G.R. No. L-22710. June 30, 1967
DOMINGO BAUTISTA, PETITIONER, VS. THE COURT OF APPEALS, PHILIPPINE READY-MIXED CONCRETE CO., INC., AND CENTRAL SURETY & INSURANCE CO., RESPONDENTS.
SANCHEZ, J.:
In 1951 and 1952, Philippine Ready-Mixed Concrete Co., Inc.
[hereinafter called Prmcci] had various
road-building contracts with the Government of the Republic of the Philippines to be performed on Plaza Lawton [PR-521], Juan Luna and Plaza Moriones [PR-13(1)], España Extension [PR-65(3)], and Highway
54 [PR-10(9)].
Pursuant to Act 3688, “An Act for the protection of persons
furnishing materials and labor for the construction of public works”, Prmcci jointly and severally executed with Central Surety
& Insurance Co. [hereinafter referred to as Central] a performance
bond for P313,407.00, to secure the performance of the contract, and the payment of labor and materials used in the construction of Highway 54. The other projects were each covered by similar bonds.
Petitioner Domingo Bautista was the supplier of sand and gravel
and filling materials. To further assure
payment to petitioner of the construction materials for España
Extension and Highway 54, and
the batching plant at Port Area, Manila, respondents Prmcci
and Central executed in favor of
petitioner, another surety bond for P20,000.00.
Work commenced on these projects.
From time to time, petitioner delivered to Prmcci
the needed construction materials.
On January 31, 1952, petitioner lodged with the Court of First Instance of Rizal, a complaint against Prmcci
[Civil Case No. 1636, entitled
“Domingo Bautista, plaintiff vs. Philippine Ready-Mixed Concrete Co.,
Inc., and Central Surety &
Insurance Co., defendants”], for the recovery of P102,880.24, the
unpaid balance of the price of sand and gravel “furnished and delivered to the latter from
September, 1951 to January, 26, 1952,
which it used in its contracts with the Government and for its batching plant”. Central was
included in that complaint as defendant by reason of the P20,000.00-bond
heretofore adverted to.
On February 14, 1952, plaintiff [petitioner herein, Domingo
Bautista] defendant contractor Prmcci [principal
respondent herein] entered into a judicial compromise agreement in said Civil Case 1636, as follows:
“1. That the defendant Philippine Ready-Mixed Concrete
Company, Inc. acknowledges by virtue of these presents that it owes the
plaintiff the sum of P104,000.00 for all materials already supplied and
delivered to and used by the said corporation;
2. That for the payment on account of the said amount of
P104,000.00, the defendant corporation hereby irrevocably authorizes the
plaintiff to obtain in his own name from and by these presents empowers the
Bureau of Public Works to issue in the name of the plaintiff a check amounting
to P14,000.00 more or less on or before February 15, 1952 from any amount which
will be collected by the said corporation in connection with its contract
PR-521 [Plaza Lawton] and another check for P67,000.00 in his name to be
obtained from the said Bureau of Public Works on or before February 21, 1952 in
connection with contract PR-13(1), contract No. 1, comprising Plaza Moriones and Juan Luna, thus making a total of
approximately P81,000.00;
3. That the balance of P23,000.00 has already been assigned by the
defendant corporation to the plaintiff by virtue of the agreement had between
the parties in civil case No. 1482 of the Court of First Instance of Rizal;
4. That the price of all the supplies and materials which will be
delivered and supplied by the plaintiff to the defendant corporation subsequent
to this agreement shall be deducted from all weekly collections which will be
paid by the Bureau of Public Works to the said corporation in connection with
any contract or contracts which it has or might have with the Philippine
Ready-Mixed Concrete Company, Inc., it being expressly understood in this
connection that any assignment heretofore made and which may be made
hereinafter by the defendant corporation in favor of any person or persons,
firm or corporation should not be honored, respected and paid by the Bureau of
Public Works, Provided, furthermore, that for the failure of the plaintiff to
obtain the said weekly payments, he is hereby authorized and empowered to stop
the supply and delivery of materials which may be needed by the said defendant
corporation.”
On February 15, 1952, pursuant to the prayer in the foregoing compromise agreement,
the Court of First Instance rendered judgment “in accordance with the said agreement” without
pronouncement as to costs.
