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SECOND DIVISION

March 25, 2015

G.R. No. 200759

FAJ CONSTRUCTION & DEVELOPMENT CORPORATION, Petitioner,

vs.
SUSAN M. SAULOG, Respondent.

DECISION

DEL CASTILLO, J.:

This case illustrates the oft-quoted principle that the Supreme Court is not a trier of facts and does not normally
undertake the re-examination of the evidence presented by the contending parties during trial.

This Petition for Review on Certiorari1 seeks to set aside the November 29, 2011 Decision2 and February 24, 2012
Resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 88385 affirming with modification the January 30, 2006
Decision4 of the Regional Trial Court (RTC) of Quezon City, Branch 220 in Civil Case No. Q-02-45865 and denying
petitioner's Partial Motion for Reconsideration,5 respectively.

Factual Antecedents

On June 15, 1999, petitioner FAJ Construction and Development Corporation and respondent Susan M. Saulog
entered into an Agreement6 (construction agreement) for the construction of a residential building in San Lorenzo
Village, Makati City for a contract price of P12,500,000.00. Payment to petitioner contractor shall be on a progress
billing basis, after inspection of the work by respondent.

Construction of the building commenced, and respondent made a corresponding total payment to petitioner in the
amount of P10,592,194.80. However, for the October 31 and November 6, 2000 progress billing statements sent by
petitioner in the total amount of P851,601.58, respondent refused to pay. After performing additional work, petitioner
made another request for payment, but respondent again refused to pay, prompting petitioner to terminate the
construction contract pursuant to Article 27(b) of the Uniform General Conditions of Contract for Private
Construction (or Document 102) of the Construction Industry Authority of the Philippines, Department of Trade and
Industry.7

Petitioner then sent demand letters to respondent on November 24, 2000 and September 28, 2001. In reply,
respondent claimed that petitioner’s work was defective, and that it should instead be made liable thereon.

Petitioner thus filed with the RTC of Quezon City a civil case for collection of a sum of money with damages against
respondent. Docketed as Civil Case No. Q-02-45865 and assigned to Branch 220, the Complaint8 alleged that
despite faithful compliance with the construction agreement, respondent refused to pay the outstanding balance of
P851,601.58, which prompted it to stop construction of the building. Petitioner thus prayed that respondent be
ordered to pay the amounts of P851,601.58 representing the unpaid billings; P625,000.00 representing the retention
amount; P50,000.00 for litigation expenses; 20% attorney’s fees and appearance fees, or P170,000.00; and costs of
suit.

In her Answer with Compulsory Counterclaim,9 respondent claimed that while she religiously paid petitioner
pursuant to their construction agreement, petitioner’s work was defective and delayed; that petitioner failed to
remedy said defects; that as a result, rainwater seeped through the building and caused extensive damage to the
unfinished building; and that she had to incur additional substantial expenses for the repair of the building, to
remedy the defects caused by petitioner, and to finish construction of the building. By way of counterclaim,
respondent prayed for an award of actual damages in the amount of P3,213,575.91; lost rentals amounting to
P5,391,456.00; additional consequential damages of P1,600,000.00 because she could not devote herself to her
work; additional costs of ongoing repair; P5,000,000.00 moral damages; P5,000,000.00 exemplary damages;
P1,387,500.00 as penalties for delay; attorney’s fees and P4,000.00 appearance fees per hearing; interest; and
costs of suit.

After pre-trial, the case was set for trial on the merits.

Petitioner presented its first witness on March 11, 2003. However, the presentation of the witness’s testimony was
not concluded as petitioner’s counsel did not have the required documentary evidence.10 Thus, petitioner moved for
a continuance.

After several opportunities for the presentation of its first witness, petitioner failed to proceed with trial. Its counsel
moved and asked for several postponements of trial, which the trial court granted despite respondent’s opposition.
However, petitioner’s counsel and witness failed to appear during the scheduled April 29, 2003 hearing, prompting
the trial court, upon respondent’s motion, to dismiss the case for failure to prosecute.11

Petitioner filed an unverified motion for reconsideration12 of the April 29, 2003 dismissal order, claiming that its
counsel was unable to attend the scheduled hearing because he suffered arthritis of the knee; however, the motion
was not accompanied by an affidavit or certification to the effect that the character of petitioner’s counsel’s illness is
such as to render his non-attendance excusable. Respondent opposed the motion.13 In a June 23, 2003 Order,14 the
trial court granted petitioner’s motion for reconsideration, thus recalling its April 29, 2003 dismissal order and setting
the case for hearing on July 29, 2003 for the continuation of the presentation of petitioner’s evidence.

