Article 1174

NATIONAL POWER CORPORATION vs. THE COURT OF APPEALS

G.R. No. 96410 July 3, 1992
NOCON, J.:
FACTS: In the early morning hours of October 27, 1978, at the height of typhoon "Kading", a massive
flood covered the towns near Angat Dam, particularly the town of Norzagaray, causing several deaths and
the loss and destruction of houses, farms, plants, working animals and other properties of the people
residing near the Angat River. Private respondents blamed the sudden rush of water to the reckless and
imprudent opening of all the three (3) floodgates of the Angat Dam spillway, without prior warning to the
people living near or within the vicinity of the dam. In view of these, an action for damages was filed by
respondents. The trial court ruled in favor of the latter. Likewise the Court of Appeals affirmed with said
decision. Hence, a petition for review on certiorari was instituted by the National Power Corporation
(NPC) and Benjamin Chavez, Plant Superintendent of NPC.
Petitioners denied private respondents' allegations and, by way of defense, contended that they have
maintained the water in the Angat Dam at a safe level and that the opening of the spillways was done
gradually and after all precautionary measures had been taken. Petitioner NPC further contended that it
had always exercised the diligence of a good father in the selection of its officials and employees and in
their supervision. It also claimed that written warnings were earlier sent to the towns concerned, and that
there was no direct causal relationship between the alleged damages suffered by the respondents and
the acts and omissions attributed to the former. That it was the respondents who assumed the risk of
residing near the Angat River, and even assuming that respondents suffered damages, the cause was
due to a fortuitous event and such damages are of the nature and character of damnum absque injuria,
hence, respondents have no cause of action against them.
ISSUE: Whether petitioners can escape civil liability by invoking force majeure as the proximate cause of
the loss and damage.
HELD: No. Petitioners cannot escape liability because their negligence is the proximate cause of the loss
and damage. Act of God or force majeure, by definition, are extraordinary events not foreseeable or
avoidable, events that could not be foreseen, or which, though foreseen, are inevitable. It is therefore not
enough that the event should not have been foreseen or anticipated, as is commonly believed, but it must
be one impossible to foresee or to avoid. 7 As a general rule, no person shall be responsible for those
events which could not be foreseen or which though foreseen, were inevitable.
However, the principle embodied in the act of God doctrine strictly requires that the act must be
occasioned solely by the violence of nature. Human intervention is to be excluded from creating or
entering into the cause of the mischief. When the effect is found to be in part the result of the participation
of man, whether due to his active intervention or neglect or failure to act, the whole occurrence is then
humanized and removed from the rules applicable to the acts of God.
Generally it cannot be said that damage, injury or loss is due to an act of God where it was caused merely
by excessive or heavy rainfall, storms and to weather conditions which are not unusual in character, those
which could have been reasonably anticipated or where the injury complained of is due rather to the
negligence or mismanagement of man than to the disturbance of the elements or where such damage,
injury or loss might have been mitigated or prevented by diligence exercised after the occurrence.
In the case at bar, although the typhoon "Kading" was an act of God, petitioners can not escape liability
because their negligence was the proximate cause of the loss and damage. The Court of Appeals found
that the defendants failed to take the necessary safeguards to prevent the danger that the Angat Dam
posed in a situation of such nature as that of typhoon "Kading". The representative of the "PAG-ASA" who
testified in these proceedings, Justo Iglesias, Jr., stated that based on their records the rainfall on October
26 and 27, 1978 is classified only as moderate, and could not have caused flash floods. He testified that
flash floods exceeds 50 millimeters per hour and lasts for at least two (2) hours. He stated that typhoon
"Yaning" which occurred on October 7 to 14, 1978 gave a much heavier rainfall than "Kading", and so did
other previous typhoons.

