KHRISTINE REA M.

REGINO, Assisted and Represented by ARMANDO

REGINO, petitioner, vs.
PANGASINAN COLLEGES OF SCIENCE AND TECHNOLOGY, RACHELLE
A. GAMUROT and ELISSA BALADAD, respondents.
The Case
Before the Court is a Petition for Review under Rule 45,1 seeking to
nullify the July 12, 20022 and the November 22, 20023 Orders of the
Regional Trial Court (RTC) of Urdaneta City, Pangasinan (Branch 48) in
Civil Case No. U-7541. The decretal portion of the first assailed Order
reads:
"WHEREFORE, the Court GRANTS the instant motion to dismiss for
lack of cause of action."4
The second challenged Order denied petitioner's Motion for
Reconsideration.
The Facts
Petitioner Khristine Rea M. Regino was a first year computer science
student at Respondent Pangasinan Colleges of Science and
Technology (PCST). Reared in a poor family, Regino went to college
mainly through the financial support of her relatives. During the
second semester of school year 2001-2002, she enrolled in logic and
statistics subjects under Respondents Rachelle A. Gamurot and Elissa
Baladad, respectively, as teachers.
In February 2002, PCST held a fund raising campaign dubbed the
"Rave Party and Dance Revolution," the proceeds of which were to go
to the construction of the school's tennis and volleyball courts. Each
student was required to pay for two tickets at the price of P100 each.
The project was allegedly implemented by recompensing students
who purchased tickets with additional points in their test scores;
those who refused to pay were denied the opportunity to take the
final examinations.

Financially strapped and prohibited by her religion from attending

dance parties and celebrations, Regino refused to pay for the tickets.
On March 14 and March 15, 2002, the scheduled dates of the final
examinations in logic and statistics, her teachers -- Respondents
Rachelle A. Gamurot and Elissa Baladad -- allegedly disallowed her
from taking the tests. According to petitioner, Gamurot made her sit
out her logic class while her classmates were taking their
examinations. The next day, Baladad, after announcing to the entire
class that she was not permitting petitioner and another student to
take their statistics examinations for failing to pay for their tickets,
allegedly ejected them from the classroom. Petitioner's pleas
ostensibly went unheeded by Gamurot and Baladad, who
unrelentingly defended their positions as compliance with PCST's
policy.
On April 25, 2002, petitioner filed, as a pauper litigant, a Complaint5
for damages against PCST, Gamurot and Baladad. In her Complaint,
she prayed for P500,000 as nominal damages; P500,000 as moral
damages; at least P1,000,000 as exemplary damages; P250,000 as
actual damages; plus the costs of litigation and attorney's fees.
On May 30, 2002, respondents filed a Motion to Dismiss6 on the
ground of petitioner's failure to exhaust administrative remedies.
According to respondents, the question raised involved the
determination of the wisdom of an administrative policy of the PCST;
hence, the case should have been initiated before the proper
administrative body, the Commission of Higher Education (CHED).
In her Comment to respondents' Motion, petitioner argued that prior
exhaustion of administrative remedies was unnecessary, because her
action was not administrative in nature, but one purely for damages
arising from respondents' breach of the laws on human relations. As
such, jurisdiction lay with the courts.
On July 12, 2002, the RTC dismissed the Complaint for lack of cause of
action.
Ruling of the Regional Trial Court

In granting respondents' Motion to Dismiss, the trial court noted that

the instant controversy involved a higher institution of learning, two
of its faculty members and one of its students. It added that Section
54 of the Education Act of 1982 vested in the Commission on Higher
Education (CHED) the supervision and regulation of tertiary schools.
Thus, it ruled that the CHED, not the courts, had jurisdiction over the
controversy.7
In its dispositive portion, the assailed Order dismissed the Complaint
for "lack of cause of action" without, however, explaining this ground.
Aggrieved, petitioner filed the present Petition on pure questions of
law.8
Issues
In her Memorandum, petitioner raises the following issues for our
consideration:
"Whether or not the principle of exhaustion of administrative
remedies applies in a civil action exclusively for damages based on
violation of the human relation provisions of the Civil Code, filed by a
student against her former school.
"Whether or not there is a need for prior declaration of invalidity of a
certain school administrative policy by the Commission on Higher
Education (CHED) before a former student can successfully maintain
an action exclusively for damages in regular courts.
"Whether or not the Commission on Higher Education (CHED) has
exclusive original jurisdiction over actions for damages based upon
violation of the Civil Code provisions on human relations filed by a
student against the school."9
All of the foregoing point to one issue -- whether the doctrine of
exhaustion of administrative remedies is applicable. The Court,
however, sees a second issue which, though not expressly raised by
petitioner, was impliedly contained in her Petition: whether the
Complaint stated sufficient cause(s) of action.

The Court's Ruling

The Petition is meritorious.
First Issue:
Exhaustion of Administrative Remedies
Respondents anchored their Motion to Dismiss on petitioner's alleged
failure to exhaust administrative remedies before resorting to the
RTC. According to them, the determination of the controversy hinge
on the validity, the wisdom and the propriety of PCST's academic
policy. Thus, the Complaint should have been lodged in the CHED, the
administrative body tasked under Republic Act No. 7722 to
implement the state policy to "protect, foster and promote the right
of all citizens to affordable quality education at all levels and to take
appropriate steps to ensure that education is accessible to all."10
Petitioner counters that the doctrine finds no relevance to the
present case since she is praying for damages, a remedy beyond the
domain of the CHED and well within the jurisdiction of the courts.11
Petitioner is correct. First, the doctrine of exhaustion of
administrative remedies has no bearing on the present case. In
Factoran Jr. v. CA,12 the Court had occasion to elucidate on the
rationale behind this doctrine:
"The doctrine of exhaustion of administrative remedies is basic.
Courts, for reasons of law, comity, and convenience, should not
entertain suits unless the available administrative remedies have first
been resorted to and the proper authorities have been given the
appropriate opportunity to act and correct their alleged errors, if any,
committed in the administrative forum. x x x.13"
Petitioner is not asking for the reversal of the policies of PCST. Neither
is she demanding it to allow her to take her final examinations; she
was already enrolled in another educational institution. A reversal of
the acts complained of would not adequately redress her grievances;
under the circumstances, the consequences of respondents' acts
could no longer be undone or rectified.

Second, exhaustion of administrative remedies is applicable when

there is competence on the part of the administrative body to act
upon the matter complained of.14 Administrative agencies are not
courts; they are neither part of the judicial system, nor are they
deemed judicial tribunals.15 Specifically, the CHED does not have the
power to award damages.16 Hence, petitioner could not have
commenced her case before the Commission.
Third, the exhaustion doctrine admits of exceptions, one of which
arises when the issue is purely legal and well within the jurisdiction of
the trial court.17 Petitioner's action for damages inevitably calls for
the application and the interpretation of the Civil Code, a function
that falls within the jurisdiction of the courts.18
Second Issue:
Cause of Action
Sufficient Causes of Action Stated in the Allegations in the Complaint
As a rule, every complaint must sufficiently allege a cause of action;
failure to do so warrants its dismissal.19 A complaint is said to assert
a sufficient cause of action if, admitting what appears solely on its
face to be correct, the plaintiff would be entitled to the relief prayed
for. Assuming the facts that are alleged to be true, the court should
be able to render a valid judgment in accordance with the prayer in
the complaint.20
A motion to dismiss based on lack of cause of action hypothetically
admits the truth of the alleged facts. In their Motion to Dismiss,
respondents did not dispute any of petitioner's allegations, and they
admitted that "x x x the crux of plaintiff's cause of action is the
determination of whether or not the assessment of P100 per ticket is
excessive or oppressive."21 They thereby premised their prayer for
dismissal on the Complaint's alleged failure to state a cause of action.
Thus, a reexamination of the Complaint is in order.
The Complaint contains the following factual allegations:

"10. In the second week of February 2002, defendant Rachelle A.

Gamurot, in connivance with PCST, forced plaintiff and her classmates
to buy or take two tickets each, x x x;
"11. Plaintiff and many of her classmates objected to the forced
distribution and selling of tickets to them but the said defendant
warned them that if they refused [to] take or pay the price of the two
tickets they would not be allowed at all to take the final
examinations;
"12. As if to add insult to injury, defendant Rachelle A. Gamurot
bribed students with additional fifty points or so in their test score in
her subject just to unjustly influence and compel them into taking the
tickets;
"13. Despite the students' refusal, they were forced to take the
tickets because [of] defendant Rachelle A. Gamurot's coercion and act
of intimidation, but still many of them including the plaintiff did not
attend the dance party imposed upon them by defendants PCST and
Rachelle A. Gamurot;
"14. Plaintiff was not able to pay the price of her own two tickets
because aside form the fact that she could not afford to pay them it is
also against her religious practice as a member of a certain religious
congregation to be attending dance parties and celebrations;
"15. On March 14, 2002, before defendant Rachelle A. Gamurot gave
her class its final examination in the subject 'Logic' she warned that
students who had not paid the tickets would not be allowed to
participate in the examination, for which threat and intimidation
many students were eventually forced to make payments:
"16. Because plaintiff could not afford to pay, defendant Rachelle A.
Gamurot inhumanly made plaintiff sit out the class but the defendant
did not allow her to take her final examination in 'Logic;'
"17. On March 15, 2002 just before the giving of the final examination
in the subject 'Statistics,' defendant Elissa Baladad, in connivance with
defendants Rachelle A. Gamurot and PCST, announced in the
classroom that she was not allowing plaintiff and another student to

