THIRD DIVISION
[G.R. No. 157899. March 21, 2018.]
CALOOCAN CONSORTIUM CORPORATION, petitioner, vs. HON. COURT OF APPEALS, HON. JUDGE ANTONIO J. FINEZA, PRESIDING JUDGE OF REGIONAL TRIAL COURT, CALOOCAN CITY, BRANCH 131, AND REMAL ENTERPRISES, INC., respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Third Division, issued a Resolution datedMarch 21, 2018, which reads as follows:
"G.R. No. 157899 (CALOOCAN CONSORTIUM CORPORATION, Petitioner, v. HON. COURT OF APPEALS, HON. JUDGE ANTONIO J. FINEZA, Presiding Judge of REGIONAL TRIAL COURT, Caloocan City, Branch 131, and REMAL ENTERPRISES, INC., Respondents.) — The petitioner urges the Court to reverse the decision of January 16, 2003, 1 whereby the Court of Appeals (CA) upheld the orders issued on June 6, 2001 and August 27, 2001 in Civil Case No. C-18919 by the Regional Trial Court (RTC), Branch 131, in Caloocan City. AIDSTE
The factual antecedents follow.
The petitioner entered into a construction agreement with respondent Remal Enterprises, Inc. (REI) for the construction of the latter's warehouse within 330 days from the execution of the contract. 2 Pursuant to the contract, REI secured a construction bond of P5,000,000.00 from Pioneer Insurance and Surety Corporation (Pioneer). As the construction progressed, the petitioner informed REI of changes necessary to avoid accident and to maintain the safety and integrity of the warehouse, and requested REI for the approval of the changes, the corresponding additional costs and extension of construction period. REI did not agree to the request, rendering the petitioner to incur delay thereafter. REI was prompted to recover from the construction bond and to take over the project.
To prevent REI from proceeding against the bond, the petitioner sued REI and Pioneer for collection of sum of money and specific performance. 3 The complaint, docketed as Civil Case No. C-18919, was raffled to Branch 131 of the RTC in Caloocan City.
In its answer to the complaint, 4 REI averred that the proposed changes were invalid absent its approval pursuant to Article 11 of the construction agreement; and that the delay incurred by the petitioner by reason of the disapproval of the changes was unjustified.
On October 6, 1999, 5 the RTC enjoined Pioneer from releasing the performance bond until REI could present sufficient evidence to justify the release. AaCTcI
Realizing the need to protect the unfinished warehouse from further damage should construction be discontinued, REI filed an Ex-parteMotionto Rescind the Construction Agreement. 6
On June 6, 2001, the RTC granted the Ex-parteMotion to Rescind the Construction Agreement. 7
The RTC denied the petitioner's motion for reconsideration on August 27, 2001. 8
Thus, the petitioner assailed the orders dated June 6, 2001 and August 27, 2001 in the CA by petition for certiorari, 9 asserting that the RTC had thereby gravely abused its discretion amounting to lack or excess of jurisdiction. acEHCD
On January 16, 2003, 10 the CA dismissed the petition for certiorari, holding thusly:
We have reviewed once again the issues and the evidence in this case. We find no merit in this petition. x x x.
Article 1191 of the New Civil Code refers to rescission applicable to reciprocal obligations. Reciprocal obligations are those which arise from the same cause, and in which each party is a debtor and a creditor of the other, such that the obligation of one is dependent upon the obligation of the other. They are to be performed simultaneously such that the performance of one is conditioned upon the simultaneous fullfilment of the other.
Rescission of reciprocal obligations under Article 1191 of the New Civil Code should be distinguished from rescission of contracts under Article 1383. The former is a principal action based on breach of party, while the latter is a subsidiary action limited to cases of rescission for lesion under Article 1381 of the New Civil Code.
A perusal of the case shows that the petitioner failed to comply with what is incumbent upon it, that is, to finish the construction of the warehouse within the time agreed upon. It must be stressed that the breach contemplated in Article 1191 of the New Civil Code is the obligor's failure to comply with an obligation already extant, as in the case at bay. Hence, the construction agreement between the parties may be rescinded. SDHTEC
It is worthy to note that the action for rescission maybe made judicially or extra-judicially. No separate action is needed. What is essential is that rescission must be based on a serious breach of an obligation as to defeat the object of the parties in making the agreement.
In the Notice of Award and Decision of the Construction Arbitration Commission, it was found out that the petitioner has completed only 73.75% of the project. The remaining 26.25% of the uncompleted project is considered substantial enough to entitle the private respondent to avail of its right of rescission. Accordingly, the private respondent is entitled to proceed with the performance bond of the petitioner corresponding to the 26.25% of the said uncompleted project, not the whole amount therefore, to answer for damages sustained. HSAcaE
As held in the case of Central Bank of the Philippines and Acting Director Antonio T. Castro, Jr., etc. vs. Court of Appeals and Sulpicio M. Tolentino, "Rescission is the only alternative remedy left. WE rule, however, that rescission is only for the P63,000.00 balance of the P80,000.00 loan, because the bank is in default only insofar as such amount is concerned, as there is no doubt that the bank failed to give P63,000.00. x x x"
In view of the foregoing consideration and absent any showing of grave abuse of discretion on the part of the respondent judge in issuing the assailed orders, the petition must be dismissed.
