ARCH. EUSEBIO BERNAL, DOING BUSINESS UNDER THE NAME AND STYLE CONTEMPORARY BUILDERS, PLAINTIFF-APPELLEE, VS. DR. VIVENCIO VILLAFLOR & DRA. GREGORIA VILLAFLOR, DEFENDANTS-APPELLA…

Bernal versus Villaflor

The Case

This is a case about a construction contract that grew beyond its written terms. Architect Eusebio Bernal, doing business as Contemporary Builders, sued the spouses Doctor Vivencio Villaflor and Doctor Gregoria Villaflor for a sum of money and damages, asking the court to attach their property, on the theory that they still owed him for building their Medical Arts Building in Dagupan City, including eighteen change orders made along the way. The Villaflors answered that they had already overpaid, that the billings were padded, and that the architect abandoned the project. The case matters because it shows how a court, faced with competing technical estimates, resolves a construction claim on preponderance of evidence, and why a party is strictly held to the amount he himself pleaded in his complaint.

Procedural History

The case began in the Regional Trial Court of Dagupan City, Branch 41, as a complaint for sum of money and damages with a prayer for preliminary attachment. The trial court granted the writ of preliminary attachment, and later created a Fact Finding Committee of three technical men, one of them its chairman, to inspect the building and report on the plans, the materials, the compliance with specifications, and whether the claimed change orders actually appeared in the structure. After trial, the trial court rendered its decision in January 2009, ordering the Villaflors to pay the architect two million eight hundred forty eight thousand pesos with legal interest, plus two hundred thousand pesos in attorney's fees, and dismissing all other claims and counterclaims. The Villaflors appealed, assigning as errors the trial court's computation of the total work performed, its conclusion that they were liable, its failure to consider their charge of fraud, and its dismissal of their counterclaims. The appeal reached the Supreme Court, which resolved the assigned errors on the evidence already on record.

Facts

In 1995 the Villaflors engaged Architect Bernal to construct a Medical Arts Building for an original contract price of seven million eight hundred thousand pesos. The Construction Agreement provided that upon signing, the owners would advance two million pesos as downpayment. Construction actually began in November 1995, after the owners delivered post-dated checks totaling two million five hundred thousand pesos. As the work progressed, the owners caused eighteen change orders to be made, which were not covered by the Agreement. The architect did not require formal change order request forms, because the parties were close family friends and he feared antagonizing well known doctors in the city, though he reminded them that the changes carried additional cost and they assured him they would pay.

The architect claimed the eighteen change orders totaled nine million seven hundred ninety six thousand eight hundred sixteen pesos and ninety four centavos, bringing the entire construction cost to seventeen million five hundred ninety six thousand eight hundred sixteen pesos and ninety four centavos. The owners made several payments, and after demands and a partial payment of one million five hundred forty three thousand sixty one pesos and fifty nine centavos, the architect claimed a remaining balance of three million two hundred forty one thousand eight hundred pesos, which the owners refused to pay.

The owners countered that they had paid in full, that the billings were lump sum and unsubstantiated, that they had asked in writing for an itemized costing and never received it, that the architect left the building five percent unfinished, and that he had reduced its area by about sixty three square meters. The trial court's Fact Finding Committee inspected the building and reported on items billed but not existing, and items existing but not billed. The trial court ruled for the architect, and the owners appealed.

Issues

• Whether or not the trial court erred in ruling that the Villaflors were liable to the architect for the unpaid construction cost, and in its computation of that amount.
• Whether or not the architect committed fraud in the performance of his obligation to the Villaflors.
• Whether or not the trial court erred in dismissing the counterclaims of the Villaflors.

Applicable Provisions

The decision rests on the rule on burden of proof in civil cases, which the Court states as follows:

It is elementary that in civil cases, a preponderance of evidence is necessary. Preponderance of evidence is the evidence which is more convincing to the court as worthy of belief than that which is offered in opposition thereto. Therefore, the party, whether plaintiff or defendant, who asserts the affirmative of the issue has the burden of proof to obtain a favorable judgment.

This governs who must persuade the court, and it is the standard against which the architect's claim and the owners' defenses and counterclaims are both measured.

Ruling

On the first issue, the Court ruled in the negative: the trial court did not err in holding the Villaflors liable. The architect had established by preponderance of evidence that the owners owed the unpaid balance of the construction cost, including the change orders, through his own testimony, the testimony and detailed reports of his engineer, the minutes of a meeting, his affidavit of merit, his details of costs, and his demand letters. The Court, however, corrected the computation. It fixed the total cost of the eighteen change orders at the amount claimed in the Complaint, nine million seven hundred ninety six thousand eight hundred sixteen pesos and ninety four centavos, even though the architect proved a slightly higher figure, because a party is bound by his own pleading. It disallowed the credit of two hundred seventy one thousand nine hundred fifteen pesos and ninety nine centavos for items found on the building but never billed, since this was never alleged nor prayed for in the Complaint. It also rejected the trial court's use of thirteen million five hundred twenty eight thousand two hundred pesos as the total payments made, because the Complaint itself alleged a different total construction cost and a different payment history.

On the second issue, the Court found no fraud. The owners' charge of overbilling and ghost billing did not overcome the evidence that the architect performed the work and that the change orders were requested and assured of payment. On the third issue, the Court likewise found no error in dismissing the counterclaims, as the owners failed to substantiate them by the required preponderance of evidence.

Doctrine

First, in a civil action for a sum of money arising from a construction contract, the plaintiff must establish his claim by preponderance of evidence, meaning evidence more convincing to the court than that offered in opposition. Second, a party is bound by the amount and the allegations of his own complaint; a court cannot award more than what was pleaded and prayed for, nor credit an item never alleged. Third, where the trial court's computation of damages rests on figures inconsistent with the pleadings and the evidence, the appellate court may correct the computation while affirming the finding of liability. Fourth, a charge of fraud in the performance of a contract must itself be proved by preponderance of evidence, and a counterclaim unsupported by such evidence must fail.

Disposition

The Supreme Court affirmed the finding of liability of the Villaflors to Architect Bernal, corrected the computation of the unpaid construction cost in accordance with the amounts pleaded in the Complaint, and sustained the dismissal of the counterclaims.

Remember This

Memorize this line: a party is bound by the amount he himself pleads, and every civil claim, including a charge of fraud, rises or falls on preponderance of evidence. Examiners use this case to test the burden of proof in civil cases and the rule that a court cannot award what the complaint never prayed for.