take the examination for their failure and refusal to pay the price of
the tickets, and thenceforth she ejected plaintiff and the other
student from the classroom;
"18. Plaintiff pleaded for a chance to take the examination but all
defendants could say was that the prohibition to give the
examinations to non-paying students was an administrative decision;
"19. Plaintiff has already paid her tuition fees and other obligations in
the school;
"20. That the above-cited incident was not a first since PCST also did
another forced distribution of tickets to its students in the first
semester of school year 2001-2002; x x x " 22
The foregoing allegations show two causes of action; first, breach of
contract; and second, liability for tort.
Reciprocity of the
School-Student Contract
In Alcuaz v. PSBA,23 the Court characterized the relationship between
the school and the student as a contract, in which "a student, once
admitted by the school is considered enrolled for one semester."24
Two years later, in Non v. Dames II,25 the Court modified the
"termination of contract theory" in Alcuaz by holding that the
contractual relationship between the school and the student is not
only semestral in duration, but for the entire period the latter are
expected to complete it."26 Except for the variance in the period
during which the contractual relationship is considered to subsist,
both Alcuaz and Non were unanimous in characterizing the schoolstudent relationship as contractual in nature.
The school-student relationship is also reciprocal. Thus, it has
consequences appurtenant to and inherent in all contracts of such
kind -- it gives rise to bilateral or reciprocal rights and obligations. The
school undertakes to provide students with education sufficient to
enable them to pursue higher education or a profession. On the other

hand, the students agree to abide by the academic requirements of

the school and to observe its rules and regulations.27
The terms of the school-student contract are defined at the moment
of its inception -- upon enrolment of the student. Standards of
academic performance and the code of behavior and discipline are
usually set forth in manuals distributed to new students at the start of
every school year. Further, schools inform prospective enrollees the
amount of fees and the terms of payment.
In practice, students are normally required to make a down payment
upon enrollment, with the balance to be paid before every
preliminary, midterm and final examination. Their failure to pay their
financial obligation is regarded as a valid ground for the school to
deny them the opportunity to take these examinations.
The foregoing practice does not merely ensure compliance with
financial obligations; it also underlines the importance of major
examinations. Failure to take a major examination is usually fatal to
the students' promotion to the next grade or to graduation.
Examination results form a significant basis for their final grades.
These tests are usually a primary and an indispensable requisite to
their elevation to the next educational level and, ultimately, to their
completion of a course.
Education is not a measurable commodity. It is not possible to
determine who is "better educated" than another. Nevertheless, a
student's grades are an accepted approximation of what would
otherwise be an intangible product of countless hours of study. The
importance of grades cannot be discounted in a setting where
education is generally the gate pass to employment opportunities and
better life; such grades are often the means by which a prospective
employer measures whether a job applicant has acquired the
necessary tools or skills for a particular profession or trade.
Thus, students expect that upon their payment of tuition fees,
satisfaction of the set academic standards, completion of academic
requirements and observance of school rules and regulations, the

school would reward them by recognizing their "completion" of the

course enrolled in.

all educational institutions."32 Sections 5 (1) and (3) of Article XIV of

the 1987 Constitution provide:

The obligation on the part of the school has been established in

Magtibay v. Garcia,28 Licup v. University of San Carlos29 and Ateneo
de Manila University v. Garcia,30 in which the Court held that, barring
any violation of the rules on the part of the students, an institution of
higher learning has a contractual obligation to afford its students a
fair opportunity to complete the course they seek to pursue.

"The State shall protect and promote the right of all citizens to quality
education at all levels and shall take appropriate steps to make such
declaration accessible to all.

We recognize the need of a school to fund its facilities and to meet

astronomical operating costs; this is a reality in running it. Crystal v.
Cebu International School31 upheld the imposition by respondent
school of a "land purchase deposit" in the amount of P50,000 per
student to be used for the "purchase of a piece of land and for the
construction of new buildings and other facilities x x x which the
school would transfer [to] and occupy after the expiration of its lease
contract over its present site."
The amount was refundable after the student graduated or left the
school. After noting that the imposition of the fee was made only
after prior consultation and approval by the parents of the students,
the Court held that the school committed no actionable wrong in
refusing to admit the children of the petitioners therein for their
failure to pay the "land purchase deposit" and the 2.5 percent
monthly surcharge thereon.
In the present case, PCST imposed the assailed revenue-raising
measure belatedly, in the middle of the semester. It exacted the
dance party fee as a condition for the students' taking the final
examinations, and ultimately for its recognition of their ability to
finish a course. The fee, however, was not part of the school-student
contract entered into at the start of the school year. Hence, it could
not be unilaterally imposed to the prejudice of the enrollees.
Such contract is by no means an ordinary one. In Non, we stressed
that the school-student contract "is imbued with public interest,
considering the high priority given by the Constitution to education
and the grant to the State of supervisory and regulatory powers over

"Every student has a right to select a profession or course of study,

subject to fair, reasonable and equitable admission and academic
requirements."
The same state policy resonates in Section 9(2) of BP 232, otherwise
known as the Education Act of 1982:
"Section 9. Rights of Students in School. In addition to other rights,
and subject to the limitations prescribed by law and regulations,
students and pupils in all schools shall enjoy the following rights:
xxx

xxx

xxx

(2) The right to freely choose their field of study subject to existing
curricula and to continue their course therein up to graduation,
except in cases of academic deficiency, or violation of disciplinary
regulations."
Liability for Tort
In her Complaint, petitioner also charged that private respondents
"inhumanly punish students x x x by reason only of their poverty,
religious practice or lowly station in life, which inculcated upon
[petitioner] the feelings of guilt, disgrace and unworthiness;"33 as a
result of such punishment, she was allegedly unable to finish any of
her subjects for the second semester of that school year and had to
lag behind in her studies by a full year. The acts of respondents
supposedly caused her extreme humiliation, mental agony and
"demoralization of unimaginable proportions" in violation of Articles
19, 21 and 26 of the Civil Code. These provisions of the law state thus:

"Article 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith."
"Article 21. Any person who wilfully causes loss or injury to another in
a manner that is contrary to morals, good customs or public policy
shall compensate the latter for the damage."
"Article 26. Every person shall respect the dignity, personality, privacy
and peace of mind of his neighbors and other persons. The following
and similar acts, though they may not constitute a criminal offense,
shall produce a cause of action for damages, prevention and other
relief:
(1) Prying into the privacy of another's residence;
(2) Meddling with or disturbing the private life or family relations of
another;
(3) Intriguing to cause another to be alienated from his friends;
(4) Vexing or humiliating another on account of his beliefs, lowly
station in life, place of birth, physical defect, or other personal
condition."
Generally, liability for tort arises only between parties not otherwise
bound by a contract. An academic institution, however, may be held
liable for tort even if it has an existing contract with its students, since
the act that violated the contract may also be a tort. We ruled thus in
PSBA vs. CA,34 from which we quote:
"x x x A perusal of Article 2176 [of the Civil Code] shows that
obligations arising from quasi-delicts or tort, also known as extracontractual obligations, arise only between parties not otherwise
bound by contract, whether express or implied. However, this
impression has not prevented this Court from determining the
existence of a tort even when there obtains a contract. In Air France
v. Carrascoso (124 Phil. 722), the private respondent was awarded
damages for his unwarranted expulsion from a first-class seat aboard
the petitioner airline. It is noted, however, that the Court referred to

the petitioner-airline's liability as one arising from tort, not one

arising form a contract of carriage. In effect, Air France is authority for
the view that liability from tort may exist even if there is a contract,
for the act that breaks the contract may be also a tort. x x x This view
was not all that revolutionary, for even as early as 1918, this Court
was already of a similar mind. In Cangco v. Manila Railroad (38 Phil.
780), Mr. Justice Fisher elucidated thus: 'x x x. When such a
contractual relation exists the obligor may break the contract under
such conditions that the same act which constitutes a breach of the
contract would have constituted the source of an extra-contractual
obligation had no contract existed between the parties.'
"Immediately what comes to mind is the chapter of the Civil Code on
Human Relations, particularly Article 21 x x x."35
Academic Freedom
In their Memorandum, respondents harp on their right to "academic
freedom." We are not impressed. According to present jurisprudence,
academic freedom encompasses the independence of an academic
institution to determine for itself (1) who may teach, (2) what may be
taught, (3) how it shall teach, and (4) who may be admitted to
study.36 In Garcia v. the Faculty Admission Committee, Loyola School
of Theology,37 the Court upheld the respondent therein when it
denied a female student's admission to theological studies in a
seminary for prospective priests. The Court defined the freedom of an
academic institution thus: "to decide for itself aims and objectives
and how best to attain them x x x free from outside coercion or
interference save possibly when overriding public welfare calls for
some restraint."38
In Tangonan v. Pao,39 the Court upheld, in the name of academic
freedom, the right of the school to refuse readmission of a nursing
student who had been enrolled on probation, and who had failed her
nursing subjects. These instances notwithstanding, the Court has
emphasized that once a school has, in the name of academic
freedom, set its standards, these should be meticulously observed
and should not be used to discriminate against certain students.40

After accepting them upon enrollment, the school cannot renege on

its contractual obligation on grounds other than those made known
to, and accepted by, students at the start of the school year.
In sum, the Court holds that the Complaint alleges sufficient causes of
action against respondents, and that it should not have been
summarily dismissed. Needless to say, the Court is not holding
respondents liable for the acts complained of. That will have to be
ruled upon in due course by the court a quo.
WHEREFORE, the Petition is hereby GRANTED, and the assailed
Orders REVERSED. The trial court is DIRECTED to reinstate the
Complaint and, with all deliberate speed, to continue the proceedings
in Civil Case No. U-7541. No costs.
SO ORDERED.
Guanio vs Makati Shangri la
For their wedding reception on July 28, 2001, spouses Luigi M. Guanio
and Anna Hernandez-Guanio (petitioners) booked at the Shangri-la
Hotel Makati (the hotel).