Also, despite of the announcements of the newspaper of the expected occurrence of a powerful typhoon
code-named "Kading", the water level in the dam was maintained at its maximum from October 21, until
midnight of October 26, 1978.
It has been held in several cases that when the negligence of a person concurs with an act of God
producing a loss, such person is not exempt from liability by showing that the immediate cause of the
damage was the act of God. To be exempt he must be free from any previous negligence or misconduct
by which the loss or damage may have been occasioned.
WHEREFORE, finding no reversible error in the Decision appealed from, the same is hereby affirmed in
toto, with cost against petitioner.
Globe Telecom vs. Philippine Communications Satellite Corp.
(G.R. No.147324, August 25, 2004)
FACTS: Globe had been engaged in the coordination of the provision of various communication facilities
for the military bases of the US in Clark Air Base and Subic Naval Base. The said communication facilities
were installed and configured for the exclusive use of the US Defense Communications Agency
(USDCA), and for security reasons, were operated only by its personnel or those of American companies
contracted by it to operate said facilities. The USDCA contracted with said American companies, and the
latter, in turn, contracted with Globe for the use of the communication facilities. Globe, on the other hand,
contracted with local service providers such as the Philippine Communications Satellite Corporation
(Philcomsat) for the provision of the communication facilities.
On 07 May 1991, Philcomsat and Globe entered into an Agreement whereby Philcomsat obligated itself to
establish, operate and provide an IBS Standard B earth station (earth station) within Cubi Point for the
exclusive use of the USDCA. The term of the contract was for 5 years. In turn, Globe promised to pay
Philcomsat monthly rentals for each leased circuit involved.
Both parties knew that the Military Bases Agreement between the Republic of the Philippines and the US
was to expire in 1991. On August 6, 1992, Globe notified Philcomsat of its intention to discontinue the use
of the earth station effective November 8, 1992 in view of the termination of the RP-US Military Bases
Agreement.
After the US military forces left Subic Naval Base, Philcomsat sent Globe a letter dated November 24,
1993 demanding payment of its outstanding obligations under the Agreement amounting to
US$4,910,136.00 plus interest and attorneys fees. However, Globe refused to heed Philcomsats
demand.
ISSUES:
1.
Whether the termination of the RP-US Military Bases Agreement constitute force majeure which
would exempt Globe from complying with its obligation to pay rentals under its Agreement with
Philcomsat;
2.
Whether Globe is liable to pay rentals under the Agreement for the month of December 1992; and
3.
Whether Philcomsat is entitled to attorneys fees and exemplary damages.
HELD:
First Issue: Yes. Article 1174, which exempts an obligor from liability on account of fortuitous events or
force majeure, refers not only to events that are unforeseeable, but also to those which are foreseeable,
but inevitable. Philcomsat and Globe agreed in Section 8 of the Agreement that the following events shall
be deemed events constituting force majeure: particularly: 1. any law, order, regulation, direction or
request of the Philippine Government. Under Article 1306 of the Civil Code, parties to a contract may
establish such stipulations, clauses, terms and conditions as they may deem fit, as long as the same do
not run counter to the law, morals, good customs, public order or public policy. Not being contrary to law,
morals, good customs, public order, or public policy, Section 8 of the Agreement which Philcomsat and
Globe freely agreed upon has the force of law between them.
Second Issue: Yes. The US military forces and personnel completely withdrew from Cubi Point only on
December 31, 1992. Thus, until that date, the USDCA had control over the earth station and had the
option of using the same thus the Court of Appeals did not err when it affirmed the trial courts ruling that
Globe is liable for payment of rentals until December 1992.
Third Issue: No. Philcomsat is not entitled to attorneys fees and exemplary damages.

The award of attorneys fees is the exception rather than the rule, and must be supported by factual, legal
and equitable justifications. In previously decided cases, the Court awarded attorneys fees where a party
acted in gross and evident bad faith in refusing to satisfy the other partys claims and compelled the
former to litigate to protect his rights; when the action filed is clearly unfounded, or where moral or
exemplary damages are awarded. However, in cases where both parties have legitimate claims against
each other and no party actually prevailed, such as in the present case where the claims of both parties
were sustained in part, an award of attorneys fees would not be warranted.
Exemplary damages may be awarded in cases involving contracts or quasi-contracts, if the erring party
acted in a wanton, fraudulent, reckless, oppressive or malevolent manner. In the present case, it was not
shown that Globe acted wantonly or oppressively in not heeding Philcomsats demands for payment of
rentals. It was established during the trial of the case before the trial court that Globe had valid grounds
for refusing to comply with its contractual obligations after 1992.
SICAM VS. JORGE
MARCH 28, 2013 ~ VBDIAZ
ROBERTO C. SICAM and AGENCIA
G.R. No. 159617, August 8, 2007

de

R.C.

SICAM,

INC.

vs.

SPOUSES

JORGE

FACTS: On different dates, Lulu Jorge pawned several pieces of jewelry with Agencia de R. C. Sicam
located in Paraaque to secure a loan.
On October 19, 1987, two armed men entered the pawnshop and took away whatever cash and jewelry
were
found
inside
the
pawnshop
vault.
On the same date, Sicam sent Lulu a letter informing her of the loss of her jewelry due to the robbery
incident in the pawnshop. Respondent Lulu then wroteback expressing disbelief, then requested Sicam to
prepare the pawned jewelry for withdrawal on November 6, but Sicam failed to return the jewelry.
Lulu, joined by her husband Cesar, filed a complaint against Sicam with the RTC of Makati seeking
indemnification for the loss of pawned jewelry and payment of AD, MD and ED as well as AF.
The RTC rendered its Decision dismissing respondents complaint as well as petitioners counterclaim.
Respondents appealed the RTC Decision to the CA which reversed the RTC, ordering the appellees to
pay appellants the actual value of the lost jewelry and AF. Petitioners MR denied, hence the instant
petition for review on Certiorari.
ISSUE: are the petitioners liable for the loss of the pawned articles in their possession? (Petitioners insist
that they are not liable since robbery is a fortuitous event and they are not negligent at all.)
HELD: The Decision of the CA is AFFIRMED.
YES
Article
1174
of
the
Civil
Code
provides:
Art. 1174. Except in cases expressly specified by the law, or when it is otherwise declared by stipulation,
or when the nature of the obligation requires the assumption of risk, no person shall be responsible for
those events which could not be foreseen or which, though foreseen, were inevitable.
Fortuitous events by definition are extraordinary events not foreseeable or avoidable. It is therefore, not
enough that the event should not have been foreseen or anticipated, as is commonly believed but it must
be one impossible to foresee or to avoid. The mere difficulty to foresee the happening is not impossibility
to
foresee
the
same.
To
constitute
a
fortuitous
event,
the
following
elements
must
concur:
(a) the cause of the unforeseen and unexpected occurrence or of the failure of the debtor to comply with
obligations
must
be
independent
of
human
will;
(b) it must be impossible to foresee the event that constitutes the caso fortuito or, if it can be foreseen, it
must
be
impossible
to
avoid;
(c) the occurrence must be such as to render it impossible for the debtor to fulfill obligations in a normal
manner;
and,
(d) the obligor must be free from any participation in the aggravation of the injury or loss.
The burden of proving that the loss was due to a fortuitous event rests on him who invokes it. And, in
order for a fortuitous event to exempt one from liability, it is necessary that one has committed no
negligence
or
misconduct
that
may
have
occasioned
the
loss.

