitioner is
estopped from assailing the jurisdiction of the CIAC, 11
merely because the latter rendered an adverse decision,
Second Issue:
Cause of Action
Petitioner contends that respondent spouses were negligent

in not engaging the services of an engineer or architect who
should oversee their construction, in violation of Section
308 of the National Building Code. It adds that even if the
concrete it delivered was defective, respondent spouses
should bear the loss arising from their illegal operation. In
short, it alleges that they had no cause of action against it.
We disagree. Cause of action is defined as an act12 or
omission by which a party violates the right of another. A
complaint is deemed to have stated a cause of action
provided it has indicated the following: (1) the legal right of
the plaintiff, (2) the correlative obligation of the defendant,
and (3) the act or the omission
13
of the defendant in violation
of the said legal right. The cause of action against
petitioner was clearly established. Respondents were
purchasers of ready-mix concrete from petitioner. The
concrete delivered by the latter turned out to be of
substandard quality. As a result, respondents sustained
damages when the structures they
_______________
11 See Spouses Benitez v. Court of Appeals, 266 SCRA 242, January 16,
1997.
12 Camara v. Court of Appeals, 310 SCRA 608, 618, July 20, 1999; Delos
Reyes v. Court of Appeals, 285 SCRA 81, 85, January 27, 1998; heberman
Realty Corporation v. Typingco, 293 SCRA 316, 327, July 29, 1998.
13 Baluyot v. Court of Appeals, 311 SCRA 29, 45, July 22, 1999;
Vergara v. Court of Appeals, 319 SCRA 323, 327, November 26, 1999;
Leber-man v. Typinco, ibid., p. 328.
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VOL. 359, JUNE 26, 2001 643

Commission
built using such cement developed cracks and honeycombs.

Consequently, the construction of their residence had to be
stopped.
Further, the CIAC Decision clearly spelled out
respondents’ cause of action against petitioner, as follows:
“Accordingly, this Tribunal finds that the mix was of the right
proportions at the time it left the plant. This, however, does not
necessarily mean that all of the concrete mix delivered had
remained workable when it reached the jobsite. It should be noted
that there is no evidence to show that all the transit mixers
arrived at the site within the allowable time that would ensure
the workability of the concrete mix delivered.
“On the other hand, there is sufficiently strong evidence to
show that difficulties were encountered in the pouring of concrete
mix from certain transit mixers necessitating the [addition] of
water and physically pushing the mix, obviously because the same
[was] no longer workable. This Tribunal holds that the
unworkability of said concrete mix has been firmly established.
“There is no dispute, however, to the fact that there are defects
in some areas of the poured structures. In this regard, this
Tribunal holds that the only logical reason is that the unworkable
14
concrete was the one that was poured in the defective sections.”
Third Issue:
Monetary Awards
Petitioner assails the monetary awards given by the

arbitral tribunal for alleged lack of basis in fact and in law.
The solicitor general counters that the basis for petitioner’s
assigned errors with regard to the monetary awards is

purely factual and beyond the review of this Court.
Besides, Section 19, EO 1008, expressly provides that
monetary awards by the CIAC are final and unappealable.
We disagree with the solicitor general. As pointed out
earlier, factual findings of quasi-judicial bodies that have
acquired expertise are generally accorded great respect and
even finality, if they
_______________
14 CIAC Decision dated September 24, 1996; CA rollo for G.R. SP No.
42443, p. 42.
644

Commission
15
are supported by substantial evidence. The Court,
however, has consistently held that despite statutory
provisions making the decisions of certain administrative
agencies “final,” it still takes cognizance of petitions
showing want of jurisdiction, grave abuse of discretion,
violation of due process, denial of16 substantial justice or
erroneous interpretation of the law. Voluntary arbitrators,
by the nature of their functions, act in a quasi-judicial
capacity, such that
17
their decisions are within the scope of
judicial review.
Petitioner protests the award to respondent spouses of
P23,276.25 as excess payment with six percent interest
beginning September 26, 1995. It alleges that this item was
neither raised as an issue by the parties during the
arbitration case, nor was its justification discussed in the
CIAC Decision. It further contends that it could not be held
liable for interest, because it had earlier tendered a check
in the same amount to respondent spouses, who refused to
receive it.
Petitioner’s contentions are completely untenable.
Respondent Nelia G. Cid had already raised the issue of
overpayment even prior to the formal arbitration. In
paragraph 9 of the Terms of Reference, she stated:
“9. Claimants were assured that the problem and her demands
had been the subject of several staff meetings and that Arteche
was very much aware of it, a memorandum having been
submitted citing all the demands of [c]laimants. This assurance
was made on July 31, 1992 when Respondents Secillano,