WHEREFORE, the petition is hereby DENIEDDUECOURSE and is accordingly DISMISSED for lack of merit.
SO ORDERED.
On April 23, 2003, the CA denied the petitioner's motion for reconsideration. 11
Hence, this appeal, whereby petitioner insists that the CA erred in denying due course to the petition for certiorari considering that the RTC had clearly gravely abused its discretion amounting to lack or in excess of jurisdiction in granting REI's Ex-parteMotion to Rescind the Construction Agreement, and ordering the unilateral rescission of the contract upon the ex parte motion; and in granting the ex parte motion in violation of the rule against forum shopping. HESIcT
In the meanwhile, the RTC went on with the trial of Civil Case No. C-18919, and ultimately rendered judgment on September 13, 2012, decreeing:
WHEREFORE, in view of the foregoing observations and disquisitions, the case is DISMISSED without prejudice.
SO ORDERED. 12
After REI sought partial reconsideration, the RTC issued its resolution of November 6, 2014 granting the motion, viz.:
WHEREFORE, in view of the disquisitions above, the Court resolves to PARTIALLY GRANT the Motion for Partial Reconsideration, that is, as regards the payment and/or release of the performance bond and for the payment of damages and attorney's fees only. caITAC
Accordingly,
Pioneer Insurance is hereby directed to pay Remal Enterprises, Inc. the full amount of the Performance Bond amounting to Five Million Pesos (Php5,000,000.00).
Caloocan Consortium Corporation is directed to pay Two Hundred Thousand Pesos (Php200,000.00) by way of damages and attorney's fees to defendant Remal.
SO ORDERED. 13
On appeal by the petitioner, the CA promulgated its assailed decision on July 25, 2016 affirming the resolution dated November 6, 2014, 14 to wit:
WHEREFORE, in light of the foregoing, the assailed Resolution of the Regional Trial Court of Caloocan City, Branch 122, in Civil Case No. C-18919 is AFFIRMED with MODIFICATION, consisting of: (1) increasing the amount of liquidated damages to be paid by Caloocan Consortium Corporation to Remal Enterprises, Inc. to P500,000.00; and (2) the deletion of the award of attorney's fees.
SO ORDERED. 15
The foregoing developments in Civil Case No. C-18919, particularly the rendition of the judgment by the RTC and the CA's affirmance of both the judgment and its ensuing modification, are supervening events that definitely demonstrated that the issue posed in this appeal of whether or not the CA erred in upholding the the assailed June 6, 2001 and August 27, 2001 orders issued by the RTC in Civil Case No. C-18919 has been rendered moot and academic. In other words, for the Court to still resolve the issue will be a useless and vain formality. cDHAES
Moot and academic cases cease to present any justiciable controversies by virtue of supervening events. 16 As the Court has put it:
No useful purpose would then be served by passing on the merits of the petition. Any ruling in the instant case could hardly be of any practical or useful purpose in the premises. It is a settled rule that a court will not determine moot question or abstract proposition, nor express an opinion in a case in which no practical relief can be granted. 17
WHEREFORE, the Court DISMISSES the appeal; and DECLARES this case CLOSED and TERMINATED.
No pronouncement on costs of suit. (Leonen, J.,on official leave.)
SO ORDERED."
Very truly yours,
(SGD.)WILFREDO V. LAPITANDivision Clerk of Court
Footnotes
1.Rollo, pp. 186-190; penned by Associate Justice Eubulo G. Verzola, with the concurrence of Associate Justice Candido V. Rivera and Associate Justice Amelita G. Tolentino.
2. Id. at 34-39.
3. Id. at 26-33.
4.Id. at 87-95.
5.Id. at 124-126.
6.Id. at 129-139.
7.Id. at 133.
8.Id. at 134.
9.Id. at 135-156.
10.Id. at 186-190.
11. Id. at 203-204.
12. Id. at 325.
13. Id. at 299 (as quoted in the decision of the CA).
14. Supra note 1.
15. Id.; to be noted is that the information on the proceedings and decisions taken by the RTC and the CA was relayed to the Court by the petitioner through its compliance with the various resolutions of the Court, including the resolution of July 25, 2016, whereby the Court required the parties, particularly the petitioner, to render updates on the status of Civil Case No. C-18919 (rollo, p. 283-284).
16. Province of Batangas v. Romulo, 429 SCRA 736 (May 27, 2004).
17. Bongat v. Bureau of Labor Relations, 136 SCRA 225, 229; Central Azucarera Don Pedro v. Don Pedro Security Guards Union, 22 SCRA 1053.