Prior to the event, Makati Shangri-La Hotel & Resort, Inc.

(respondent) scheduled an initial food tasting. Petitioners claim that
they requested the hotel to prepare for seven persons the two of
them, their respective parents, and the wedding coordinator. At the
scheduled food tasting, however, respondent prepared for only six.

Petitioners initially chose a set menu which included black cod,

king prawns and angel hair pasta with wild mushroom sauce for the
main course which cost P1,000.00 per person. They were, however,
given an option in which salmon, instead of king prawns, would be in
the menu at P950.00 per person. They in fact partook of the salmon.

Three days before the event, a final food tasting took place.
Petitioners aver that the salmon served was half the size of what they
were served during the initial food tasting; and when queried about
it, the hotel quoted a much higher price (P1,200.00) for the size that
was initially served to them. The parties eventually agreed on a final
price P1,150 per person.

A day before the event or on July 27, 2001, the parties finalized
and forged their contract.[1]

Petitioners claim that during the reception, respondents

representatives, Catering Director Bea Marquez and Sales Manager
Tessa Alvarez, did not show up despite their assurance that they
would; their guests complained of the delay in the service of the
dinner; certain items listed in the published menu were unavailable;
the hotels waiters were rude and unapologetic when confronted
about the delay; and despite Alvarezs promise that there would be
no charge for the extension of the reception beyond 12:00 midnight,
they were billed and paid P8,000 per hour for the three-hour
extension of the event up to 4:00 A.M. the next day.

Petitioners further claim that they brought wine and liquor in

accordance with their open bar arrangement, but these were not
served to the guests who were forced to pay for their drinks.

Petitioners thus sent a letter-complaint to the Makati Shangri-la

Hotel and Resort, Inc. (respondent) and received an apologetic reply
from Krister Svensson, the hotels Executive Assistant Manager in
charge of Food and Beverage. They nevertheless filed a complaint for
breach of contract and damages before the Regional Trial Court (RTC)
of Makati City.

SO ORDERED.[3]
In its Answer, respondent claimed that petitioners requested a
combination of king prawns and salmon, hence, the price was
increased to P1,200.00 per person, but discounted at P1,150.00; that
contrary to petitioners claim, Marquez and Alvarez were present
during the event, albeit they were not permanently stationed thereat
as there were three other hotel functions; that while there was a
delay in the service of the meals, the same was occasioned by the
sudden increase of guests to 470 from the guaranteed expected
minimum number of guests of 350 to a maximum of 380, as stated in
the Banquet Event Order (BEO);[2] and that Isaac Albacea, Banquet
Service Director, in fact relayed the delay in the service of the meals
to petitioner Luigis father, Gil Guanio.

In finding for petitioners, the trial court relied heavily on the

letter of Svensson which is partly quoted below:

Respecting the belated service of meals to some guests,

respondent attributed it to the insistence of petitioners wedding
coordinator that certain guests be served first.

Indeed, we feel as strongly as you do that the services you received

were unacceptable and definitely not up to our standards. We
understand that it is our job to provide excellent service and in this
instance, we have fallen short of your expectations. We ask you
please to accept our profound apologies for causing such discomfort
and annoyance. [4] (underscoring supplied)

On Svenssons letter, respondent, denying it as an admission of

liability, claimed that it was meant to maintain goodwill to its
customers.

Upon receiving your comments on our service rendered during your

reception here with us, we are in fact, very distressed. Right from
minor issues pappadums served in the soup instead of the creutons,
lack of valet parkers, hard rolls being too hard till a major one slow
service, rude and arrogant waiters, we have disappointed you in all
means.

By Decision of August 17, 2006, Branch 148 of the Makati RTC

rendered judgment in favor of petitioners, disposing as follows:
WHEREFORE, premises considered, judgment is hereby
rendered in favor of the plaintiffs and against the defendant ordering
the defendants to pay the plaintiff the following:

1)

The amount of P350,000.00 by way of actual damages;

2)

The amount of P250,000.00 for and as moral damages;

3)

The amount of P100,000.00 as exemplary damages;

4)

The amount of P100,000.00 for and as attorneys fees.

With costs against the defendant.

The trial court observed that from the tenor of the letter . . .
the defendant[-herein respondent] admits that the services the
plaintiff[-herein petitioners] received were unacceptable and
definitely not up to their standards.*5+

On appeal, the Court of Appeals, by Decision of July 27, 2009,[6]

reversed the trial courts decision, it holding that the proximate cause
of petitioners injury was an unexpected increase in their guests:

x x x Hence, the alleged damage or injury brought about by the

confusion, inconvenience and disarray during the wedding reception
may not be attributed to defendant-appellant Shangri-la.

We find that the said proximate cause, which is entirely

attributable to plaintiffs-appellants, set the chain of events which
resulted in the alleged inconveniences, to the plaintiffs-appellants.
Given the circumstances that obtained, only the Sps. Guanio may
bear whatever consequential damages that they may have allegedly
suffered.[7] (underscoring supplied)
Petitioners motion for reconsideration having been denied by
Resolution of November 18, 2009, the present petition for review was
filed.
The Court finds that since petitioners complaint arose from a
contract, the doctrine of proximate cause finds no application to it:
The doctrine of proximate cause is applicable only in actions for
quasi-delicts, not in actions involving breach of contract. x x x The
doctrine is a device for imputing liability to a person where there is no
relation between him and another party. In such a case, the
obligation is created by law itself. But, where there is a pre-existing
contractual relation between the parties, it is the parties themselves
who create the obligation, and the function of the law is merely to
regulate the relation thus created.[8] (emphasis and underscoring
supplied)

In culpa contractual x x x the mere proof of the existence of the

contract and the failure of its compliance justify, prima facie, a
corresponding right of relief. The law, recognizing the obligatory
force of contracts, will not permit a party to be set free from liability
for any kind of misperformance of the contractual undertaking or a
contravention of the tenor thereof. A breach upon the contract
confers upon the injured party a valid cause for recovering that which
may have been lost or suffered. The remedy serves to preserve the
interests of the promissee that may include his expectation
interest, which is his interest in having the benefit of his bargain by
being put in as good a position as he would have been in had the
contract been performed, or his reliance interest, which is his
interest in being reimbursed for loss caused by reliance on the
contract by being put in as good a position as he would have been in
had the contract not been made; or his restitution interest, which is
his interest in having restored to him any benefit that he has
conferred on the other party. Indeed, agreements can accomplish
little, either for their makers or for society, unless they are made the
basis for action. The effect of every infraction is to create a new duty,
that is, to make RECOMPENSE to the one who has been injured by the
failure of another to observe his contractual obligation unless he can
show extenuating circumstances, like proof of his exercise of due
diligence x x x or of the attendance of fortuitous event, to excuse him
from his ensuing liability. (emphasis and underscoring in the original;
capitalization supplied.

What applies in the present case is Article 1170 of the Civil Code
which reads:

The pertinent provisions of the Banquet and Meeting Services

Contract between the parties read:

Art. 1170. Those who in the performance of their obligations are

guilty of fraud, negligence or delay, and those who in any manner
contravene the tenor thereof, are liable for damages.

4.3 The ENGAGER shall be billed in accordance with the prescribed

rate for the minimum guaranteed number of persons contracted for,
regardless of under attendance or non-appearance of the expected
number of guests, except where the ENGAGER cancels the Function in
accordance with its Letter of Confirmation with the HOTEL. Should
the attendance exceed the minimum guaranteed attendance, the

RCPI v. Verchez, et al. [9] enlightens:

ENGAGER shall also be billed at the actual rate per cover in excess of
the minimum guaranteed attendance.

As for petitioners claim that respondent departed from its verbal

agreement with petitioners, the same fails, given that the written
contract which the parties entered into the day before the event,
being the law between them.

xxxx

4.5. The ENGAGER must inform the HOTEL at least forty eight (48)
hours before the scheduled date and time of the Function of any
change in the minimum guaranteed covers. In the absence of such
notice, paragraph 4.3 shall apply in the event of under attendance. In
case the actual number of attendees exceed the minimum
guaranteed number
by ten percent (10%), the HOTEL shall not in any way be held liable
for any damage or inconvenience which may be caused thereby. The
ENGAGER shall also undertake to advise the guests of the situation
and take positive steps to remedy the same.[10] (emphasis, italics
and underscoring supplied)

Breach of contract is defined as the failure without legal reason to

comply with the terms of a contract. It is also defined as the [f]ailure,
without legal excuse, to perform any promise which forms the whole
or part of the contract.[11]

The appellate court, and even the trial court, observed that
petitioners were remiss in their obligation to inform respondent of
the change in the expected number of guests. The observation is
reflected in the records of the case. Petitioners failure to discharge
such obligation thus excused, as the above-quoted paragraph 4.5 of
the parties contract provide, respondent from liability for any
damage or inconvenience occasioned thereby.

Respecting the letter of Svensson on which the trial court heavily

relied as admission of respondents liability but which the appellate
court brushed aside, the Court finds the appellate courts stance in
order.
It is not uncommon in the hotel industry to receive
comments, criticisms or feedback on the service it delivers. It is also
customary for hotel management to try to smooth ruffled feathers to
preserve goodwill among its clientele.