Martillano and Lomibao came to see Claimant Nelia Cid and
offered to refund P23,276.25, [t]he difference between the billing
by Philrock’s Marketing Department in the amount of
P125,586.25 and the amount charged by Philrock’s Batching
Plant Department in the amount
_______________
15 Villaflor v. Court of Appeals, 280 SCRA 297, 330, October 9, 1997; Philippine
Merchant Marine School, Inc. v. Court of Appeals, 244 SCRA 770, 785, June 2,
1995; COCOFED v. Trajano, 241 SCRA 262, 268, February 15, 1995.
16 Villaflor v. CA, ibid.; De Ysasi III v. National Labor Relations Commission,
231 SCRA 173, 185, March 11, 1994.
17 Chung Fu Industries (Phils.), Inc. v. Court of Appeals, 206 SCRA 545, 556,
February 25, 1992.
645
VOL. 359, JUNE 26, 2001 645

of only P102,586.25,
18
which [claimant refused to accept by saying,
’saka na lang.’ ”
The same issue was discussed during the hearing 19

before
the arbitration tribunal on December 19, 1995. It was also
mentioned
20
in that tribunal’s Decision dated September 24,
1996.
The payment of interest is based on Article 2209 of the
Civil Code, which provides that if the obligation consists of
the payment of a sum of money, and the debtor incurs
delay, the indemnity for damages shall be the payment of
legal interest which is six percent per annum, in the
absence of a stipulation of the rate.
Awards for Retrofitting Costs. Wasted

Unworkable But Delivered
Concrete, and Arbitration Fees
Petitioner maintains that the defects in the concrete
structure were due to respondent spouses’ failure to secure
the services of an engineer or architect to supervise their
project. Hence, it claims that the award for retrofitting cost
was without legal basis. It also denies liability for the
wasted unworkable but delivered concrete, for which the
arbitral court awarded P13,404.54. Finally, it complains
against the award of litigation expenses, inasmuch as the
case should not have been instituted at all had respondents
complied with the requirements of the National Building

Code.
We are unconvinced. Not only did respondents disprove
the contention of petitioner; they also showed that they
sustained damages due to the defective concrete it had
delivered. These were items of actual damages they
sustained due to its breach of contract.
_______________
18 CA rollo for G.R. SP No. 39781, p. 195.

19 Ibid., pp. 118-120.
20 CA rollo for G.R. SP No. 42443, p. 36.
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Commission
Moral and Nominal Damages,

Attorney’s Fees and Costs
Petitioner assails the award of moral damages, claiming no
malice or bad faith on its part.
We disagree. Respondents were deprived of the comfort
and the safety of a house and were exposed to the agony of
witnessing the wastage and the decay of the structure for
more than seven years. In her Memorandum, Respondent
Nelia G. Cid describes her family’s sufferings arising from
the unreasonable delay in the construction of their
residence, as follows: “The family lives separately for lack
of space to stay in. Mrs. Cid is staying in a small dingy
bodega, while her son occupies another makeshift room.
Their only daughter stayed with 21
her aunt from 1992 until
she got married in 1996. x x x.” The Court also notes that
during the pendency of the case, Respondent Vicente 22
Cid
died without seeing the completion of their home. Under
the circumstances, the award of moral damages is proper.
Petitioner also contends that nominal damages should
not have been granted, because it did not breach its
obligation to respondent spouses.
Nominal damages are recoverable only if no actual or
substantial damages resulted 23
from the breach, or no
damage was or can be shown. Since actual damages have
been proven by private respondents for which they were
amply compensated, they are no longer entitled to nominal
damages.
Petitioner protests the grant of attorney’s fees, arguing

that respondent spouses did not engage the services of legal
counsel. Also, it contends that attorney’s fees and litigation
expenses are awarded only if the opposing party acted in
gross and evident bad faith in refusing to satisfy plaintiffs
valid, just and demandable claim.
_______________
21 Rollo, p. 198.
22 Respondent Nelia Cid’s Explanation; rollo, pp. 184-186.
23 Go v. Intermediate Appellate Court, 197 SCRA 22, 28-29, May 13,
1991; Ventanilla v. Centeno, 1 SCRA 215, 220, January 28, 1961;
RobesFrancisco Realty v. Court of First Instance, 86 SCRA 59, 65-66,
October 30 1978.
647
VOL. 359, JUNE 26, 2001 647