On July 29, 2003, both petitioner and its counsel again failed to appear. The trial court reset the hearing to
September 4, 2003, with a warning that further postponement will not be tolerated.15

Petitioner once more moved for the postponement of the September 4, 2003 hearing, citing conflict of schedule.16
Respondent opposed the motion, claiming that there was a pattern on petitioner’s part to delay the disposition of the
case despite the trial court’s admonition that no further postponement will be allowed.

On September 4, 2003, petitioner and counsel again failed to appear for the continuation of trial. The trial court,
noting respondent’s manifestation, issued another Order dismissing the case for failure to prosecute, ordering that
the direct testimony of petitioner’s witness be stricken off the record, and setting the case for hearing on
respondent’s counterclaim.17

Petitioner again filed a motion for reconsideration18 of the above September 4, 2003 dismissal order, which
respondent opposed,19 and which the trial court denied in a December 16, 2003 Order.20 Petitioner filed a second
motion for reconsideration,21 but the same was denied in a January 14, 2004 Order.22 1âwphi1

Petitioner filed a petition for certiorari23 with the CA questioning the above December 16, 2003 and January 14,
2004 Orders of the trial court, claiming that they were issued with grave abuse of discretion; that the trial court erred
in denying a postponement of trial, in striking off the testimony of its witness, and in declaring that petitioner had the
propensity to delay the case. The Petition was docketed as CA-G.R. SP No. 82239.

On September 30, 2004, the CA issued its Decision24 in CA-G.R. SP No. 82239 dismissing the petition for certiorari
and affirming the trial court’s action, declaring that petitioner adopted a pattern of delay and was guilty of employing
dilatory maneuvers, trifling with respondent’s right to a speedy dispensation of justice, abusing the patience of the
trial court and wasting its time, squandering the people’s money, and impeding the administration of justice. It held
further that the trial court acted rightly in its resolution of the case, treating petitioner with liberality despite its trifling
with the expeditious administration of justice; that petitioner’s complaint was correctly dismissed for failure to
prosecute after it was given all the opportunity to present its evidence; that said dismissal operates as an
adjudication on the merits; that petitioner’s right to due process was not violated; and that petitioner’s second motion
for reconsideration is not allowed under Section 5, Rule 37 of the 1997 Rules of Civil Procedure.25 In addition, the
appellate court admonished petitioner’s counsel, reminding the latter not to delay his case, but rather to observe the
rules of procedure and not misuse them to defeat the ends of justice.

Petitioner took the matter to this Court, via a petition for review on certiorari docketed as G.R. No. 166336. However,
in a March 7, 2005 Resolution,26 the Petition was denied for failure to submit a verified statement of material date of
filing the motion for reconsideration of the assailed CA judgment, and for failure to show that the appellate court
committed any reversible error. In several other Resolutions27 of this Court, petitioner’s motions for reconsideration
and to refer the case to the Court en banc were denied on the ground, among others, that it failed to sufficiently
show that the CA committed any reversible error.
On January 17, 2006, an Entry of Judgment28 was issued by the Court stating that on August 16, 2005, its March 7,
2005 Resolution in G.R. No. 166336 became final and executory.

Ruling of the Regional Trial Court

In Civil Case No. Q-02-45865, respondent was allowed to present her evidence on the counterclaim. As found by
the CA, respondent’s evidence is as follows:

x x x. She presented the testimony of Rhodora Calinawan, the architect who conducted a complete
inspection of the project first in September 2000, and, second, in November 2000, after typhoon
Seniang. Rhodora Calinawan narrated her findings and identified the photographs submitted as proofs
of appellant’s29 substandard work. Among the defects she pointed out were the sloppily done flooring,
the unaligned electrical outlet and switch, dried cement and paint stained flooring, incorrect colored
cement used to fill the gap between the tiles, need to repair door jamb, sloppily done grouting of tiles,
incorrect luggage compartment doors, bubbles in the varnishing works, unaligned sanding of parquet
flooring, poor termination of shower and enclosure and bull nose wood moulding, dirty window sill, lack
of screws and rubber on the window, damaged roof panels, need for plashing and installation of drift
edges, and improper installation of asphalt shingles on the roof. After the typhoon, appellee30 also
requested her to make a second inspection. She prepared another report which listed the following
additional defects: the second floor parquet flooring was wet due to the typhoon because the windows
were not properly sealed, lacked sealant and rubber protector.