Sicam had testified that there was a security guard in their pawnshop at the time of the robbery. He
likewise testified that when he started the pawnshop business in 1983, he thought of opening a vault with
the nearby bank for the purpose of safekeeping the valuables but was discouraged by the Central Bank
since pawned articles should only be stored in a vault inside the pawnshop. The very measures which
petitioners had allegedly adopted show that to them the possibility of robbery was not only foreseeable,
but actually foreseen and anticipated. Sicams testimony, in effect, contradicts petitioners defense of
fortuitous event.
Moreover, petitioners failed to show that they were free from any negligence by which the loss of the
pawned jewelry may have been occasioned.
Robbery per se, just like carnapping, is not a fortuitous event. It does not foreclose the possibility of
negligence on the part of herein petitioners.
Petitioners merely presented the police report of the Paraaque Police Station on the robbery committed
based on the report of petitioners employees which is not sufficient to establish robbery. Such report also
does not prove that petitioners were not at fault. On the contrary, by the very evidence of petitioners, the
CA did not err in finding that petitioners are guilty of concurrent or contributory negligence as provided in
Article 1170 of the Civil Code, to wit:
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.
**
Article 2123 of the Civil Code provides that with regard to pawnshops and other establishments which are
engaged in making loans secured by pledges, the special laws and regulations concerning them shall be
observed, and subsidiarily, the provisions on pledge, mortgage and antichresis.
The provision on pledge, particularly Article 2099 of the Civil Code, provides that the creditor shall take
care of the thing pledged with the diligence of a good father of a family. This means that petitioners must
take care of the pawns the way a prudent person would as to his own property.
In
this
connection,
Article
1173
of
the
Civil
Code
further
provides:
Art. 1173. The fault or negligence of the obligor consists in the omission of that diligence which is required
by the nature of the obligation and corresponds with the circumstances of the persons, of time and of the
place. When negligence shows bad faith, the provisions of Articles 1171 and 2201, paragraph 2 shall
apply.
If the law or contract does not state the diligence which is to be observed in the performance, that which
is expected of a good father of a family shall be required.
We expounded in Cruz v. Gangan that negligence is the omission to do something which a reasonable
man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do; or
the doing of something which a prudent and reasonable man would not do. It is want of care required by
the circumstances.
A review of the records clearly shows that petitioners failed to exercise reasonable care and caution that
an ordinarily prudent person would have used in the same situation. Petitioners were guilty of negligence
in the operation of their pawnshop business. Sicams testimony revealed that there were no security
measures adopted by petitioners in the operation of the pawnshop. Evidently, no sufficient precaution and
vigilance were adopted by petitioners to protect the pawnshop from unlawful intrusion. There was no clear
showing that there was any security guard at all. Or if there was one, that he had sufficient training in
securing a pawnshop. Further, there is no showing that the alleged security guard exercised all that was
necessary to prevent any untoward incident or to ensure that no suspicious individuals were allowed to
enter the premises. In fact, it is even doubtful that there was a security guard, since it is quite impossible
that he would not have noticed that the robbers were armed with caliber .45 pistols each, which were
allegedly poked at the employees. Significantly, the alleged security guard was not presented at all to
corroborate petitioner Sicams claim; not one of petitioners employees who were present during the
robbery incident testified in court.
Furthermore, petitioner Sicams admission that the vault was open at the time of robbery is clearly a proof
of petitioners failure to observe the care, precaution and vigilance that the circumstances justly
demanded.
The robbery in this case happened in petitioners pawnshop and they were negligent in not exercising the
precautions justly demanded of a pawnshop.
NOTES:

We, however, do not agree with the CA when it found petitioners negligent for not taking steps to insure
themselves against loss of the pawned jewelries.
Under Section 17 of Central Bank Circular No. 374, Rules and Regulations for Pawnshops, which took
effect on July 13, 1973, and which was issued pursuant to Presidential Decree No. 114, Pawnshop
Regulation Act, it is provided that pawns pledged must be insured, to wit:
Sec. 17. Insurance of Office Building and Pawns- The place of business of a pawnshop and the pawns
pledged to it must be insured against fire and against burglary as well as for the latter(sic), by an
insurance
company
accredited
by
the
Insurance
Commissioner.
However, this Section was subsequently amended by CB Circular No. 764 which took effect on October
1, 1980, to wit:
Sec. 17 Insurance of Office Building and Pawns The office building/premises and pawns of a pawnshop
must
be
insured
against
fire.
(emphasis
supplied).
where the requirement that insurance against burglary was deleted. Obviously, the Central Bank
considered it not feasible to require insurance of pawned articles against burglary.
The robbery in the pawnshop happened in 1987, and considering the above-quoted amendment, there is
no statutory duty imposed on petitioners to insure the pawned jewelry in which case it was error for the
CA to consider it as a factor in concluding that petitioners were negligent.
Nevertheless, the preponderance of evidence shows that petitioners failed to exercise the diligence
required of them under the Civil Code.
Japan Airlines V. Asuncion (G.R No. 161730, January 28,2005) 449 SCRA 544
FACTS:
This petition for review seeks to reverse and set aside the October 9, 2002 decision of the Court of
Appeals and its January 12, 2004 resolution, which affirmed in toto the June 10, 1997 decision of the
Regional Trial Court of Makati City, Branch 61 in Civil Case No. 92-3635.
On March 27, 1992, respondents Michael and Jeanette Asuncion left Manila on board Japan Airlines
(JAL) Flight 742 bound for Los Angeles. Their itinerary included a stop-over in Narita and an overnight
stay at Hotel Nikko Narita. Upon arrival at Narita, Mrs. Noriko Etou-Higuchi of JAL endorsed their
applications for shore pass and directed them to the Japanese immigration official. A shore pass is
required of a foreigner aboard a vessel or aircraft who desires to stay in the neighborhood of the port of
call
for
not
more
than
72
hours.
During their interview, the Japanese immigration official noted that Michael appeared shorter than his
height as indicated in his passport. Because of this inconsistency, respondents were denied shore pass
entries and were brought instead to the Narita Airport Rest House where they were billeted overnight.
Mr. Atsushi Takemoto of the International Service Center (ISC), the agency tasked by Japans Immigration
Department to handle passengers who were denied shore pass entries, brought respondents to the Narita
Airport Rest House where they stayed overnight until their departure the following day for Los Angeles.
Respondents were charged US$400.00 each for their accommodation, security service and meals.
On December 12, 1992, respondents filed a complaint for damages claiming that JAL did not fully apprise
them of their travel requirements and that they were rudely and forcibly detained at Narita Airport.
Issue:

Whether

or

not

JAL

is

liable

of

breach

of

contract

of

carriage.

Side
Issues:

Whether
or
not
JAL
is
liable
for
moral,
exemplary
damages,
Whether or not the plaintiff is liable for attorneys fee and cost of suit incurred (JAL counterclaim)
Ruling:
The court finds that JAL did not breach its contract of carriage with respondents. It may be true that JAL
has the duty to inspect whether its passengers have the necessary travel documents, however, such duty

does not extend to checking the veracity of every entry in these documents. JAL could not vouch for the
authenticity of a passport and the correctness of the entries therein. The power to admit or not an alien
into the country is a sovereign act which cannot be interfered with even by JAL. This is not within the
ambit of the contract of carriage entered into by JAL and herein respondents. As such, JAL should not be
faulted
for
the
denial
of
respondents
shore
pass
applications.
In the Respondents claim that petitioner breached its contract of carriage when it failed to explain to the
immigration authorities that they had overnight vouchers at the Hotel Nikko Narita. They imputed that JAL
did not exhaust all means to prevent the denial of their shore pass entry applications. JAL or any of its
representatives have no authority to interfere with or influence the immigration authorities. The most that
could be expected of JAL is to endorse respondents applications, which Mrs. Higuchi did immediately
upon
their
arrival
in
Narita.
Moral damages may be recovered in cases where one willfully causes injury to property, or in cases of
breach of contract where the other party acts fraudulently or in bad faith. Exemplary damages are
imposed by way of example or correction for the public good, when the party to a contract acts in wanton,
fraudulent, oppressive or malevolent manner. Attorneys fees are allowed when exemplary damages are
awarded and when the party to a suit is compelled to incur expenses to protect his interest.[17] There
being no breach of contract nor proof that JAL acted in wanton, fraudulent or malevolent manner, there is
no
basis
for
the
award
of
any
form
of
damages.
Neither should JAL be held liable to reimburse respondents the amount of US$800.00. It has been
sufficiently proven that the amount pertained to ISC, an agency separate and distinct from JAL, in
payment for the accommodations provided to respondents. The payments did not in any manner accrue
to
the
benefit
of
JAL.
However, we find that the Court of Appeals correctly dismissed JALs counterclaim for litigation expenses,
exemplary damages and attorneys fees. The action was filed by respondents in utmost good faith and
not manifestly frivolous. Respondents honestly believed that JAL breached its contract. A persons right to
litigate should not be penalized by holding him liable for damages. This is especially true when the filing of
the case is to enforce what he believes to be his rightful claim against another although found to be
erroneous.[
WHEREFORE, in view of the foregoing, the instant petition is PARTLY GRANTED. The October 9, 2002
decision of the Court of Appeals and its January 12, 2004 resolution in CA-G.R. CV No. 57440, are
REVERSED and SET ASIDE insofar as the finding of breach on the part of petitioner and the award of
damages, attorneys fees and costs of the suit in favor of respondents is concerned. Accordingly, there
being no breach of contract on the part of petitioner, the award of actual, moral and exemplary damages,
as well as attorneys fees and costs of the suit in favor of respondents Michael and Jeanette Asuncion, is
DELETED for lack of basis. However, the dismissal for lack of merit of petitioners counterclaim for
litigation expenses, exemplary damages and attorneys fees, is SUSTAINED. No pronouncement as to
costs.