Came April 2, 1952. On
this date, petitioner Domingo Bautista instituted against respondent Prmcci
another civil action [Civil Case No. 1711, CFI, Rizal]
to recover P37,686.80 representing the unpaid balance of the sand and gravel “furnished
and delivered
to the latter during the months of February and March, 1952, which it used in its contracts with the
Government of the Republic of the Philippines, and for its batching
plant”. According to the judgment
of the Court of Appeals, that
case was then still pending before the court a quo.
Then, on July 31, 1952 the Director of Public Works wrote
petitioner Domingo Bautista, stating that the work on Highway 54 [contract
PR-10(9)], was completed on June 8, 1952 and that “after final
liquidation x x
x there will
be no further payment to be made by this Bureau to the contractor”; and
that petitioner could then “proceed to take necessary action” for the
recovery of his claim for materials supplied the contractor upon the
performance bond of P313,407.00 furnished by Central.
On October 3, 1952, Bautista filed the case now before us
[Civil Case No. 1888, Court of First Instance of Rizal]
against Prmcci
and Central to enforce against the performance bond the payment of an alleged
balance of the price of sand and gravel furnished and delivered to and used by
Prmcci for the construction of the Highway 54
project, in the total sum of P48,807.74.
Of this amount, the sum of P8,012.59
represents the value of construction materials from February 14, 1952 to March
31, 1952. The remainder, i.e.,
P40,795.15, was for the sand and gravel delivered to Highway 54 up to January 26, 1952 which was “included
in the complaint in Civil
Case No. 1636″.
On January 23, 1953, in this last Case 1888, pursuant to Act
3688, the Rizal court issued notice by publication,
to inform all unpaid suppliers of labor and materials about the pendency of the instant case. They were advised “to file their
claims” therein.
On May 22, 1953, Allied Enterprises Co., Inc. moved to
intervene. The complaint in intervention
avers that intervenor furnished crushed rock used in
Highway 54, and prays that, upon the provisions of Act 3688, Prmcci and Central be adjudged, jointly and severally, to pay intervenor the
balance of the value thereof in the sum of P13,629.42, with damages.
On November 24, 1953, the Court admitted the complaint in
intervention.
Upon the issues raised by the pleadings, and after trial,
judgment was, on January 3, 1956, rendered in Case 1888, as follows:
“WHEREFORE, judgment is rendered in favor of the plaintiff
Domingo Bautista and intervenor Allied Enterprises
Co., Inc. and against defendants, ordering defendants Philippine Ready-Mixed
Concrete Co., Inc. and Central Surety & Insurance Co., Inc. jointly and
severally to pay plaintiff Domingo Bautista the sum of P48,807.74 with interest at 6% per annum from
October 3, 1952 when the complaint was filed, and to pay the costs; and ordering
the same defendants jointly and severally to pay intervenor
Allied Enterprises Co., Inc. the sum of P13,629.42, with interest at 6% per
annum from May 26, 1953, when the complaint in intervention was filed, and to
pay the costs.”
Prmcci and Central separately moved to
reconsider.
On February 24, 1956, the trial court rendered an amended
judgment, viz:
“WHEREFORE, the dispositive portion of the judgment
dated January 3, 1956 is hereby amended to read as follows:
‘Wherefore, judgment is rendered in favor of the plaintiff Domingo
Bautista and intervenor Allied Enterprises Co., Inc.
and against defendants, ordering defendants Philippine Ready-Mixed Concrete
Co., Inc. and Central Surety &
Insurance Co., Inc. jointly and severally to pay plaintiff Domingo Bautista
the sum of P48,807.74, with interest at 6% per annum from October 3, 1952, when
the complaint was filed, and to pay the costs; and ordering the same defendants
jointly and severally to pay intervenor Allied
Enterprises Co., Inc. the sum of P13,629.42 with interest at 6% per annum from
May 26, 1953, when the complaint in intervention was filed, and to pay the
costs.
The Philippine Ready-Mixed
Concrete Co., Inc., is ordered to reimburse the Central Surety & Insurance
Co., Inc., any sum or sums of
money the latter would pay under the judgment to plaintiff and to intervenor.”
Central and Prmcci appealed to the
Court of Appeals.