Susan Saulog took the stand on February 15, 2005. She testified on appellant’s defective work and the
damage caused by typhoon "Seniang" to the unfinished work, notwithstanding the fact that she had
already paid a total of P10,592,194.80. She refused to pay appellant the amount of P851,601.58
because the latter already collected advance payment but had a lot of unfinished work before it
abandoned the project. She made a counter-demand for P4,600,000.00 that excluded the lost revenue
for unearned rentals, exemplary and moral damages. She was supposed to earn P160,000.00 per
month from rentals starting July 2000. After appellant abandoned the project, she still spent
P3,820,796.21 to rectify and complete the same. The accounts chargeable to appellant were listed in
Exhibit 21, to wit:

ITEM NO. PARTICULARS AMOUNT

A Bestbuilt Steel Builders 785,299.12
B Sub-Contractor: Fizcon Enterprises 375,166.17
C Labor Contracts & Quotations 243,461.40
D Cash Advances for Materials by FAJ 186,236.62
E Professional Fees 631,666.46
F Rectification of Major Defective Works 422,563.77
G Other Charges 647,629.71
H Other Additional Construction Expenses for
528,772.96
Rectification & Repair Works
GRAND TOTAL AMOUNT 3,820,796.21

The penalty for delay is P12,500.00 per day. From July 30, 2000 up to November 17, 2000, the total
penalty amounted to P1,387,500.00. She suffered sleepless nights because she started to experience
frozen shoulder and trigger finger that necessitated the services of Dr. Alberto Lu, an acupuncturist.
Exhibits 30-34 comprised five receipts issued by Alberto M. Lou, evidencing payment of P400 for
services rendered. She claimed reimbursement for the amounts she paid to her counsel: P20,000.00
as acceptance fees; P4,000.00 per appearance and cost of suit which totaled P100,000.00. She spent
P60,000.00 and P7,000.00, respectively, for the services of Architect Calinauan and an accountant to
put the records in order. She claimed moral damages of P5,000,000.00.31

On January 30, 2006, the trial court rendered its Decision on respondent’s counterclaim, declaring as follows:

After carefully studying all the above evidence, this court resolves that defendant32 has proven her
following allegations and counterclaims, to wit:

(1)That, in fact, the construction work of plaintiff33 was not only delayed, but defective; and that plaintiff
abandoned the construction work, incomplete and with many defects. The evidence on record is
overwhelming and in addition to the testimonies of Arch. Rhodora Calinawan and the defendant
herself; the same is proven by Exhs. 1 – 1-B-4; 2 – 2-A; 3; 4 – 4-H-2; 5 – 5-G-2; 6 – 6-G-2; 7 – 7-E-2; 8
– 8-C; 9 – 9-M; 9-N – 9-EE; 15 – 15-A2; 15-B – 15-B-5; 15-B2 – 15-Z.
 (2)That defendant paid plaintiff the total amount of P10,592,194.80 before plaintiff abandoned the work
(Exhs. 16 – 16-Q).

(3)That defendant had to finish the work abandoned by plaintiff, incurring substantial additional
expenses therefor. This is also supported not only by her testimony, but by documentary evidence
presented by her (Exhs. 21; 20 – 20-A; 21 – 21-F; 22 – 22-CCC; 23 – 23-M; 24 – 24-JJJ; 25 – 25-S; 26
– 26-QQ; 28 – 28-AAAA-130; 29 – 29-JJJ).

(4)As to the claim of defendant for moral damages, the Court finds that she is entitled to moral
damages, but not for the amount she is claiming. The testimony given by defendant on how the
problems created by plaintiff affected her personally is believable; and furthermore, it is supported by
official receipts of an Acupuncture Consultant (Exhs. 30-34). This is one of the cases wherein moral
damages are allowed by Article 2220 of the New Civil Code. Breach of Contract where the defendant
acted fraudulently or in bad faith.