Insurance Case Digest: Gaisano Cagayan, Inc. V. Insurance Company Of North America (2006)

G.R. No. 147839

June 8, 2006

Lessons Applicable: Existing Interest (Insurance)

Laws Applicable: Article 1504,Article 1263, Article 2207 of the Civil Code, Section 13 of Insurance
Code
FACTS:
Intercapitol Marketing Corporation (IMC) is the maker of Wrangler Blue Jeans. while Levi Strauss (Phils.)
Inc. (LSPI) is the local distributor of products bearing trademarks owned by Levi Strauss & Co
IMC and LSPI separately obtained from Insurance Company of North America fire insurance policies for
their book debt endorsements related to their ready-made clothing materials which have been sold or
delivered to various customers and dealers of the Insured anywhere in the Philippines which are
unpaid 45 days after the time of the loss
February 25, 1991: Gaisano Superstore Complex in Cagayan de Oro City, owned by Gaisano Cagayan,
Inc., containing the ready-made clothing materials sold and delivered by IMC and LSPI was consumed by
fire.
February 4, 1992: Insurance Company of North America filed a complaint for damages against Gaisano
Cagayan, Inc. alleges that IMC and LSPI filed their claims under their respective fire insurance policies
which it paid thus it was subrogated to their rights
Gaisano Cagayan, Inc: not be held liable because it was destroyed due to fortuities event or force
majeure
RTC: IMC and LSPI retained ownership of the delivered goods until fully paid, it must bear the loss (res
perit domino)
CA: Reversed - sales invoices is an exception under Article 1504 (1) of the Civil Code to res perit domino
ISSUE: W/N Insurance Company of North America can claim against Gaisano Cagayan for the debt that
was
isnured
HELD: YES. petition is partly GRANTED. order to pay P535,613 is DELETED
insurance policy is clear that the subject of the insurance is the book debts and NOT goods sold and
delivered to the customers and dealers of the insured
ART. 1504. Unless otherwise agreed, the goods remain at the seller's risk until the ownership therein is
transferred to the buyer, but when the ownership therein is transferred to the buyer the goods are at the
buyer's risk whether actual delivery has been made or not, except that:
(1) Where delivery of the goods has been made to the buyer or to a bailee for the buyer, in pursuance of
the contract and the ownership in the goods has been retained by the seller merely to secure
performance by the buyer of his obligations under the contract, the goods are at the buyer's risk from the
time of such delivery;
IMC and LSPI did not lose complete interest over the goods. They have an insurable interest until full
payment of the value of the delivered goods. Unlike the civil law concept of res perit domino, where
ownership is the basis for consideration of who bears the risk of loss, in property insurance, one's interest
is not determined by concept of title, but whether insured has substantial economic interest in the property
Section 13 of our Insurance Code defines insurable interest as "every interest in property, whether real or
personal, or any relation thereto, or liability in respect thereof, of such nature that a contemplated peril
might directly damnify the insured." Parenthetically, under Section 14 of the same Code, an insurable
interest in property may consist in: (a) an existing interest; (b) an inchoate interest founded on existing
interest; or (c) an expectancy, coupled with an existing interest in that out of which the expectancy arises.
Anyone has an insurable interest in property who derives a benefit from its existence or would suffer loss
from its destruction.
it is sufficient that the insured is so situated with reference to the property that he would be liable to loss
should it be injured or destroyed by the peril against which it is insured
an insurable interest in property does not necessarily imply a property interest in, or a lien upon, or
possession of, the subject

matter of the insurance, and neither the title nor a beneficial interest is requisite to the existence of such
an interest
insurance in this case is not for loss of goods by fire but for petitioner's accounts with IMC and LSPI that
remained unpaid 45 days after the fire - obligation is pecuniary in nature
obligor should be held exempt from liability when the loss occurs thru a fortuitous event only holds true
when the obligation consists in the delivery of a determinate thing and there is no stipulation holding him
liable even in case of fortuitous event
Article 1263 of the Civil Code in an obligation to deliver a generic thing, the loss or destruction of anything
of the same kind does not extinguish the obligation (Genus nunquan perit)
The subrogation receipt, by itself, is sufficient to establish not only the relationship of respondent as
insurer and IMC as the insured, but also the amount paid to settle the insurance claim
Art. 2207. If the plaintiff's property has been insured, and he has received indemnity from the insurance
company for the injury or loss arising out of the wrong or breach of contract complained of, the insurance
company shall be subrogated to the rights of the insured against the wrongdoer or the person who has
violated the contract.
As to LSPI, no subrogation receipt was offered in evidence.
Failure to substantiate the claim of subrogation is fatal to petitioner's case for recovery of the amount of
P535,613

Obligations and Contracts

G.R. No. 95897 December 14, 1999
FLORENCIA T. HUIBONHOA, petitioner, vs. COURT OF APPEALS, SPOUSES
RUFINA G. LIM AND ANTHONY LIM, LORETA GOJOCCO CHUA AND SPOUSES
SEVERINO AND PRISCILLA GOJOCCO, respondents.
G.R. No. 102604 December 14, 1999
SEVERINO GOJOCCO and LORETA GOJOCCO CHUA, petitioners, vs. COURT OF
APPEALS, HON. HERMOGENES R. LIWAG, as Judge of the RTC of Manila Branch 55
and FLORENCIA HUIBONHOA,respondents.
FACTS:
On June 8, 1983, Florencia T. Huibonhoa (Florencia) entered into a memorandum of
agreement with siblings Rufina Gojocco Lim (Rufina), Severino Gojocco (Severino) and
Loreta Gojocco Chua (Loreta) stipulating that Florencia T. Huibonhoa would lease from them (Gojoccos)
three (3) adjacent commercial lots at Ilaya Street, Binondo, Manila.
On June 30, 1983, pursuant to the memorandum of agreement, the parties inked a
contract of lease of the same three lots.