Commission
We disagree. The award is not only for attorney’s fees, but

also for expenses of litigation. Hence, it does not matter if
respondents represented themselves in court, because it is
obvious that they incurred expenses in pursuing their
action before the CIAC, as well as the regular and the
appellate courts. We find no reason to disturb this award.
WHEREFORE, the Petition is DENIED and the assailed
Decision AFFIRMED; however, the award of nominal
damages is DELETED for lack of legal basis. Costs against
petitioner.
SO ORDERED.
Melo (Chairman), Vitug, Gonzaga-Reyes and

Sandoval-Gutierrez, JJ., concur.
Petition denied, judgment affirmed with modification.
Notes.—To hold public officers personally liable for

moral and exemplary damages and for attorney’s fees for
acts done in the performance of official functions, the
plaintiff must prove that these officers exhibited acts
characterized by evident bad faith, malice or gross
negligence. But even if their acts have not been so tainted,
public officers may still be held liable for nominal damages
if they had violated the plaintiffs constitutional rights.
(Cojuangco vs. Court of Appeals, 309 SCRA 602 (19993)
In cases where no interest had been stipulated by the

parties, no accrued conventional interest could further earn
interest upon judicial demand. (David vs. Court of Appeals,
316 SCRA 710 [1999])
——o0o——
648
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2/10/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 359

632 SUPREME COURT REPORTS ANNOTATED

PHILROCK, INC., petitioner, vs. CONSTRUCTION

Actions; Arbitration; Construction Industry Arbitration

Same; Same; Same; Words and Phrases; “Cause of Action”

VOL. 359, JUNE 26, 2001 633

Philrock, Inc. vs. Construction Industry Arbitration Commission

cause of action against petitioner was clearly established.

payment of legal interest which is six percent per annum, in the

634 SUPREME COURT REPORTS ANNOTATED

Philrock, Inc. vs. Construction Industry Arbitration Commission

during the pendency of the case, Respondent Vicente Cid died

themselves in court, because it is obvious that they incurred

PETITION for review on certiorari of a decision of the

The facts are stated in the opinion of the Court.

Courts encourage the use of alternative methods of dispute

VOL. 359, JUNE 26, 2001 635

Before us is a Petition for Review under Rule 45 of the

“WHEREFORE, judgment is hereby rendered DENYING the

The assailed Resolution ruled in this wise:

“Considering that the matters raised and discussed in the motion

The undisputed facts of the consolidated cases are

“On September 14, 1992, the Cid spouses, herein private

1 Penned by Justice Ramon A. Barcelona with the concurrence of

636 SUPREME COURT REPORTS ANNOTATED

“Thereafter, preliminary conferences were held among the parties

‘x x x the Arbitral Tribunal hereby formally dismisses the above-

VOL. 359, JUNE 26, 2001 637

“On September 12, 1995, [P]etitioner Philrock filed its Motion to

evidence and to pay all fees assessed by it, otherwise x x x

‘WHEREFORE, judgment is hereby rendered in favor of the Claimant,

1. P23,276.25 representing the excess cash payment for materials

“Let a copy of this Decision be furnished the Honorable

Before the CA, petitioner filed a Petition for Review,

4 CA Decision, pp. 1-5; rollo, pp. 46-50.

638 SUPREME COURT REPORTS ANNOTATED

assailing the propriety of the monetary awards in favor of

earlier elevated by petitioner questioning the jurisdiction of

Ruling of the Court of Appeals

5 The Arbitral Tribunal was composed of Joven B. Joaquin, chairman;

VOL. 359, JUNE 26, 2001 639

Hence, this petition.

The petitioner, in its Memorandum, raises the following

Whether or not Respondent Cid spouses have a cause of action

Whether or not the awarding of the amount of P23,276.75 for

Whether or not the awarding of the amount of P65,000.00 as

Whether or not the awarding of the amount of P1,340,454 for

Whether or not the awarding o[f] moral and nominal damages

640 SUPREME COURT REPORTS ANNOTATED

Whether or not Petitioner Philrock

In sum, petitioner imputes reversible error to the CA (1) for

This Court’s Ruling

The Petition has no merit.

Petitioner avers that the CIAC lost jurisdiction over the

7 Rollo, pp. 155-156.

VOL. 359, JUNE 26, 2001 641

It is undisputed that the parties submitted themselves to

sions; amount of damages and penalties; commencement time and

642 SUPREME COURT REPORTS ANNOTATED