(5)With respect to exemplary damages, the Court perceives that same should be granted, but
moderates the same. Plaintiff being in the construction business to the public, should be deterred from
doing to others, what it did to defendant. This is one of the situations envisioned by Article 2229 of the
New Civil Code, for exemplary damages.

(6)The Court is convinced that attorney’s fees should also be adjudicated, considering the work that
counsel for defendant undertook. Attorney’s fees should be adjudicated, in accordance with Article
2208 of the New Civil Code.

(7)The Court is also persuaded to grant penalties for delay, as provided for in the agreement between
the parties (Exhs. 11-B-1 and 11-B-2).

(8)The Court, however, is not inclined to grant additional consequential damages of P1,600,000.00,
because this court finds that this claim has not been properly supported.

(9)Finally, the Court is inclined to grant defendant’s claim, for lost rentals, which is properly supported
by the testimony of defendant and very plausible under the circumstances, because one of the duplex
apartments was constructed for rental income purposes and its completion and rental was very much
delayed, because of the fault of plaintiff.

IN VIEW OF ALL THE FOREGOING, plaintiff FAJ Construction & Development Corporation is hereby
ordered to pay defendant Susan Saulog, the following amounts:

(1)P3,213,575.91 as actual damages;

(2)Lost rentals of P5,391,456.00;

(3)Moral damages of P500,000.00;

(4)Exemplary damages of P500,000.00;

(5)Penalties for delay amounting to P1,387,500.00;

(6)Attorney’s fees of P20,000.00, plus appearance fee of P4,000.00 per appearance, payable to
Atty. Alberto B. Guevara, Jr.;

(7)This court also grants 6% interest, on all the above amounts, commencing from the date of
the filing of the complaint, January 2, 2002.

This Court, however, dismisses the claim of Susan Saulog for additional consequential damages
amounting to P1,600,000.00, which has not been proven.

SO ORDERED.34

Ruling of the Court of Appeals

Petitioner filed an appeal with the CA. Docketed as CA-G.R. CV No. 88385, the appeal essentially argued that the
trial court erred in holding petitioner liable to the respondent for the amounts stated in the decretal portion of the trial
court’s decision. In addition, petitioner contended that it was erroneous for the trial court to have dismissed its
complaint for failure to prosecute, as it should not be penalized for the negligence of its counsel in the handling of
Civil Case No. Q- 02-45865, which is the sole reason for the dismissal thereof.
On November 29, 2011, the CA rendered the assailed Decision affirming with modification the January 30, 2006
Decision of the trial court, pronouncing thus:

Appellant35 now questions anew the propriety of the dismissal of the complaint on ground of failure to prosecute.
Appellant argues that it should not be made to suffer the consequences of the negligence or mistakes of its counsel.

This Court finds that any disquisition on this issue is improper for being barred by res judicata. x x x

More, appellant’s case was dismissed for failure to prosecute because of the numerous delays caused by its
counsel. Appellant cannot be excused from the actions of its counsel since it is likewise a settled rule that mistake[s]
of counsel binds the client. It is only in case of gross or palpable negligence of counsel when courts must step in
and accord relief to a client who suffered thereby. x x x

The next issue is: did appellee36 adequately prove her right to actual damages for rectification of appellant’s
defective work? Article 1715 of the Civil Code provides:

Article 1715. The contractor shall execute the work in such a manner that it has the qualities agreed upon and has
no defects which destroy or lessen its value or fitness for its ordinary or stipulated use. Should the work be not of
such quality, the employer may require that the contractor remove the defect or execute another work. If the
contractor fails or refuses to comply with this obligation, the employer may have the defect removed or another work
executed, at the contractor’s cost.

Evidently, Article 1715 gives the employer the options to require the removal of the work, to rectify the flaws in their
work, or to have the work done at the expense of the contractor.

Here, the defective workmanship was amply proven by Architect Rhodora Calinawan’s testimony and documentary
evidence i.e., photographs, receipts, and list of the expenses needed to rectify appellant’s poorly crafted work.
Hence, We sustain the award of actual damages based on these testimonial and documentary evidence.