TERMS OF THE
CONTRACT:
Goodwill money: P900,000 (P300,000/each)
Lesee shall pay P15,000/month to each lessor (P45,000/month) for the leased
premises, within the first 5 days of each month.
Lessee was given an eight-month period to construct the building; after eight
months, the rent payment will accrue. NOTE: During the period of construction, no
monthly rental shall be collected from the Lessee.

 Lease Period: Fifteen (15) Years (Renewable upon agreement)

Lessee will construct a four storey building
Lessee can sublease.
Lessee will determine all the amount collected as rent and it will belong to
lessee.
An increase in the rentals of the sub-lease will be the basis for the percentage
increase of monthly rental that lessee will have to pay lessors.
Upon the termination of the lease, the ownership and title to the building on
the lots would automatically transfer to the lessor, even without any implementing
document.
Real estate taxes on the land lessor, Taxes on the building lessee, but the
lessee was authorized to advance the money needed to meet the lessors obligations such as the
payment of real estate taxes on their lots. The lessors would deduct from the monthly rental due all such
advances made by the lessee.
After the execution of the contract, the Gojoccos executed a power of attorney granting
Huibonhoa the authority to obtain credit facilities in order that the three lots could be
mortgaged for a limited one-year period from July 1983.
On September 12, 1983, Huibonhoa obtained from China Banking Corporation credit
facilities not exceeding One Million (P1,000.000.00) Pesos. Simultaneously, she
mortgaged the three lots to the creditor bank.
[2]
Fifteen days later or on September 27,
1983, to be precise, Huibonhoa signed a contract amending the real estate mortgage in
favor of China Banking Corporation whereby the credit facilities were increased to the
principal sum of Three Million (P3,000,000.00) Pesos.
[3]
During the construction of the building which later became known as Poulex
Merchandise Center,
[4]
former Senator Benigno Aquino, Jr. was assassinated. The
incident must have affected the countrys political and economic stability. The
consequent hoarding of construction materials and increase in interest rates allegedly
affected adversely the construction of the building such that Huibonhoa failed to
complete the same within the stipulated eight-month period from July 1, 1983. It was
finished seven months later
Under the contract, Huibonhoa was supposed to start paying rental in March 1984 but she
failed to do so. Consequently, the Gojoccos made several verbal demands upon
Huibonhoa for the payment of rental arrearages and, for her to vacate the leased
premises.
On December 19, 1984, lessors sent lessee a final letter of demand to pay the rental
arrearages and to vacate the leased premises. The former also notified the latter of their
intention to terminate the contract of lease.
On January 3, 1985, Huibonhoa brought an action for reformation of contract alleging
that although there was a meeting of the minds between the parties on the lease contract,
their true intention as to when the monthly rental would accrue was not therein expressed
due to mistake or accident.
On January 14, 1985, the Gojoccos filed for cancellation of lease, ejectment and
collection against Huibonhoa.
On January 31, 1985, Rufina Gojocco Lim entered into an agreement with Huibonhoa to
put an end to the case the former filed. However, there was no record that Rufina
Gojocco Lim was dropped as a defendant, but only Loretta Gojocco Chua and the
Spouses Severino and Priscilla Gojocco filed the memorandum for the defendants in that
case.
Huibonhoas Case RTC Decision: No clear and convincing evidence to justify the

reformation of the lease contract.

Gojoccos Case MTC Decision: granted Huibonhoas prayer that the case be excluded
from the operation of the Rule on Summary Procedure
Republic of the Philippines
Supreme Court
Baguio City
SECOND DIVISION

ASIAN CONSTRUCTION AND

DEVELOPMENT CORPORATION,
Petitioner,

- versus -

G.R. No. 153827

Present:
PUNO, J., Chairperson,*
SANDOVAL-GUTIERREZ,**
CORONA,
AZCUNA, and
GARCIA, JJ.

Promulgated:
PHILIPPINE COMMERCIAL
INTERNATIONAL BANK,
Respondent.

April 25, 2006

x-----------------------------------------------------------------------------------x
DECISION
GARCIA, J.:
In this petition for review under Rule 45 of the Rules of Court, petitioner Asian Construction and
Development Corporation or ASIAKONSTRUKT, seeks the reversal and setting aside of the
decision[1]dated March 15, 2002 and the Resolution[2] dated June 3, 2002 of the Court of Appeals (CA)
in CA-G.R. CV No. 68189. The assailed decision affirm with modification the Summary
Judgment rendered by the Regional Trial Court (RTC) of Makati City in an action for a sum of money
thereat commenced by the herein respondent, Philippine Commercial International Bank (PCIBANK)
against the petitioner, while the challenged resolution denied petitioners motion for reconsideration.
The facts:
On February 24, 1999, in the RTC of Makati City, respondent PCIBANK filed a complaint[3] for a sum of
money with prayer for a writ of preliminary attachment against petitioner ASIAKONSTRUKT. Docketed as
Civil Case No. 99-432, the complaint alleged, inter alia, as follows:
FIRST CAUSE OF ACTION