In a decision promulgated on November 18, 1963, the court of
Appeals modified the judgment of the trial court as follows:
“WHEREFORE, with the modification that defendants-appellants
are jointly and severally ordered to pay plaintiff-appellee
Domingo Bautista only the sum of P8,012.59, the judgment appealed from is
hereby affirmed in all other respects.”[1]
The case is now before us on appeal by petitioner Domingo Bautista. Briefs were filed by petitioner and
respondent Central. Prmcci
did not submit a brief.
The correctness of the decision of the Court of Appeals directing
respondents to pay, jointly and severally, to petitioner the sum of P8,012.59
is not open to inquiry. Because said
respondents did not appeal from the judgment of the appellate court. Solely disputed here is the amount of
P40,795.15, balance of the value of the sand and gravel delivered to Highway 54
during the period from September
1951 to January 26, 1952.
With respect to the sum of P40,795.15, is the final judgment by
compromise in Civil Case 1636 [CFI, Rizal] a bar to
the present action [Civil Case 1888 of the same court)?
1. Here is the situation presented by the final judgment in the
first case, Civil Case 1636. Respondent Prmcci’s different obligations to petitioner under the
various public work projects were consolidated into one single amount of
P104,000.00. Payment of this obligation,
also by virtue of said judgment, would be taken from the following:
(a) By PEW check
in petitioner’s name which was to be issued on or before February 15, 1952, from any amount to be
collected under contract PR-521 [Plaza Lawton] . . . . . . . . . . . .
P14,000.00
(b) Another check to be obtained on or before February 21, 1952 in connection with contract
PR-13(1) [Plaza Moriones and Juan Luna) . . . P67,000.00
(c) Amount already assigned by Prmcci to
petitioner by virtue of the agreement had by the parties in Civil Case No.
1482, CFI, Rizal . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . P23,000.00
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . P104,000.00
That payment of the amounts just listed, totalling P104, 000.00 had been made, is beyond debate. Therefore, upon the terms of the compromise
agreement of February 14, 1952, reduced to judgment on February
15, 1952 in Civil
Case 1636, that judgment for P104,000.00 had been fully satisfied.
Not that petitioner Bautista did not consider himself bound by
the agreement and judgment in Civil Case 1636. Proof: when he subsequently filed on April 2, 1952 another suit, Civil Case 1711, CFI, Rizal,
against the same respondent Prmcci, he only prayed
for P37,686.80, the unpaid balance on the sand and gravel used in Prmcci’s contracts, during the months of February and
March, 1952. In Case 1711, he did not
lay claim to any amount due him – upon the Highway 54 account – prior to
the judgment in Case 1636.
But, thereafter, came the letter
of the Director of Public Works of July 31, 1952 addressed to petitioner. The suggestion therein that petitioner sue Prmcci on the latter’s P313,407.00-bond, naturally opened
petitioner’s eyes. He registered the
present suit, Case 1888, CFI-Rizal. This time, he sought to recover not only
for deliveries made subsequent to the judgment in Case 1636. He also
prayed for judgment for an alleged amount still unpaid on the deliveries of
materials for Highway 54 prior to February 4, 1952, for which judgment was already rendered in Case
1636. To our mind, Case 1888, this case,
is but an eleventh-hour effort to shy
away from the import of the
agreement and judgment in Case 1636. For
now, attempt is made by petitioner to apply the collections (enumerated in, and
to be applied by the terms of, the judgment in Case 1636, to the
obligation of P104,000.00), first, “to the accounts of the particular
projects from which the money came and the surplus of such collections from
the other projects to the account of Highway 54”. Aptly did the Court of Appeals state:
“Such application of payments would be proper if it is not clearly
deduced from the compromise agreement that the total payment of P104,000.00 by
the Bureau of Public Works consisting of P14,000.00,
more or less; to be covered by a check to be issued on or before February 15,
1952, from any amount collectible under contract PR-521 [Plaza Lawton]
and P67,000.00 to be obtained from said Bureau through another check to be
issued on or before February 21, 1952, collectible
under contract PR-13(1) comprising Plaza Moriones and
Juan Luna, or a total of approximately P18,000.00, plus the balance of P23,000.00 assigned by defendant
corporation to plaintiff by virtue of the agreement had between the parties in
Civil Case No. 1482 of the Court of First Instance of Rizal,
covered all the indebtedness of the Philippine Ready-Mixed Concrete Co., Inc.
for construction materials already supplied and delivered to and used by said
corporation during the period from September 12, 1951 to January 31, 1952. Evidently the cost of these construction
materials were all paid for by applying said sum of P104,000.00 to the
balance of all accounts due unpaid on February 14, 1952, the date of the compromise
agreement. Consequently, any application
of payment made at variance with the intent behind the agreement in the
judicial compromise cannot be sanctioned.