Regarding the penalty for delay in the amount of One Million Three Hundred Eighty Seven Thousand Five Hundred
Pesos (P1,387,500.00), the same should also be sustained. A contract is the law between the parties, and they are
bound by its stipulations so long as they are not contrary to law, customs, public policy and public morals. The
penalty for delay is agreed upon by the parties themselves. The fact that appellant was already delayed in the
completion of the duplex is undisputed. In fact, record shows that on January 24, 2000, appellee approved the
extension requested by appellant. This request for extension, by itself, is already proof of delay. Thus, at the time
appellant abandoned the project, it already incurred delay. Verily, it is only proper that appellant be made to pay the
penalty for delay after appellee no longer agreed to any further extension.

We now go to the issue of damages.

Moral damages are recoverable for breach of contract where the breach was wanton, reckless, malicious or in bad
faith, oppressive or abusive. However, moral damages are improperly awarded, absent a specific finding and
pronouncement from the trial court that a party acted in such manner. Here, the only basis of the trial court in
granting moral damages of P500,000.00 was appellee’s gratuitous claim that she suffered sleepless nights for her
frozen shoulder and trigger finger, supposedly evidenced by 5 official receipts issued by her acupuncturist whom
she paid P400.00 per receipt. No evidence, however, was adduced showing that her frozen shoulder and trigger
finger were the direct result of the delayed project. The basis for such award is too shallow and evidently untenable,
hence, the same must be deleted.

As a consequence, the award of exemplary damages should also be vacated. x x x

Also, appellee does not dispute the fact that the total contract price was P12,500,000.00. After paying more than
P10,500,000.00, appellee made several demands for the parts that did not meet the agreed specifications. On the
other hand, appellant was of the firm belief that it had the right to work stoppage, as authorized under the
contractor’s manual. Both parties honestly believed that their respective actions were justified, hence, no bad faith
can be attributed to either party to merit the award of damages.

Too, this Court finds that the trial court erred in holding appellant liable for lost rentals in the amount of Five Million
Three Hundred Ninety One Thousand Four Hundred Fifty Six Pesos (P5,391,456.00). Unrealized profits fall under
the category of actual or compensatory damages. If there exists a basis for reasonable expectation of profits had
there been no breach of contract
contract, indemnification for damages based on such expected profits is proper. Here,
appellee did not present any evidence to show that there was already a potential lessee to one of the units of the
duplex. Even assuming that appellee may have presented evidence to show the existence of a future lessee, she
should have presented a contract of lease showing the contract price. She should have also shown that the rental
rate, at that time and in that area was, similar or at least approximately close to the amount of P160,000.00 per
month. Without any of these evidence, damages based on lost rental is purely speculative. In the same way that one
could speculate that the unit will be rented out, a person cannot be precluded from speculating that the other unit
may be occupied by a close relative for free. The court must rely on competent evidence and must avoid any
speculation or give premium to self-serving allegations. As stated, the award of P5,391,456.00 is in the nature of
actual damages. To be recoverable, actual damages must not only be capable of proof, but must actually be proved
with a reasonable degree of certainty. Courts cannot simply rely on speculation, conjecture, or guesswork in
determining the fact and amount of damages. To justify an award of actual damages, there must be competent proof
of the actual amount of loss. Credence can be given only to claims which are duly supported by receipts x x x.
These are not present in the case at bar.

As for attorney’s fees, it is well settled that the law allows judicial discretion to determine whether or not attorney’s
fees are appropriate. The surrounding circumstances of each case are to be considered. Here, We resolve to delete
the award of attorney’s fees since the trial court did not make any particular finding that any of the instances
enumerated in Art. 2208 of the Civil Code exists. More, it is settled that the award of attorney’s fees is the exception
rather than the general rule. Counsel’s fees are not awarded every time a party prevails in a suit because of the
policy that no premium should be placed on the right to litigate.

The trial court correctly imposed 6% interest on all awarded amounts commencing from the date of the filing of the
complaint. When an obligation, not constituting a loan or forbearance of money, is breached, interest on the amount
of damages awarded may be imposed at the discretion of the court at 6% per annum.

ACCORDINGLY, the appealed decision is AFFIRMED WITH MODIFICATION, deleting the award of lost rentals,
moral damages, exemplary damages, and attorney’s fees, including appearance fee.

SO ORDERED.37

Petitioner filed a Partial Motion for Reconsideration, but in a February 24, 2012 Resolution, the CA denied the same.
Hence, the present Petition.