Kalalo v. Luz holds:[12]

Statements which are not estoppels nor judicial admissions

have no quality of conclusiveness, and an opponent whose
admissions have been offered against him may offer any evidence
which serves as an explanation for his former assertion of what he
now denies as a fact.

Respondents Catering Director, Bea Marquez, explained the hotels

procedure on receiving and processing complaints, viz:

ATTY. CALMA:
Q
You mentioned that the letter indicates an acknowledgement
of the concern and that there was-the first letter there was an
acknowledgment of the concern and an apology, not necessarily
indicating that such or admitting fault?

Yes.

Is this the letter that you are referring to?

If I may, Your Honor, that was the letter dated August 4, 2001,
previously marked as plaintiffs exhibits, Your Honor. What is the
procedure of the hotel with respect to customer concern?
A
Upon receipt of the concern from the guest or client, we
acknowledge receipt of such concern, and as part of procedure in
service industry particularly Makati Shangri-la we apologize for
whatever inconvenience but at the same time saying, that of course,
we would go through certain investigation and get back to them for
the feedback with whatever concern they may have.
Q
Your Honor, I just like at this point mark the exhibits, Your
Honor, the letter dated August 4, 2001 identified by the witness, Your
Honor, to be marked as Exhibit 14 and the signature of Mr. Krister
Svensson be marked as Exhibit 14-A.[13]
xxxx
Q
In your opinion, you just mentioned that there is a procedure
that the hotel follows with respect to the complaint, in your opinion
was this procedure followed in this particular concern?
A

Yes, maam.

What makes you say that this procedure was followed?

A
As I mentioned earlier, we proved that we did acknowledge the
concern of the client in this case and we did emphatize from the
client and apologized, and at the same time got back to them in
whatever investigation we have.
Q

You said that you apologized, what did you apologize for?

A
Well, first of all it is a standard that we apologize, right? Being
in the service industry, it is a practice that we apologize if there is any
inconvenience, so the purpose for apologizing is mainly to show
empathy and to ensure the client that we are hearing them out and

that we will do a better investigation and it is not in any way that we

are admitting any fault.[14] (underscoring supplied)

To the Court, the foregoing explanation of the hotels Banquet

Director overcomes any presumption of admission of breach which
Svenssons letter might have conveyed.

The exculpatory clause notwithstanding, the Court notes that

respondent could have managed the situation better, it being held
in high esteem in the hotel and service industry. Given respondents
vast experience, it is safe to presume that this is not its first
encounter with booked events exceeding the guaranteed cover. It is
not audacious to expect that certain measures have been placed in
case this predicament crops up. That regardless of these measures,
respondent still received complaints as in the present case, does not
amuse.

Respondent admitted that three hotel functions coincided with

petitioners reception. To the Court, the delay in service might have
been avoided or minimized if respondent exercised prescience in
scheduling events. No less than quality service should be delivered
especially in events which possibility of repetition is close to nil.
Petitioners are not expected to get married twice in their lifetimes.

In the present petition, under considerations of equity, the Court

deems it just to award the amount of P50,000.00 by way of nominal
damages to petitioners, for the discomfiture that they were subjected
to during to the event.[15] The Court recognizes that every person is
entitled to respect of his dignity, personality, privacy and peace of
mind.*16+ Respondents lack of prudence is an affront to this right.

WHEREFORE, the Court of Appeals Decision dated July 27, 2009 is

PARTIALLY REVERSED. Respondent is, in light of the foregoing
discussion, ORDERED to pay the amount of P50,000.00 to petitioners
by way of nominal damages.
ROY PADILLA, FILOMENO GALDONES, ISMAEL GONZALGO and JOSE
FARLEY BEDENIA, petitioners,
vs. COURT OF APPEALS, respondent.
This is a petition for review on certiorari of a Court of Appeals'
decision which reversed the trial court's judgment of conviction and
acquitted the petitioners of the crime of grave coercion on the
ground of reasonable doubt but inspite of the acquittal ordered them
to pay jointly and severally the amount of P9,000.00 to the
complainants as actual damages.

The petitioners were charged under the following information:

The undersigned Fiscal accused ROY PADILLA, FILOMENO GALDONES,

PEPITO BEDENIA, YOLLY RICO, DAVID BERMUNDO, VILLANOAC,
ROBERTO ROSALES, VILLANIA, ROMEO GARRIDO, JOSE ORTEGA, JR.,
RICARDO CELESTINO, REALINGO alias "KAMLON", JOHN DOE alias
TATO, and FOURTEEN (14) RICARDO DOES of the crime of GRAVE
COERCION, committed as follows:

That on or about February 8, 1964 at around 9:00 o'clock in the

morning, in the municipality of Jose Panganiban, province of
Camarines Norte, Philippines, and within the jurisdiction of this
Honorable Court, the above- named accused, Roy Padilla, Filomeno
Galdones, Pepito Bedenia, Yolly Rico, David Bermundo, Villanoac,
Roberto Rosales, Villania, Romeo Garrido, Jose Ortega, Jr., Ricardo
Celestino, Realingo alias Kamlon, John Doe alias Tato, and Fourteen
Richard Does, by confederating and mutually helping one another,

and acting without any authority of law, did then and there wilfully,
unlawfully, and feloniously, by means of threats, force and violence
prevent Antonio Vergara and his family to close their stall located at
the Public Market, Building No. 3, Jose Panganiban, Camarines Norte,
and by subsequently forcibly opening the door of said stall and
thereafter brutally demolishing and destroying said stall and the
furnitures therein by axes and other massive instruments, and
carrying away the goods, wares and merchandise, to the damage and
prejudice of the said Antonio Vergara and his family in the amount of
P30,000.00 in concept of actual or compensatory and moral damages,
and further the sum of P20,000.00 as exemplary damages.

That in committing the offense, the accused took advantage of their

public positions: Roy Padilla, being the incumbent municipal mayor,
and the rest of the accused being policemen, except Ricardo Celestino
who is a civilian, all of Jose Panganiban, Camarines Norte, and that it
was committed with evident premeditation.

The Court of First Instance of Camarines Norte, Tenth Judicial District

rendered a decision, the dispositive portion of which states that:

IN VIEW OF THE FOREGOING, the Court finds the accused Roy Padilla,
Filomeno Galdonez, Ismael Gonzalgo and Jose Parley Bedenia guilty
beyond reasonable doubt of the crime of grave coercion, and hereby
imposes upon them to suffer an imprisonment of FIVE (5) months and
One (1) day; to pay a fine of P500.00 each; to pay actual and
compensatory damages in the amount of P10,000.00; moral damages
in the amount of P30,000.00; and another P10,000.00 for exemplary
damages, jointly and severally, and all the accessory penalties
provided for by law; and to pay the proportionate costs of this
proceedings.

The accused Federico Realingo alias 'Kamlon', David Bermundo,

Christopher Villanoac, Godofredo Villania, Romeo Garrido, Roberto
Rosales, Ricardo Celestino and Jose Ortega, are hereby ordered
acquitted on grounds of reasonable doubt for their criminal
participation in the crime charged.

the extinction of their civil liability. The Court of Appeals denied the
motion holding that:

The petitioners appealed the judgment of conviction to the Court of

Appeals. They contended that the trial court's finding of grave
coercion was not supported by the evidence. According to the
petitioners, the town mayor had the power to order the clearance of
market premises and the removal of the complainants' stall because
the municipality had enacted municipal ordinances pursuant to which
the market stall was a nuisance per se. The petitioners stated that the
lower court erred in finding that the demolition of the complainants'
stall was a violation of the very directive of the petitioner Mayor
which gave the stall owners seventy two (72) hours to vacate the
market premises. The petitioners questioned the imposition of prison
terms of five months and one day and of accessory penalties provided
by law. They also challenged the order to pay fines of P500.00 each,
P10,000.00 actual and compensatory damages, P30,000.00 moral
damages, P10,000.00 exemplary damages, and the costs of the suit.

... appellants' acquittal was based on reasonable doubt whether the

crime of coercion was committed, not on facts that no unlawful act
was committed; as their taking the law into their hands, destructing
(sic) complainants' properties is unlawful, and, as evidence on record
established that complainants suffered actual damages, the
imposition of actual damages is correct.

xxx

xxx

xxx

Consequently, the petitioners filed this special civil action, contending

that:

The dispositive portion of the decision of the respondent Court of

Appeals states:

THE COURT OF APPEALS COMMITTED A GRAVE ERROR OF LAW OR

GRAVELY ABUSED ITS DISCRETION IN IMPOSING UPON PETITIONERS
PAYMENT OF DAMAGES TO COMPLAINANTS AFTER ACQUITTING
PETITIONERS OF THE CRIME CHARGED FROM WHICH SAID LIABILITY
AROSE.

WHEREFORE, we hereby modify the judgment appealed from in the

sense that the appellants are acquitted on ground of reasonable
doubt. but they are ordered to pay jointly and severally to
complainants the amount of P9,600.00, as actual damages.

II

The petitioners filed a motion for reconsideration contending that the

acquittal of the defendants-appellants as to criminal liability results in

THE COURT OF APPEALS ERRED IN HOLDING IN ITS RESOLUTION

DATED DECEMBER 26, 1974 THAT SINCE APPELLANTS' ACQUITTAL
WAS BASED ON REASONABLE DOUBT, NOT ON FACTS THAT NO

UNLAWFUL ACT WAS COMMITTED, THE IMPOSITION OF ACTUAL

DAMAGES IS CORRECT.

