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BF CORPORATION, petitioner, vs. MANILA INTERNATIONAL AIRPORT AUTHORITY, respondent

G.R. No. 164517
Cause of action in general
FACTS:
I.

A. BF CORPORATION (petitioner)
B. MANILA INTERNATIONAL AIRPORT AUTHORITY (respondents)
Mitsubishi, Tokyu, Oreta, and BF formed the MTOB Consortium (Consortium) to
participate in the bidding for the construction of the Ninoy Aquino International Airport
Terminal II (NAIA II) Project. MIAA subsequently awarded the project to the Consortium,
recognizing that the Consortium had a distinct personality from the four member
corporations.
The members had disagreement regarding the division of the contract price, which
forced BF to file with the RTC an action for Specific Performance, Rescission, and
Damages with application for a Temporary Restraining Order (TRO), alleging that after
the four members agreed to the terms (couched in general terms); Tokyu refused to
execute a final consortium agreement. BF prayed that Tokyu be enjoined from
receiving payment from MIAA, from engaging other contractors to do BFs part in the
contract, from acting as the lead partner in the contract, and from compelling BF from
reducing its prices.

II.

The RTC served a TRO on Tokyu. During the hearing, MIAA stressed their position that it
should not be dragged into the dispute of the Consortium because it was internal
dispute and MIAA was not included in that. BF subsequently dropped MIAA as a party
defendant. Because of the RTC order, Tokyu filed a Petition for certiorari and prohibition
with prayer for a writ of preliminary injunction.

III.

The Court of Appeals dismissed the petition and ordered the trial court to proceed with
the main hearing. When the project was nearing completion, BF filed a second
amended complaint, in this complaint BF pleaded causes of action against Tokyu,
Mitsubishi, and Oreta as well as MIAA who had possession of the money to be paid to
Tokyu. BF asked then for MIAA to be re-impleaded so they can obtain complete relief.
The RTC then re-impleaded MIAA as a party to the case, to which MIAA appealed before
the CA. The CA granted MIAAs petition and set aside the RTC ruling. The CA ruled that
BF had no cause of action against MIAA, defining Cause of action as an act or
omission which would give BF a right against MIAA. The CA ruled that BF was a
stranger in the contract between Consortium and MIAA. Hence, petition before the SC.

ISSUE: Did the Court of Appeals err in ruling that BF had no cause of action? NO.
RULING: No, the CA did not err in ruling that BF had no cause of action. Cause of action is defined
as an act or omission by which one party violates a right of another. It has three elements; (1) a
right existing in favor of the plaintiff, (2) a duty on the part of the defendant to respect the right
of the plaintiff, (3) a breach in the defendants duty. The SC ruled that a scrutiny of the
agreement would show that there is nothing that would constitute acts or omissions of MIAA that
violates BFs rights.
The SC ruled that the best evidence to show whether or not BF has a cause of action against
MIAA is the contract/agreement itself. The Agreement awarding the NAIA II Project to the

Consortium was between MIAA and the Consortium, as contractor, represented by the
Consortiums project manager. BF was not a party to the Agreement because the MIAA had
expressly recognized the Consortium is separate and distinct from the member corporations.
WHEREFORE, we DENY this petition and AFFIRM the CAs Decision dated January 9, 2004 and
Resolution dated July 13, 2004 in CA-G.R. SP No. 67765.