Issues

In a January 28, 2013 Resolution,38 this Court resolved to give due course to the Petition, which raises the following
assignment of errors:

I.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT CONCLUDED THAT RES
JUDICATA APPLIES IN THE INSTANT CASE.

II.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT CONCLUDED THAT

PETITIONER IS LIABLE FOR ACTUAL DAMAGES, AND IN IMPOSING THE PENALTY FOR DELAY
AND AWARDING INTEREST ON ALL AMOUNTS DUE.39

Petitioner’s Arguments

In its Petition and Reply40 seeking to reverse and set aside the assailed CA dispositions and praying that judgment
be rendered absolving it from the adjudged pecuniary liabilities or, in the alternative, that a new trial of its case be
held, petitioner argues that res judicata cannot be made as basis to deny it the opportunity to question the dismissal
of its case and to present its evidence because the dismissal of its Petition in G.R. No. 166336 was not an
adjudication of the case on its merits; that the dismissal of Civil Case No. Q-02-45865 was not due to its fault, but
solely the gross negligence of its counsel; that the case should not have been dismissed as it was not guilty of lack
of diligence in failing to continue with trial with reasonable promptitude;41 that it should not be made liable for the
adjudged liabilities as they are bereft of factual and legal basis; that respondent’s witness, architect Rhodora
Calinawan (Calinawan), was not competent to testify, nor was she an objective, reliable, or trustworthy witness; that
the supposed actual damages suffered by respondent have not been adequately proved; that when respondent
refused to pay the outstanding balance, petitioner was justified in stopping work, and any damages suffered by
respondent thereafter may not be attributed to it but constitute damnum absque injuria; that the adjudged penalty for
its supposed delay is excessive; and that there is no basis to award interest.

Respondent’s Arguments

In her Comment,42 respondent contends that the issue of whether the trial and appellate courts correctly decided the
amount of damages is a factual issue which is beyond the jurisdiction of this Court; that with respect to the dismissal
of petitioner’s case in Civil Case No. Q-02-45865 for failure to prosecute, res judicata applies; that petitioner’s claim
that it should not be bound by the negligence of its counsel cannot stand because it was itself negligent in the
prosecution of its case despite having been given by the trial court all the opportunity to present evidence; that with
respect to the issue of damages, the factual findings of the trial and appellate courts may not be disturbed; that
petitioner failed to present evidence to controvert the trial and appellate courts’ findings; that the pecuniary liabilities
were justified as petitioner was guilty of delay, abandonment, and defective workmanship; that there is no ground to
reduce the amount of penalties for petitioner’s delay; and that the award of interest was proper.

Our Ruling

The Court denies the Petition.

Petitioner’s claim that res judicata cannot apply has no merit. This Court, in G.R. No. 166336, found nothing wrong
in the judgment of the CA in CA-G.R. SP No. 82239 affirming the dismissal of petitioner’s Complaint in Civil Case
No. Q-02-45865 for failure to prosecute. In fact, the Court found that the appellate court had not committed any
reversible error. This finding of lack of any reversible error is now final with the entry of judgment in G.R. No.
166336. Thus, petitioner could no longer prove its case, other than to present controverting evidence on
respondent’s counterclaim.

The Court has repeatedly said that minute resolutions dismissing the actions filed before it constitute actual
adjudications on the merits. They are the result of thorough deliberation among the members of the Court. When
1âwphi1

the Court does not find any reversible error in the decision of the CA and denies the petition, there is no need for the
Court to fully explain its denial, since it already means that it agrees with and adopts the findings and conclusions of
the CA. The decision sought to be reviewed and set aside is correct. It would be an exercise in redundancy for the
Court to reproduce or restate in the minute resolution denying the petition the conclusions that the CA reached.43

Next, petitioner’s argument that it should not be punished for the negligence of its counsel deserves the same
treatment. Suffice it to state that we have not seen any reason to reverse the CA’s ruling on this matter; on the other
hand, the record will disclose that petitioner was itself neglectful of its duties relative to its case, and it continued to
retain the services of its counsel which it now conveniently claims to be negligent, even after repeatedly suffering
from the latter’s claimed lack of care. It appears that despite witnessing firsthand the caliber of its lawyer during the
initial presentation of its evidence in 2003, petitioner changed counsel only after the trial court’s January 30, 2006
Decision on respondent’s counterclaim.44 The general rule still applies that the mistakes of counsel bind his client.