III

THE COURT OF APPEALS COMMITTED A LEGAL INCONSISTENCY, IF

NOT PLAIN JUDICIAL ERROR, IN HOLDING IN ITS APPEALED
RESOLUTION THAT PETITIONERS COMMITTED AN UNLAWFUL ACT,
THAT IS TAKING THE LAW INTO THEIR HANDS, DESTRUCTING (sic)
'COMPLAINANTS' PROPERTIES', AFTER HOLDING IN ITS MAIN
DECISION OF NOVEMBER 6,1974 THAT THE ACTS FOR WHICH THEY
WERE CHARGED DID NOT CONSTITUTE GRAVE COERCION AND THEY
WERE NOT CHARGED OF ANY OTHER CRIME.

IV

THE COURT OF APPEALS ERRED IN ORDERING THE PETITIONERS

HEREIN, APPELLANTS IN CA-G.R. NO. 13456CR, JOINTLY AND
SEVERALLY, TO PAY COMPLAINANTS P9,600.00 IN SUPPOSED ACTUAL
DAMAGES.

The issue posed in the instant proceeding is whether or not the

respondent court committed a reversible error in requiring the
petitioners to pay civil indemnity to the complainants after acquitting
them from the criminal charge.

Petitioners maintain the view that where the civil liability which is
included in the criminal action is that arising from and as a
consequence of the criminal act, and the defendant was acquitted in
the criminal case, (no civil liability arising from the criminal case), no

civil liability arising from the criminal charge could be imposed upon
him. They cite precedents to the effect that the liability of the
defendant for the return of the amount received by him may not be
enforced in the criminal case but must be raised in a separate civil
action for the recovery of the said amount (People v. Pantig, 97 Phil.
748; following the doctrine laid down in Manila Railroad Co. v.
Honorable Rodolfo Baltazar, 49 O.G. 3874; Pueblo contra Abellera, 69
Phil. 623; People v. Maniago 69 Phil. 496; People v. Miranda, 5 SCRA
1067; Aldaba v. Elepafio 116 Phil. 457). In the case before us, the
petitioners were acquitted not because they did not commit the acts
stated in the charge against them. There is no dispute over the
forcible opening of the market stall, its demolition with axes and
other instruments, and the carting away of the merchandize. The
petitioners were acquitted because these acts were denominated
coercion when they properly constituted some other offense such as
threat or malicious mischief.

The respondent Court of Appeals stated in its decision:

For a complaint to prosper under the foregoing provision, the

violence must be employed against the person, not against property
as what happened in the case at bar. ...

xxx

xxx

xxx

The next problem is: May the accused be convicted of an offense

other than coercion?

From all appearances, they should have been prosecuted either for
threats or malicious mischief. But the law does not allow us to render
judgment of conviction for either of these offenses for the reason

that they were not indicted for, these offenses. The information
under which they were prosecuted does not allege the elements of
either threats or malicious mischief. Although the information
mentions that the act was by means of threats', it does not allege the
particular threat made. An accused person is entitled to be informed
of the nature of the acts imputed to him before he can be made to
enter into trial upon a valid information.

We rule that the crime of grave coercion has not been proved in
accordance with law.

While appellants are entitled to acquittal they nevertheless are liable

for the actual damages suffered by the complainants by reason of the
demolition of the stall and loss of some of their properties. The
extinction of the penal action does not carry with it that of the civil,
unless the extinction proceeds from a declaration in a final judgment
that the fact from which the civil might arise did not exist. (Rule 111,
Sec. 3 (c), Rev. Rules of Court; Laperal v. Aliza, 51 OG.R. 1311, People
v. Velez, 44 OG. 1811). In the instant case, the fact from which the
civil might arise, namely, the demolition of the stall and loss of the
properties contained therein; exists, and this is not denied by the
accused. And since there is no showing that the complainants have
reserved or waived their right to institute a separate civil action, the
civil aspect therein is deemed instituted with the criminal action.
(Rule 111, Sec. 1, Rev. Rules of Court).

xxx

xxx

offended party expressly waives the civil action or reserves his right
to institute it separately. (Morte Sr. v. Alvizo, Jr., 101 SCRA 221).

The extinction of the civil action by reason of acquittal in the criminal

case refers exclusively to civil liability ex delicto founded on Article
100 of the Revised Penal Code. (Elcano v. Hill, 77 SCRA 98; Virata v.
Ochoa, 81 SCRA 472). In other words, the civil liability which is also
extinguished upon acquittal of the accused is the civil liability arising
from the act as a crime.

As easily as 1942, the Supreme Court speaking through Justice Jorge

Bocobo in Barredo v. Garcia, et at. 73 Phil. 607 laid down the rule that
the same punishable act or omission can create two kinds of civil
liabilities against the accused and, where provided by law, his
employer. 'There is the civil liability arising from the act as a crime
and the liability arising from the same act as a quasi-delict. Either one
of these two types of civil liability may be enforced against the
accused, However, the offended party cannot recover damages under
both types of liability. For instance, in cases of criminal negligence or
crimes due to reckless imprudence, Article 2177 of the Civil Code
provides:

Responsibility for fault or negligence under the preceding article is

entirely separate and distinct from the civil liability arising from
negligence under the Penal Code. But the plaintiff cannot recover
damages twice for the same act or omission of the defendant.

xxx
Section 3 (c) of Rule 111 specifically provides that:

Section 1 of Rule 111 of the Rules of Court states the fundamental

proposition that when a criminal action is instituted, the civil action
for recovery of civil liability arising from the offense charged is
impliedly instituted with it. There is no implied institution when the

Sec. 3. Other civil actions arising from offenses. In all cases not
included in the preceding section the following rules shall be
observed:

xxx

xxx

xxx

xxx

xxx

xxx

(c)
Extinction of the penal action does not carry with it extinction
of the civil, unless the extinction proceeds from a declaration in a final
judgment that the fact from which the civil might arise did not exist.
In other cases, the person entitled to the civil action may institute it in
the Jurisdiction and in the manner provided by law against the person
who may be liable for restitution of the thing and reparation or
indemnity for the damage suffered.

The judgment of acquittal extinguishes the liability of the accused for

damages only when it includes a declaration that the facts from which
the civil might arise did not exist. Thus, the civil liability is not
extinguished by acquittal where the acquittal is based on reasonable
doubt (PNB v. Catipon, 98 Phil. 286) as only preponderance of
evidence is required in civil cases; where the court expressly declares
that the liability of the accused is not criminal but only civil in nature
(De Guzman v. Alvia, 96 Phil. 558; People v. Pantig, supra) as, for
instance, in the felonies of estafa, theft, and malicious mischief
committed by certain relatives who thereby incur only civil liability
(See Art. 332, Revised Penal Code); and, where the civil liability does
not arise from or is not based upon the criminal act of which the
accused was acquitted (Castro v. Collector of Internal Revenue, 4
SCRA 1093; See Regalado, Remedial Law Compendium, 1983 ed., p.
623). Article 29 of the Civil Code also provides that:

When the accused in a criminal prosecution is acquitted on the

ground that his guilt has not been proved beyond reasonable doubt, a
civil action for damages for the same act or omission may be
instituted. Such action requires only a preponderance of evidence.
Upon motion of the defendant, the court may require the plaintiff to
file a bond to answer for damages in case the complaint should be
found to be malicious.

If in a criminal case the judgment of acquittal is based upon

reasonable doubt, the court shall so declare. In the absence of any
declaration to that effect, it may be inferred from the text of the
decision whether or not the acquittal is due to that ground.

More recently, we held that the acquittal of the defendant in the

criminal case would not constitute an obstacle to the filing of a civil
case based on the same acts which led to the criminal prosecution:

... The finding by the respondent court that he spent said sum for and
in the interest of the Capiz Agricultural and Fishery School and for his
personal benefit is not a declaration that the fact upon which Civil
Case No. V-3339 is based does not exist. The civil action barred by
such a declaration is the civil liability arising from the offense charged,
which is the one impliedly instituted with the criminal action. (Section
1, Rule III, Rules of Court.) Such a declaration would not bar a civil
action filed against an accused who had been acquitted in the
criminal case if the criminal action is predicated on factual or legal
considerations other than the commission of the offense charged. A
person may be acquitted of malversation where, as in the case at bar,
he could show that he did not misappropriate the public funds in his
possession, but he could be rendered liable to restore said funds or at
least to make a proper accounting thereof if he shall spend the same
for purposes which are not authorized nor intended, and in a manner

not permitted by applicable rules and regulations. (Republic v. Bello,

120 SCRA 203)

There appear to be no sound reasons to require a separate civil action

to still be filed considering that the facts to be proved in the civil case
have already been established in the criminal proceedings where the
accused was acquitted. Due process has been accorded the accused.
He was, in fact, exonerated of the criminal charged. The
constitutional presumption of innocence called for more vigilant
efforts on the part of prosecuting attorneys and defense counsel, a
keener awareness by all witnesses of the serious implications of
perjury, and a more studied consideration by the judge of the entire
records and of applicable statutes and precedents. To require a
separate civil action simply because the accused was acquitted would
mean needless clogging of court dockets and unnecessary duplication
of litigation with all its attendant loss of time, effort, and money on
the part of all concerned.

Since then up to the trial of this case, the whereabouts of the goods
taken out from the store nor the materials of the demolished stall
have not been made known.

The respondent Court of Appeals made a similar finding that:

On the morning of February 8th, because the said Vergaras had not
up to that time complied with the order to vacate, the co-accused
Chief of Police Galdones and some members of his police force, went
to the market and, using ax, crowbars and hammers, demolished the
stall of the Vergaras who were not present or around, and after
having first inventoried the goods and merchandise found therein,
they had them brought to the municipal building for safekeeping.
Inspite of notice served upon the Vergaras to take possession of the
goods and merchandise thus taken away, the latter refused to do so.