2.01
On various occasions, ASIAKONSTRUKT obtained U.S. dollar denominated credit
accommodations from PCIBANK in the amount of Four Million Four Hundred Eighty Seven Thousand
U.S. dollars (US$4,487,000.00), exclusive of interests, charges and fees thereon and the cost of
collecting the same. These credit accommodations are covered by the following promissory notes:
xxx xxx xxx
2.02
Prompt and faithful payment of all the foregoing promissory notes was secured by the following
deeds of assignment executed by ASIAKONSTRUKT in favor of PCIBANK:
(a) Deed
of
Assignment
of
Receivables/Contract Proceeds
dated 20
July 1994 where
ASIAKONSTRUKT assigned its receivables from its Contract with the National Power Corporation (NPC)
in the amount of .P54,500,000;
(b) Deed of Assignment of Receivables dated 28 June 1995 where ASIAKONSTRUKT assigned its
receivables from its Contract with the NPC in the amount ofP26,281,000.00;
(c) Deed of Assignment of Receivables dated 28 August 1995 where ASIAKONSTRUKT assigned its
receivables from its Sub-Contract with ABB Power, Inc., in the amount of P43,000,000.00;
(d) Deed of Assignment of Contract Proceeds dated 27 March 1996 where ASIAKONSTRUKT assigned
its receivables from its contracts with PNOC in the aggregate amount of P46,000,000.00; and
(e) Deed of Assignment of Contract Proceeds dated 20 February 1997 where ASIAKONSTRUKT
assigned its receivables from the Ormat Philippines, Inc., in the aggregate amount of US$3,350,000.00;
2.03
All the foregoing deeds of assignments stipulate, among others, the following terms and
conditions:
a)
The assignment is for the purpose of securing payment of the principal amount and the
interests and bank charges accruing thereon, the costs of collecting the same and all other expenses
which PCIBANK may be put in connection with or as an incident of the assignment;
b)
That the assignment secures also any extension or renewal of the credit which is the subject
thereof as any and all other obligations of ASIAKONSTRUKT of whatever kind and nature as appear in
the records of PCIBANK, which ASIAKONSTRUKT accepts as the final and conclusive evidence of such
obligations to PCIBANK, whether contracted before, during or after the constitution of [the assignment
agreement];
c)
That PCIBANK authorizes ASIAKONSTRUKT, at the latters expense, to collect and receive
for [PCIBANK] all the Receivables; and
d)
That ASIAKONSTRUKT shall have no right, and agrees not to use any of the
proceeds of any collections, it being agreed by the parties that [ASIAKONSTRUKT] divests itself of all the
rights, title and interest in said Receivables and the proceeds of the collection received thereon.
2.04
The promissory notes have remained not fully paid despite their having become due and
demandable. Repeated verbal and written demands were made upon ASIAKONSTRUKT, but to no avail.
It has failed and refused, and continues to fail and refuse, to pay its outstanding obligations to PCIBANK;
2.05
As a result of ASIAKONSTRUKTs refusal to pay its outstanding obligations, PCIBANK was
constrained to refer the matter to counsel and thus incur attorneys fees and legal costs.

2.06
The aggregate unpaid obligation of ASIAKONSTRUKT to PCIBANK, as of 31 December 1998,
amounts to US$4,553,446.06, broken down as follows:
Principal US$ 4,067,867.23
Interest US$ 291,263.27
Penalties US$ 194,315.56
TOTAL US$ 4,553,446.06
For its second cause of action, PCIBANK alleged in the same complaint as follows:
SECOND CAUSE OF ACTION
4.02
as a result of the fraudulent acts of ASIAKONSTRUKT, PCIBANK suffered the following
damages, all of which ASIAKONSTRUKT must be held to pay PCIBANK:
4.02.1 Exemplary damages, in the interest of public good and purposes of correction, in the amount of
not less than .P50,000.00;
4.02.2 Attorneys fees in the amount of not less than . P1,800,000.00; and
4.02.3 Costs of suit.
In support of its prayer for a writ of preliminary attachment embodied in the complaint, plaintiff PCIBANK
alleges the following:
3.02
xxx;

ASIAKONSTRUKT is guilty of fraud in contracting the debt, in the performance thereof, or both,

303. PCIBANK agreed to enter into the above-mentioned credit accommodations primarily because of the
existence of the deeds of assignment listed above. However, from telephone inquiries made with
responsible officers of the National Power Corporation, ABB Power, Inc., PNOC and Ormat Philippines,
Inc., PCIBANK was surprised to learn that ASIAKONSTRUKT had long ago collected the contract
proceeds, or portions thereof, which were previously assigned to PCIBANK. However, to date, it has yet
to turn over these proceeds to PCIBANK. Worse, PCIBANK learned that the contract proceeds were used
by ASIAKONSTRUKT for its own purposes clear evidence of fraud, which has deprived PCIBANK of its
security. ASIAKONSTRUKTs unauthorized use of the contract proceeds for its own purposes was
subsequently confirmed by Mr. Napoleon Garcia, Vice President for Finance of ASIAKONSTRUKT, in a
telephone discussion on 12 January 1999 with Ms. Maricel E. Salaveria of PCIBANK. xxx Needless to
say, ASIAKONSTRUKT has fraudulently collected such receivables to the prejudice of PCIBANK.
3.04 it is evident that ASIAKONSTRUKT never had any intention of complying with the deeds of
assignment. ASIAKONSTRUKT only misled PCIBANK into believing that it had sufficient security to
ensure payment of its loan obligations.
3.05 Alternatively, granting, in argumenti gratia, that ASIAKONSTRUKT, at the time it executed the
foregoing deeds of assignment, really intended to abide by their terms and conditions, it nevertheless
committed manifest fraud when it collected the contract proceeds, and instead of remitting them to
PCIBANK, used them for its own purposes.
In an order[4] dated April 13, 1999, the trial court, after receiving ex parte PCIBANKs evidence in support
of its prayer for preliminary attachment, directed the issuance of the desired writ, thus:
WHEREFORE, let a writ of preliminary attachment issue against all the property of defendant not exempt
from execution or so much thereof as may be sufficient to satisfy plaintiffs principal claim of
US$4,553,446.06, representing the alleged unpaid obligation of defendant, inclusive of interest and