Furthermore, it appears from plaintiff’s evidence that a part of
the account for Highway 54 had been paid from the surplus funds from other
projects (Exhibits D and D-5). These
surplus funds include treasury warrants from the Bureau of Public Works dated March 18, 1952, and March 24, 1952 (Exhibits D-7 and D-8). If the collection on these dates were already
considered as
‘surplus
funds from
other projects’ and, therefore, the account for these other projects had
already been fully settled, we see no
reason why plaintiff instituted Civil Case No. 1711 on April 2, 1952, allegedly
to collect the payment of the unpaid deliveries for all projects during the
months of February and March, 1952.
Again, why did plaintiff’s witness, Jaime Bautista, testify during the
trial of the instant case, while Civil Case No. 1711 was still pending, that
the accounts for all projects except that for Highway 54 had already been
settled, although it appears that the last check paid for these projects was dated
March 24, 1952? The only logical and
reasonable explanation that can be drawn from these apparently irreconcilable
facts is
that, in accordance with the
terms of the judicial compromise, plaintiff did apply the collections from the
Bureau of Public Works to the accounts for the deliveries made to all the
projects during the period from September 12, 1951, to January 26, 1952, and thereafter instituted Civil Case No. 1711 for the payment of the deliveries to
all projects made during the months of February and March 1952. After the filing of said case, plaintiff
received the letter from the Bureau of Public Works informing him that he could
proceed against the performance bond for all unpaid claims for Highway 54. In order to take advantage of the security of
the bond, plaintiff changed the application of payments by settling first all
the accounts for the other projects from the collections received from the
Bureau of Public Works including those already applied in accordance with the
terms of the judicial compromise in Civil Case No. 1636, so as to leave only
the account for Highway 54 as still unpaid.
Plaintiff, however, cannot, by the simple expedient of changing the
application of payments, revive an obligation that had been legally
extinguished by payment.”
2. Petitioner seeks protection in the P313,407.00-performance bond
given under Act 3688. But, as far as his claim to any amount due
before the judgment in Case 1636, petitioner lost his recourse thereto. He cannot now undo what was effectively
concluded by the judgment in Civil Case 1636.
By that
judgment, the identity of each separate account of Prmcci
as of February 14, 1952,
had been entirely extinguished. Only
one account that very date
existed, and it was
fixed at P104,000.00. And there was no
breakdown to indicate how much of that amount pertains to one project or the
other. The parties consolidated the
accounts into one single obligation of P104,000.00. Included in that obligation is the present
claim for P40,795.15; and this has been paid by reason of the judgment.
To allow petitioner to clamp liability for that amount upon the
performance bond of P313,407.00, is to
allow him to go back to the situation before the final judgment on the
compromise agreement was entered. This cannot be done. Non quieta
movere.
3. We look at this case from the viewpoint of Central. Upon the performance bond of P313,407.00,
Central’s and Prmcci’s liability is joint and
several. Covered by that bond is the
amount P40,795.15. This last sum has
been paid by one of the solidary debtors, Prmcci. This payment
wipes out the obligation. Perforce,
Central’s liability upon the performance bond, to that extent, must also be
considered extinguished.[2]
For the reasons given, the judgment of the Court of Appeals under
review is hereby affirmed. Costs on
appeal to this Court against petitioner.
So ordered.
Concepcion, C.J., Reyes, J.B.L., Makalintal, Bengzon, J.P., Zaldivar and Ruiz Castro,
JJ., concur.
[1]
CA-G. R. No. 26910-R, “Domingo Bautista, plaintiff-appellee,
vs. Philippine Ready- Mixed Concrete Co., Inc. and Central Insurance
Company, Inc., defendants-appellants; “
[2]
Art. 1217, Civil Code: “Payment
made by one of the solidary debtors extinguishes the obligation. x x x.” Wilson vs. Berkenkotter, 92 Phil, 918, 923; Camus
vs. Court of Appeals, 107 Phil., 4.