The loss and damage to the Vergaras as they evaluated them were:
The trial court found the following facts clearly established by the
evidence adduced by both the prosecution and the defense:
Cost of stall construction
xxx

xxx

P1,300.00

xxx
Value of furniture and equipment

(9)
In the morning of February 8, 1964, then Chief Galdones,
complying with the instructions contained in said Memorandum No.
32 of the Mayor, and upon seeing that Antonio Vergara had not
vacated the premises in question, with the aid of his policemen,
forced upon the store or stall and ordered the removal of the goods
inside the store of Vergara, at the same time taking inventory of the
goods taken out, piled them outside in front of the store and had it
cordoned with a rope, and after all the goods were taken out from
the store, ordered the demolition of said stall of Antonio Vergara.

judgment destroyed 300.00

Value of goods and equipment taken8,000.00

P9,600.00

It is not disputed that the accused demolished the grocery stall of the
complainants Vergaras and carted away its contents. The defense
that they did so in order to abate what they considered a nuisance
per se is untenable, This finds no support in law and in fact. The
couple has been paying rentals for the premises to the government
which allowed them to lease the stall. It is, therefore, farfetched to
say that the stall was a nuisance per se which could be summarily
abated.

The petitioners, themselves, do not deny the fact that they caused
the destruction of the complainant's market stall and had its contents
carted away. They state:

On February 8, 1964, despite personal pleas on Vergaras by the

Mayor to vacate the passageways of Market Building No. 3, the
Vergaras were still in the premises, so the petitioners Chief of Police
and members of the Police Force of Jose Panganiban, pursuant to the
Mayor' 6 directives, demolished the store of the Vergaras, made an
inventory of the goods found in said store, and brought these goods
to the municipal building under the custody of the Municipal
Treasurer, ...

The only supposed obstacle is the provision of Article 29 of the Civil

Code, earlier cited, that "when the accused in a criminal prosecution
is acquitted on the ground that his guilt has not been proved beyond
reasonable doubt, a civil action for damages for the same act or
omission may be instituted." According to some scholars, this
provision of substantive law calls for a separate civil action and
cannot be modified by a rule of remedial law even in the interests of
economy and simplicity and following the dictates of logic and
common sense.

As stated by retired Judge J. Cezar Sangco:

... if the Court finds the evidence sufficient to sustain the civil action
but inadequate to justify a conviction in the criminal action, may it
render judgment acquitting the accused on reasonable doubt, but
hold him civilly liable nonetheless? An affirmative answer to this
question would be consistent with the doctrine that the two are
distinct and separate actions, and win (a) dispense with the
reinstituting of the same civil action, or one based on quasi-delict or
other independent civil action, and of presenting the same evidence:
(b) save the injured party unnecessary expenses in the prosecution of
the civil action or enable him to take advantage of the free services of
the fiscal; and (c) otherwise resolve the unsettling implications of
permitting the reinstitution of a separate civil action whether based
on delict, or quasi-delict, or other independent civil actions.

... But for the court to be able to adjudicate in the manner here
suggested, Art. 29 of the Civil Code should be amended because it
clearly and expressly provides that the civil action based on the same
act or omission may only be instituted in a separate action, and
therefore, may not inferentially be resolved in the same criminal
action. To dismiss the civil action upon acquittal of the accused and
disallow the reinstitution of any other civil action, would likewise
render, unjustifiably, the acquittal on reasonable doubt without any
significance, and would violate the doctrine that the two actions are
distinct and separate.

In the light of the foregoing exposition, it seems evident that there is

much sophistry and no pragmatism in the doctrine that it is
inconsistent to award in the same proceedings damages against the
accused after acquitting him on reasonable doubt. Such doctrine
must recognize the distinct and separate character of the two actions,
the nature of an acquittal on reasonable doubt, the vexatious and

oppressive effects of a reservation or institution of a separate civil

action, and that the injured party is entitled to damages not because
the act or omission is punishable but because he was damaged or
injured thereby (Sangco, Philippine Law on Torts and Damages, pp.
288-289).

We further note the rationale behind Art. 29 of the Civil Code in

arriving at the intent of the legislator that they could not possibly
have intended to make it more difficult for the aggrieved party to
recover just compensation by making a separate civil action
mandatory and exclusive:

We see no need to amend Article 29 of the Civil Code in order to

allow a court to grant damages despite a judgment of acquittal based
on reasonable doubt. What Article 29 clearly and expressly provides is
a remedy for the plaintiff in case the defendant has been acquitted in
a criminal prosecution on the ground that his guilt has not been
proved beyond reasonable doubt. It merely emphasizes that a civil
action for damages is not precluded by an acquittal for the same
criminal act or omission. The Civil Code provision does not state that
the remedy can be availed of only in a separate civil action. A
separate civil case may be filed but there is no statement that such
separate filing is the only and exclusive permissible mode of
recovering damages.

The old rule that the acquittal of the accused in a criminal case also
releases him from civil liability is one of the most serious flaws in the
Philippine legal system. It has given rise to numberless instances of
miscarriage of justice, where the acquittal was due to a reasonable
doubt in the mind of the court as to the guilt of the accused. The
reasoning followed is that inasmuch as the civil responsibility is
derived from the the criminal offense, when the latter is not proved,
civil liability cannot be demanded.

There is nothing contrary to the Civil Code provision in the rendition

of a judgment of acquittal and a judgment awarding damages in the
same criminal action. The two can stand side by side. A judgment of
acquittal operates to extinguish the criminal liability. It does not,
however, extinguish the civil liability unless there is clear showing
that the act from which civil liability might arise did not exist.

A different conclusion would be attributing to the Civil Code a trivial

requirement, a provision which imposes an uncalled for burden
before one who has already been the victim of a condemnable, yet
non-criminal, act may be accorded the justice which he seeks.

This is one of those cases where confused thinking leads to

unfortunate and deplorable consequences. Such reasoning fails to
draw a clear line of demarcation between criminal liability and civil
responsibility, and to determine the logical result of the distinction.
The two liabilities are separate and distinct from each other. One
affects the social order and the other, private rights. One is for the
punishment or correction of the offender while the other is for
reparation of damages suffered by the aggrieved party... it is just and
proper that, for the purposes of the imprisonment of or fine upon the
accused, the offense should be proved beyond reasonable doubt. But
for the purpose of indemnifying the complaining party, why should
the offense also be proved beyond reasonable doubt? Is not the
invasion or violation of every private right to be proved only by
preponderance of evidence? Is the right of the aggrieved person any
less private because the wrongful act is also punishable by the
criminal law? (Code Commission, pp. 45-46).

A separate civil action may be warranted where additional facts have

to be established or more evidence must be adduced or where the
criminal case has been fully terminated and a separate complaint
would be just as efficacious or even more expedient than a timely
remand to the trial court where the criminal action was decided for
further hearings on the civil aspects of the case. The offended party
may, of course, choose to file a separate action. These do not exist in
this case. Considering moreover the delays suffered by the case in the
trial, appellate, and review stages, it would be unjust to the
complainants in this case to require at this time a separate civil action
to be filed.

With this in mind, we therefore hold that the respondent Court of

Appeals did not err in awarding damages despite a judgment of
acquittal.

WHEREFORE, we hereby AFFIRM the decision of the respondent

Court of Appeals and dismiss the petition for lack of merit.
PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, Petitioner,
vs. THE HON. COURT OF APPEALS and CMS CONSTRUCTION and
DEVELOPMENT CORPORATION, Respondents.

Before Us is a Petition for Review on Certiorari under Rule 45 of the

Rules of Civil Procedure, assailing the Decision1 of the Court of
Appeals in CA-G.R. SP No. 66968, dated 26 August 2002, which
dismissed Philippine National Construction Corporations (PNCCs)
Petition for Review of the Decision2 of Sole Arbitrator Victor P.
Lazatin of the Construction Industry Arbitration Commission (CIAC)
awarding herein respondent CMS Construction and Development
Corporation (CMS) the amount of P1,978,746.90 with interest at the
rate of 6% per annum from 7 July 2000 up to the date of award and
thereafter, at an interest rate of 12% per annum until fully paid.

The present case arose when CMS submitted for arbitration before
the CIAC a complaint for sum of money with damages against PNCC in
connection with the relocation of the 450 mm diameter steel pipes
along the East Service Road of the South Luzon Tollway.
On 26 July 1996, PNCC entered into a Memorandum of Agreement
with the Toll Regulatory Board, Citra Metro Manila Tollways
Corporation and Metropolitan Waterworks Sewerage System (MWSS)
involving the task of relocating MWSS utilities along the South
Superhighway affected by the construction of the Manila South
Skyway Project. In undertaking said task, PNCC subcontracted the
relocation of the 450 mm diameter steel pipes to CMS as the winning
bidder. On 13 October 1997, even before the signing of a contract,
CMS proceeded to carry out the project upon request of PNCC.
A Subcontract Agreement was executed between PNCC and CMS on
21 October 1997. It was stated therein that the estimated contract
price was P7,990,172.61, inclusive of taxes, and that the project was
to be completed within seventy-five (75) calendar days from the
signing of the contract. It was further stipulated therein that the
contract price was merely an estimate and that the final price shall be
computed based on the actual accomplishment of the subcontractor
as approved and accepted by PNCC, the Toll Regulatory Board, and
the MWSS.
On 5 December 1997, PNCC informed CMS that it would provide the
necessary equipment, manpower, and materials to assure the
completion of the project and that all costs pertaining thereto would
be charged to the latters account. In another letter dated 19
December 1997, PNCC again reiterated that it would provide
manpower and equipment to CMS in order that the stated schedule
for the completion of the project shall be met. On 7 January 1998,
petitioner informed CMS that the seventy-five (75) days period for
the relocation of the steel pipes had already elapsed; however, the
said project was still far from completion. It was only sometime in
April 1999 that the project was finally completed.

