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BENGSON vs CHAN 1977 the contract for construction.

Bengson also argues that if arbitration is


proper, TC should have required the parties to proceed to arbitration (not
FACTS: dismissal)

Bengson and Chan entered into a contract for the construction of a 6-story R argues that it is not restricted to disputes relative to the technical process of
building on Bengsons lot. In that contract, Bengson found herself to pay putting up the building.
Chan, the contractor, P352k for the materials labor and construction
expenses. ISSUES: WON the failure to resort to arbitration warrants the dismissal
of a complaint NO
They stipulated that:
a) Construction starts on July 5, 1955 HELD:
b) 1st and 2nd stories, as well as the theater should be completed for use Bengsons distinction between the contract for the construction of the building
within 5 months and the construction of the building is not convincing. So its still covered.
c) Construction should be finished within 12 calendar months
SC ruled that although the causes of action in the complaint are covered by
The arbitration clause provides that any disputes arising between the the clause, her failure to resort to arbitration does not warrant the
parties relative to the construction of the building shall be determined by dismissal of her complaint. Arbitration may be resorted to during the
arbitration of 2 persons, each chosen by the parties themselves. The pendency of the case. Arbitration Law Sec 6 provides that an aggrieved
determination of the arbitration shall be final, conclusive and binding party by the failure, neglect or refusal of another to perform under an
upon the parties UNLESS they choose to go to court, in which case the agreement in writing providing for arbitration may petition the court for an
determination by arbitration is a condition precedent for taking any court order directing the such arbitration proceed in the manner agreed upon. Sec 7
action. Expense shall be borne equally by the parties. provides that in any suit brought upon an issue arising out of an agreement
providing for the arbitration, the court in which such suit is pending, upon
Bengson filed an action for damages against Chan alleging that Chan violated being satisfied that the issue involved in such suit is referable to arbitration,
the contract when it failed to finish the 1st and 2nd stories within the 5 month shall stay the action or proceeding until an arbitrary has been had.
period. Provided, that the applicant for the stay is not in default in proceeding with
such arbitration.
Chan and his sureties (Leoncio Chan owner of Universal Construction
Supply and Mutual Security Insurance Corp) alleged that: In this case, the failure of Bengson to resort to arbitration may be regarded as
a) They stopped the construction because Bengson refused to pay for a refusal to comply with the stipulation for arbitration. Defendants defense that
the 90% of the work already accomplished arbitration is a condition precedent of a court action may be interpreted as a
b) Construction really started in Feb because of the changes requested petition for an order that arbitration should proceed.
by Bengson
c) The 5 month period was novated by the parties Instead of dismissing the case, the proceedings should be suspended
and parties should be directed to go through the motions of arbitration
They also alleged as an affirmative defense that complaint states no atleast within 60 days. With the consent of the parties, TC may appoint a
cause of action since Bengson did not submit the controversy for 3rd arbitrator to prevent a deadlock between the 2 arbitrators. If the
arbitration as stipulated in their contract. dispute could not be settled by such, then the hearing of the instant
case should be resumed.
TC ruled that the COAs were embraced under the contract hence they
shouldve brought it up to the arbitration first. TC dimissed! So P Bengson END!
appealed.
Provision just in case lang
P Bengson argues that the contract refers to disputes as to the technical
process of putting up the building and that her causes of action for damages The Arbitration Law provides:
do not involve question as to the construction but it is based on violation of
SEC. 6. Hearing by court. A party aggrieved by the failure, neglect or refusal of another to
perform under an agreement in writing providing for arbitration may petition the court for an order The court shall decide all motions, petitions or applications filed under the provisions of this Act,
directing that such arbitration proceed in the manner provided for in such agreement. Five days within ten days after such motions, petitions, or applications have been heard by it.
notice in writing of the hearing of such application shall be served either personally or by
registered mail upon the party in default. The court shall hear the parties, and upon being satisfied
SEC. 7. Stay of civil action. If any suit or proceeding be brought upon an issue arising out of an
that the making of the agreement or such failure to comply therewith is not in issue, shall make an
agreement providing for the arbitration thereof, the court in which such quit or proceeding is
order directing the parties to proceed to arbitration in accordance with the terms of the agreement.
pending, upon being satisfied that the issue involved in such suit or proceeding is referable to
If the making of the agreement or default be in issue the court shall proceed to summarily hear
arbitration, shall stay the action or proceeding until an arbitration has been had in accordance
such issue. If the finding be that no agreement in writing providing for arbitration was made, or
with the terms of the agreement: Provided, That the applicant for the stay is not in default in
that there is no default in the proceeding thereunder, the proceeding shall be dismissed. If the
proceeding with such arbitration.
finding be that a written provision for arbitration was made and there is a default in proceeding
thereunder, an order shall be made summarily directing the parties to proceed with arbitration in
accordance with the terms thereof.