On the issue of liability, we find – relying on the identical findings of the trial and appellate courts – that petitioner is
guilty of violating the construction agreement, for its defective and incomplete work, delay, and for unjustified
abandonment of the project. Indeed, we find no reason to disturb the identical pronouncements of the trial court and
the CA. The same holds true with respect to the issue of damages raised by petitioner; it requires an inquiry into the
facts, which is no longer this Court’s realm. In a case previously decided by this ponente concerning a construction
contract and where similar allegations of abandonment, delay and defective workmanship were advanced, it was
held that –

Petitioner endeavors to convince us to determine, yet again, the weight, credence, and probative value of the
evidence presented. This cannot be done in this petition for review on certiorari under Rule 45 of the Rules of Court
where only questions of law may be raised by the parties and passed upon by us. In Fong v. Velayo, we defined a
question of law as distinguished from a question of fact, viz:

A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a
question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a question to be one of law,
the same must not involve an examination of the probative value of the evidence presented by the litigants or any of
them. The resolution of the issue must rest solely on what the law provides on the given set of circumstances. Once
it is clear that the issue invites a review of the evidence presented, the [question] posed is one of fact. Thus, the test
of whether a question is one of law or of fact is not the appellation given to such question by the party raising the
same; rather, it is whether the appellate court can determine the issue raised without reviewing or evaluating the
evidence, in which case, it is a question of law; otherwise, it is a question of fact.

It has already been held that the determination of the existence of a breach of contract is a factual matter not usually
reviewable in a petition filed under Rule 45. We will not review, much less reverse, the factual findings of the Court
of Appeals especially where, as in this case, such findings coincide with those of the trial court, since we are not a
trier of facts x x x.45

There is no ground either to doubt the testimony of Calinawan, who testified on the defective quality of petitioner’s
work and the state of construction after the latter abandoned the project. Her testimony merely corroborates already
existing evidence – such as photographs – as well as the testimony of respondent herself. All in all, these pieces of
evidence collectively proved the facts in issue. Besides, Calinawan need not be qualified as an expert witness in
order to testify on facts which are readily apparent to the eye, and even to the layman: it does not require an expert
to conclude that flooring is sloppily done, or that the electrical outlet and switch are not aligned, or that the flooring is
stained with paint, or that incorrect colored cement was used to fill the gap between tiles, or that a door jamb needs
repair, or that grouting of tiles is sloppily done, or that there are unwanted bubbles in the varnishing works, or that
the parquet flooring is unaligned or uneven, or that the window sills are dirty, or that windows lacked the necessary
screws and rubber, or that the roof panels are damaged, or that the installation of asphalt shingles on the roof was
improper. Any ordinary individual building a home would readily notice such defects.
Since respondent suffered damages as a result of petitioner’s defective and delayed work and unjustified
abandonment of the project, the principle of damnum absque injuria cannot apply. The principle cannot apply when
there is an abuse of a person’s right.46

Coming now to the issue of delay, we find that the trial and appellate courts’ grant of P1,387,500.00 not excessive; it
is, in fact, liberal. Construction period was agreed upon at 240 days from receipt by petitioner of a notice to
proceed.47 Said notice was issued on June 18, 1999,48 thus giving petitioner approximately eight months from said
date, or – roughly computed – up to February 18, 2000, to complete the project. Yet, petitioner was still working on
the project as late as on November 22, 2000, after which it stopped work and abandoned the project; this fact is not
denied by petitioner.49 Thus, petitioner was already delayed for more than nine months – that is, beginning March
2000 and ending November of the same year – or approximately 270 days. At P12,500.00 agreed penalty imposed
for each day of delay, petitioner should be correspondingly liable to respondent for P3,375,000.00 liquidated
damages, more or less, under the construction agreement.50 Yet, the courts below awarded a mere P1,387,500.00;
this award is certainly not excessive and should remain, accepted as it is without question by the respondent.

Finally, the imposition of 6% interest per annum is proper. Indeed, as correctly held by the CA, when an obligation,
not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may
be imposed at the discretion of the court at the rate of 6% per annum,51 from the filing of the complaint until its full
satisfaction.