In conformity to the letters sent by PNCC to CMS regarding the

manpower and equipment supplied by the former to ensure the
completion of the project, the following amounts were deducted by
petitioner from CMSs billings as "accommodations":
Billing No. 3 P 274,548.87
Billing No. 4 150,043.12
Billing No. 5 666, 895.54
TOTAL P1,091,487.53
Thereafter, PNCC and CMS amended the Subcontract Agreement on
23 November 1999, stating therein the final contract price in the
amount of P8,872,593.74, inclusive of taxes. It was also agreed upon
by the parties under the Contract Amendment that Appendix "A"
thereof constituted the final Bill of Quantities for scope of works
undertaken by the subcontractor (CMS) and superseded Annex "C" of
the 21 October 1997 Agreement and any bill of quantities earlier
agreed upon by the parties in connection with the project.
Furthermore, it was expressed therein that the said amendment
superseded the price stipulated in the original Subcontract
Agreement dated 21 October 1997 and any other commitment or
agreement on price pertaining to works covered therein.

Initially, there is no dispute that the retention money amounts to

P887,259.37 which is exactly equal to ten percent (10%) of the
Subcontract Price (TSN, 13 August 2001, pp. 7-8). Both parties
confirmed that no claim for defects was made by the Respondent or
the Owner/Client after April 19, 1999 to rectify what was completed
by the Claimant. (TSN, 13 August 2001, p. 10).
Secondly, at the initial hearing, the Claimant no longer insisted on its
claim for hydrotesting works (Issue No. 4) amounting to P563,675.00
due to paragraph 3 of the Contract Amendment (Exhibit C-2) (TSN, 13
August, p. 3).
Thirdly, some of the important details of Billing Nos. 3, 4 and 5 are as
follows:
a) Billing No. 3 was for P920,601.03. It was received by the
Respondent on June 1, 1998 and approved on September 25, 1998.
The deductions for asserted accommodations amounted to
P274,548.87. The amount paid was P646,052.12 which was paid in
three (3) tranches, to wit:
(i) P400,000 on January 21, 1999
(ii) P100,000 on April 11, 2000

(iii) P146,000 on February 8, 2001

According to CMS, the amended contract price has not been fully paid
by PNCC since Billing Nos. 3, 4, and 5 were only partially paid because
of the deductions made by the latter in the form of
"accommodations," which CMS insists must be disallowed.
After the proceedings, Sole Arbitrator Lazatin issued an Award, the
pertinent portions of which read:
Before resolving the specific issues raised by the parties, it would be
helpful to state certain findings established at the hearings which are
pivotal.

b) Billing No. 4 was for P255,334.13. It was received by the

Respondent on March 15, 1999 and approved on May 31, 1999. The
deductions for asserted accommodations amounted to P150,043.12.
The amount paid was P105,181.00 which paid on February 10, 2000.

c) Billing No. 5 was for P1,681,888.21. It was received by the

Respondent on December 3, 1999 and approved on August 4, 2000.
The deductions for asserted accommodations amounted to

P666,895.54. The amount paid was P921,706.79 which was paid on

June 7, 2001.

Fourthly, on 23 November 1999 (after the Project was completed),

the parties executed the Contract Amendment wherein the parties
agreed, among others, to wit:

(i) To constitute "Appendix A" thereof as the final Bill of Quantities for
scope of works undertaken by the Claimant and superseded/replaced
Annex C of the 21 October 1997 Subcontract Agreement (Exh. C-1).

(ii) P8,872,593.74 as the final Subcontract Price which "supersede(d)

the price stipulated in the original Subcontract Agreement dated 21
October 1997 P7,990,172.61 and any other commitment or
agreement on price pertaining to works covered herein."

(iii) "no further adjustment in price shall be effected and that

(Claimant) hereby waived any and all claims for price adjustments and
whatsoever in connection with the work herein covered except as
that stated in pa. 3 above of this Contract Amendment." (emphasis
supplied).

Fifthly, there is no clear documentation that Respondent sent, and

the Claimant received, much more accepted, the various charges for
the accommodations deducted by the Respondent. The testimony of
the witnesses of both parties are diametrically opposite. Likewise in
conflict are the respective verbal assertion of both sides that
manpower, equipment, and/or materials were actually provided by
the Respondent to the Claimant.

Sixth, the documentation of the Respondent with respect to its

invocation of Section 6.2 of the Subcontract Agreement (Exhibit R-5)
is faulty. The seven (7) day notice was not strictly complied with.
There was no specification of the items and costings of the charges
now asserted in the deductions/accommodations. The Claimant is
likewise remiss in failing to reply to Respondents various letters
(Exhibits R-20 to R-40, except for two (2) response) and take issue
with the same. The Respondent could not present proof that the
Claimant received and acknowledged the accommodations, despite
its verbal assertions that the Project Manager of the Claimant did.
There is also assertion that Claimant refused to acknowledge receipt
of the accommodations.

Lastly, and more importantly, the Claimant asserts that when the
parties agreed on the Contract Amendment (which is effectively a
compromise agreement) on 23 November 1999, Respondents claims
for deductions of the accommodations were deemed included in the
compromise. The Contract Amendment states that it "accordingly
supersedes the price stipulated x x x and any other commitment or
agreement on price pertaining to works covered herein" and "no
further adjustment in price shall be effected." It should be pointed
out that on 23 November 1999, respondent had already approved
Billing No. 3 (on September 25, 1998) and Billing No. 4 (on May 31,
1999) and asserted the deductions of the accommodations.
Moreover, all the claim for accommodations were already in
existence on 23 November 1999. x x x.

xxxx

WHEREFORE, PREMISES CONSIDERED, an award is hereby rendered

ordering the respondent to pay the Claimant the amount of
P1,978,746.90 with interest at the rate of 6% per annum from 7 July

2000 up to the date of this Award. Thereafter, the Award shall earn
interest at the rate of 12% per annum until fully paid.3

Aggrieved, PNCC sought recourse through a Petition for Review filed

before the Court of Appeals maintaining that there is no basis in fact
nor in law for the findings of the Sole Arbitrator that the deductions
for "accommodations" for Billing Nos. 3, 4, and 5 should be
disallowed as they already formed part of the compromise agreement
and that the said "accommodations" were not properly documented
and proved to bind CMS.

On 26 August 2002, the appellate court rendered a Decision affirming

the findings of Sole Arbitrator Lazatin. According to the Court of
Appeals:

It must be recalled that the parties initially agreed to a subcontract

price of P7,990,172.61 (par. 3.1 Subcontract Agreement, Exh. "R-3", p.
80, rollo); however, the same was increased to P8,872,593.74 (par.
9.1. Terms of Reference, p. 58, rollo; Final Bill of Quantities, p. 65,
rollo) subject to petitioner PNCCs outright deduction of 10% net
which would answer for any and all defect/s and/or deficiency/ies in
the workmanship. And all the accumulated retentions shall be
released within thirty days from the date of final acceptance of
subcontracted work and which could be attained only after the lapse
of the warranty period stipulated. (pars. 4.4 & 4.5., Subcontract
Agreement, p. 81, rollo; Contract Amendment, Exh. "R-15", p. 98,
rollo). Thus, 10% of the subcontract price of P8,872,593.74 is
P887,259.37, which should be automatically deducted, it being part of
the Subcontract Agreement" which to Our mind should be respected,
since the same was not part of the amendment of the contract. When
the terms of an agreement have been reduced to writing, it is to be
considered as containing all the terms agreed upon and there can be,
between the parties and their successors in interest, no evidence of

such terms other than the contents of the written agreement. (Sec. 9,
par. 1, Rule 130 Rules on Evidence) And there being no evidence on
record which showed that petitioner PNCC claimed for any defects on
the completed project against respondent CMS after April 1999, the
aforementioned amount of P887,259.37 should now be released/paid
to the latter.

Coming now to the resolutions of whether or not the deductions for

accommodations made by petitioner PNCC in billing nos. 3 to 5 were
part of the compromise settlement and whether the same were
properly documented, We opine that the same were part of the
compromise settlement and the same were not properly
documented.

Petitioner PNCC contended that in view of respondent CMS delay in

the execution of the project, it supplied the necessary manpower,
equipment and materials in order to assure the completion of the
works; however, the record of the case is bereft of any evidence
which would show that indeed petitioner PNCC had supplied the
necessary manpower, equipment and materials for the project, aside
from petitioners letter dated December 5, 1997 which stated that it
would supply the same. (p. 92, rollo).