WHEREFORE, the Petition is DENIED. The November 29, 2011 Decision and February 24, 2012 Resolution of the
Court of Appeals in CA-G.R. CV No. 88385 are AFFIRMED.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice

WE CONCUR:

ARTURO D. BRION*
Associate Justice
Acting Chairperson

JOSE CATRAL MENDOZA ESTELA M. PERLAS-BERNABE**

Associate Justice Associate Justice

MARVIC M.V.F. LEONEN

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned
to the writer of the opinion of the Court's Division.

ARTURO D. BRION
Associate Justice
Acting Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Acting Chairperson's Attestation, I certify that
the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer
of the opinion of the Court's Division.

MARIA LOURDES P.A. SERENO

ChiefJustice

Footnotes
*
Per Special Order No. 1955 dated March 23, 2015.
**
Per Special Order No. 1956 dated March 23, 2015.
1
Rollo, pp. 8-39.
2
Id. at 42-61; penned by Associate Justice Amy C. Lazaro-Javier and concurred in by Associate Justices
Remedios A. Salazar-Fernando and Sesinando E. Villon.
3
Id. at 96.
4
Id. at 98-104; penned by Judge Jose G. Paneda.
5
Id. at 62-77.
6
Records, Vol. I, pp. 7-17.
7
ART. 27: CONTRACTOR’S RIGHT TO SUSPEND WORK OR TERMINATE CONTRACT:

The Contractor may suspend work or terminate the Contract upon fifteen (15) days’ written notice to
the Owner for any of the following reasons:

a. If an order of any court or other public authority caused the work to be stopped or suspended
for an aggregate period of ninety (90) days through no act or fault of the Contractor or his
employees.

b. If the Owner shall fail to pay the Contractor the approved Request for Payment as
provided in Article 22.05.

c. If the Owner shall fail to pay the Contractor any sum within thirty (30) days after its award by
arbitration.

d.If the Owner suspends the work without just cause for more than the aggregate period of
fifteen (15) days without the Contractor’s consent. (Emphasis supplied)
8
Records, Vol. I, pp. 1-6.
9
Id. at 103-110.
10
Rollo, p. 100.
11
Records, Vol. I, pp. 197-198.
12
Id. at 199-200.
13
Id. at 207-211.
14
Id. at 211.
15
Id. at 213.
16
Id. at 215-216.
17
Id. at 218-219.
18
Id. at 220-222.
19
Id. at 229-236.
20
Id. at 241-242.
21
Id. at 247-248.
22
Id. at 257.
23
Id. at 258-273.
24
Rollo, pp. 164-183; penned by Associate Justice Celia C. Librea-Leagogo and concurred in by Associate
Justices Renato C. Dacudao and Lucas P. Bersamin (now a Member of this Court).
25
RULE 37. NEW TRIAL OR RECONSIDERATION

Sec. 5. Second motion for new trial. A motion for new trial shall include all grounds then available and
those not so included shall be deemed waived. A second motion for new trial, based on a ground not
 existing nor available when the first motion was made, may be filed within the time herein provided
excluding the time during which the first motion had been pending.

No party shall be allowed a second motion for reconsideration of a judgment or final order.
26
Rollo, p. 186.
27
Id. at 187-189.
28
Id. at 190-191.
29
Herein petitioner.
30
Herein respondent.
31
Rollo, pp. 48-51.
32
Herein respondent.
33
Herein petitioner.
34
Rollo, pp. 102-104.
35
Herein petitioner.
36
Herein respondent.
37
Rollo, pp. 53-61.
38
Id. at 280-281.
39
Id. at 19.
40
Id. at 228-247.
41
Citing Belonio v. Rodriguez, 504 Phil. 126, 146 (2005).
42
Rollo, pp. 121-156.
43
Agoy v. Araneta Center, Inc., G.R. No. 196358, March 21, 2012, 668 SCRA 883, 889.
44
Rollo, pp. 139-140.
45
Engr. Dueñas v. Guce-Africa, 618 Phil. 10, 18-19 (2009).
46
Amonoy v. Sps. Gutierrez, 404 Phil. 586, 593 (2001).
47
Records, Vol. I, p. 8.
48
Rollo, p. 151.
49
Records, pp. 19-21, 24, 42.
50
Id. at 8.
51
Nacar v. Gallery Frames, G.R. No. 189871, August 13, 2013, 703 SCRA 439, 458.

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