Petitioners reliance on Article VI, par. 6.2.1 of the Subcontract

Agreement which states:

"In the event Subcontractor fails to comply with the requirement

stated therein within seven (7) days from notice/demand to comply,
PNCC shall have the authority to secure the necessary manpower,
equipment from other sources, to assure completion of the works. All
costs and expenses, including handling of charges, transportation,
rentals for machinery/equipment and other expenses incidental

thereto shall be for the account of Subcontractor and may be

deducted from whatever amount that may be due or become due to
Subcontractor under this or in any agreement between the parties.

is basically misplaced. While there was petitioner PNCCs letter dated

February 16, 1998 sent to respondent CMS informing the latter that it
had not coped up (sic) with the work schedule and thus requiring it to
submit other requirements such as daily accomplishment reports and
target weekly accomplishments; nevertheless, the same is not
determinant of whether or [not] the seven day notice was strictly
complied with. (Exh. "R-32" p. 95, rollo).

estimation of the evidence presented, they are conclusive, and in the

interest of stability of the government structure, should not be
disturbed. (Ocampo vs. Commission on Elections, 325 SCRA 636). It is
likewise not for the reviewing court to weigh the conflicting evidence,
determine the credibility of the witnesses, or otherwise substitute its
own judgment for that of the administrative agency on the sufficiency
of the evidence; that the administrative decision in matters, within
the executive jurisdiction, can only be set aside on proof of grave
abuse of discretion, fraud, or error of law (cited in Lo vs. Court of
Appeals, 321 SCRA 190). We hold that the Sole Arbitrators findings
and conclusion as aptly ratiocinated in his assailed decision are in
accord with the facts and evidence on record and as such, must be
respected.

xxxx
xxxx
In fine, there was no evidence on record which proved that the
aforecited deductions for accommodations were sent and received by
respondent CMS. Neither was there any specification of the items and
costings of the charges now asserted in the deductions for
accommodations.

xxxx

In view of the above disquisitions, We are inclined to uphold the sole

arbitrators findings and conclusions, disallowing the deductions for
accommodations made by petitioner PNCC against respondent CMS.
Consequently, respondent CMS should be paid for the deductions
made by petitioner PNCC in the amount of P1,091,487.53. It is a
hornbook doctrine in our jurisdiction that findings of facts of
administrative bodies charged with their specific field of expertise,
are afforded great weight by the courts, and in the absence of
substantial showing that such findings are made from an erroneous

WHEREFORE, premises considered the PETITION FOR REVIEW is

hereby Denied with modifications. Accordingly, a Decision is hereby
rendered as follows:

1) Ordering petitioner Philippine National Construction Corporation

to pay respondent CMS Construction and Development Corporation
the total amount of P1,978,746.90 plus 6% interest per annum from
date of demand which is from July 7, 2000 until fully satisfied, but
before judgment becomes final. From the date of finality of the
judgment until the obligation is totally paid. A TWELVE PERCENT
(12%) interest, in lieu of the SIX PERCENT (6%) interest shall be
imposed; and

2) Deleting the award for arbitration fees in favor of the respondent

CMS Construction and Development Corporation in the amount of
P29,264.51 for lack of factual and legal basis.4

Petitioners Motion for Reconsideration having been denied, PNCC

filed the instant petition assailing the Decision of the appellate court
on the sole ground that the Court of Appeals erred in upholding the
Sole Arbitrators findings and conclusion disallowing the deductions
for accommodations made by PNCC against CMS.

Before we delve into the substantial issue raised by petitioner, we

shall first address the procedural issue raised by respondent.
According to CMS, the issue raised by petitioner is not a proper
subject of an appeal under Rule 45 of the Rules of Court. CMS
maintains that in assailing the findings and conclusions of the Sole
Arbitrator as affirmed by the Court of Appeals, petitioner only puts
into issue the findings of facts which are the bases thereof. And this
Court, being not a trier of facts, is not duty-bound to probe into the
accuracy of said factual findings, in the absence of clear showing that
the same were arbitrary and bereft of any rational basis.

On the other hand, PNCC claims that the instant petition involves a
question of law as the main issue herein is the proper interpretation
of the Contract Amendment executed between the parties, and
whether or not deductions for "accommodations" given by PNCC are
allowed under said Contract Amendment.

To be sure, questions of law are those that involve doubts or

controversies on what the law is on certain state of facts; and
questions of fact, on the other hand, are those in which there is doubt
or difference as to the truth or falsehood of the alleged facts. One
test, it has been held, 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 will be a question of
fact.5

We agree with petitioner that the instant case involves a question of

law. At the heart of this controversy before us is the issue of whether
or not the "accommodations" claimed by PNCC may be properly
deducted from the contract price stipulated under the Subcontract
Agreement as modified by the Contract Amendment. The resolution
of said issue, thus, entails an interpretation of the provisions of both
agreements executed by both parties. And as correctly pointed out by
petitioner, where an interpretation of the true agreement between
the parties is involved in the appeal, the appeal is in effect an inquiry
of the "law" between the parties and their successors in interest, its
interpretation necessarily involves a question of law, properly raised
in the certiorari proceedings.6

Having resolved the procedural issue raised herein, we now proceed

to determine the singular substantial issue raised in the instant
petition.

PNCC maintains that Sole Arbitrator Lazatin acted arbitrarily or with

grave abuse of discretion when he denied the deductions being
claimed by petitioner. According to PNCC, the deductions or
"accommodations" made in Billing Nos. 3, 4, and 5 are allowed under
Article VI, Paragraph 6.2.1 of the Subcontract Agreement, which
states that:

6.2.1 In the event SUBCONTRACTOR fails to comply with the above

requirement stated therein within seven (7) days from
notice/demand to comply, PNCC shall have the authority to secure
the necessary manpower, equipment from other sources, to assure
completion of the works. All costs and expenses, including handling of
charges, transportation rentals for machineries/equipment and other
expenses incidental thereto, shall be for the account of
SUBCONTRACTOR and may be deducted from whatever amount that

may be due or become due to SUBCONTRACTOR under this or in any

agreement between the parties. In such case, however, PNCC shall
exert its best efforts to minimize the costs.

Thus, PNCC claims that from the abovequoted provision of the

Subcontract Agreement, it is evident that "accommodations" for
additional manpower or equipment supplied by PNCC in the project
are deductible from whatever amount due to CMS as subcontractor.

There is no dispute that under the aforecited provision, deductions or

"accommodations" may be made against the account of the
subcontractor; however, it is pivotal at this point to underscore an
important provision in the Contract Amendment signed by the parties
on 23 November 1999. According to said amendment to the
Subcontract Agreement, Appendix "A" thereof constitutes the final
Bill of Quantities for scope of works undertaken by the subcontractor
(CMS) and supersedes Annex "C" of the 21 October 1997 Agreement
and any bill of quantities earlier agreed upon by the parties in
connection with the project.1avvphi1.net

It is clear from a reading of said provision of the Contract Amendment

executed after the completion of said project and after PNCC had
determined the alleged deductions it was to charge against CMSs
account that Annex "A" thereof reflects the scope of work undertaken
by CMS. Said Bill of Quantities therefore enumerates the costs borne
by CMS as subcontractor in the accomplishment of the project.

A careful perusal of Annex "A" of the Contract Amendment will show

that the final Bill of Quantities for the scope of works undertaken by
CMS for the project amounts to P8,872,593.74. There is no mention,
either in the body of said Contract Amendment nor in the annex
attached thereto, regarding the alleged "accommodations" which

PNCC shall deduct from the amount payable to CMS. It would only be
logical, therefore, to conclude that the Contract Amendment and
Annex "A" attached thereto already reflect the actual amount to be
paid to CMS for the scope of work it rendered regarding the
relocation of the 450 mm pipe along the East Service Road of the
South Luzon Tollway, said amendment having been executed after
PNCC had already determined the necessary deductions to be made
against the account of CMS.

The agreement or contract between the parties is the formal

expression of the parties rights, duties and obligations.7 It is the best
evidence of the intention of the parties.8 Thus, when the terms of an
agreement have been reduced to writing, it is considered as
containing all the terms agreed upon and there can be, between the
parties and their successors in interest, no evidence of such terms
other than the contents of the written agreement.9 Furthermore, it is
a cardinal rule that if the terms of a contract are clear and leave no
doubt as to the intention of the contracting parties, the literal
meaning of its stipulation shall control.10
Petitioner miserably failed to establish that Sole Arbitrator Lazatin
acted arbitrarily or with grave abuse of discretion when he denied the
deductions claimed by petitioner. If ever Sole Arbitrator Lazatin may
have committed any error in his interpretation of the Subcontract
Agreement and the Contract Amendment, such possible error is not
tantamount to grave abuse of discretion, but merely an error of
judgment. An error of judgment is one which the court may commit
in the exercise of its jurisdiction, and which error is reviewable only
by an appeal.11 On the other hand, an error of jurisdiction is one
where the act complained of was issued by the court, officer or a
quasi-judicial body without or in excess of jurisdiction, or with grave
abuse of discretion which is tantamount to lack or in excess of
jurisdiction.12 This error is correctable only by the extraordinary writ
of certiorari.13

Nonetheless, we see no reason to disregard the determinations made

by Sole Arbitrator Lazatin. As has been discussed above, the
contention of PNCC that it may legally deduct certain
accommodations from the contract price as contained in the Bill of
Quantities attached to the Contract Amendment has no leg to stand
on. Furthermore, in the absence of any showing of grave abuse of
discretion, this Court must sustain the factual findings of the Sole
Arbitrator as sustained by the Court of Appeals, this being in
accordance with the established principle that determination of
certain questions of fact falling within the peculiar technical expertise
of an administrative agency, must be accorded great respect, if not
finality by this Court. A long line of cases establishes the basic rule
that the court will not interfere in matters which are addressed to the
sound discretion of government agencies entrusted with the
regulation of activities coming under the special technical knowledge
and training of such agencies.14 The CIAC, having been duly
constituted by law as the quasi-judicial agency accorded with
jurisdiction to resolve disputes arising from contracts involving
construction in the Philippines,15 this Court must confer finality to its
findings as they are supported by the evidence in this case.
WHEREFORE, premises considered, the instant petition is hereby
DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 66968
dated 26 August 2002 is hereby AFFIRMED. Costs against petitioner.