penalty charges, as of December 31, 1998, which is equivalent to P174,260,380.72, upon plaintiffs filing
of a bond in an equal amount to answer for all it may sustain by reason of the attachment if the Court
shall finally adjudge that plaintiff was not entitled thereto.
SO ORDERED.
With plaintiff PCIBANK having posted the requisite bond, a writ of preliminary attachment was thereafter
issued by the trial court. Per records, defendant ASIAKONSTRUKT did not file any motion for
the quashal or dissolution of the writ.
Meanwhile, on August 27, 1999, defendant ASIAKONSTRUKT filed its Answer,[5] thereunder making
admissions and denials. Defendant admits, subject to its defenses, the material allegations of the
Complaint as regards its indebtedness to plaintiff PCIBANK and its execution of the various deeds of
assignment enumerated therein. It, however, denies, for lack of knowledge sufficient to form a belief as to
the truth thereof, the averments in the Complaint that it has not paid, despite demands, its due and
demandable obligations, as well as the amounts due the plaintiff as itemized in paragraph 2.06, supra, of
the Complaint. It likewise denies PCIBANKs allegations in the same Complaint in support of its prayer for
a writ of preliminary attachment, particularly its having fraudulently misappropriated for its own use the
contract proceeds/receivables under the contracts mentioned in the several deeds of assignments,
claiming in this respect that it has still remaining receivables from those contracts.
By way of defenses, defendant pleads in its Answer the alleged severe financial and currency crisis which
hit the Philippines in July 1997, which adversely affected and ultimately put it out of business. Defendant
adds that the deeds of assignments it executed in favor of PCIBANK were standard forms proposed by
the bank as pre-condition for the release of the loans and therefore partake of the nature of contracts of
adhesion, leaving the defendant to the alternative of taking it or leaving it. By way of counterclaim,
defendant prayed for an award of P1,000,000.00 as and for attorneys fees and P200,000.00 as litigation
expenses.
On January 24, 2000, plaintiff PCIBANK filed a verified Motion for Summary Judgment,[6] therein
contending that the defenses interposed by the defendant are sham and contrived, that the alleged
financial crisis pleaded in the Answer is not a fortuitous event that would excuse debtors from their loan
obligations, nor is it an exempting circumstance under Article 1262 of the New Civil Code where, as here,
the same is attended by bad faith. In the same motion, PCIBANK also asserts that the deeds of
assignments executed in its favor are not contracts of adhesion, and even if they were, the same are
valid.
To the Motion for Summary Judgment, defendant interposed an Opposition[7] insisting that its Answer
tendered or raised genuine and substantial issues of material facts which require full-blown trial, namely:
1. Whether or not defendant received all or part of the proceeds/receivables due from the contracts
mentioned in the deeds of assignment at the time the complaint was filed;
2. Granting that defendant received those proceeds/receivables, whether or not defendant fraudulently
misappropriated the same;
3. Whether or not defendant is virtually insolvent as a result of the regionwide economic crisis that hit
Asia, causing the Philippine peso to depreciate drastically; and
4. Whether the parties dealt with each other on equal footing with respect to the execution of the deeds of
assignment as to give the defendant an honest opportunity to reject the onerous terms imposed therein.
Significantly, defendant did not append to its aforementioned Opposition any affidavit in support of the
alleged genuine issues of material facts mentioned therein.

Before the pending incident (motion for summary judgment) could be resolved by the trial court, plaintiff
PCIBANK waived its claim for exemplary damages and agreed to reduce its claim for attorneys fees
from P1,800,000.00 to P1,260,000.00, but made it clear that its waiver of exemplary damages and
reduction of attorneys fees are subject to the condition that a full and final disposition of the case is
obtained via summary judgment.
On May 16, 2000, the trial court, acting favorably on PCIBANKs motion for summary judgment, came out
with its Summary Judgment,[8] the decretalportion of which reads:
WHEREFORE, judgment is hereby rendered ordering defendant to pay plaintiff:
1.
the sum of US$4,553,446.06, or its equivalent in Philippine currency at the time of payment,
with interest thereon at the rate of 8.27% per annum from February 24, 1999 until fully paid;
2.
P1,260,000.00 as and for attorneys fees; and
3.
the costs of suit.
SO ORDERED.
Explains the trial court in rendering its Summary Judgment:
A thorough examination of the parties pleadings and their respective stand in the foregoing motion, the
court finds that indeed with defendants admission of the first cause of action there remains no question of
facts in issue. Further, the proffered defenses are worthless, unsubstantial, sham and contrived.
Considering that there is no more issue to be resolved, the court hereby grants plaintiffs Motion and
renders Judgment in favor of the plaintiff against the defendant based on their respective pleadings in
accordance with Section 4, Rule 35 of the Rules of Court.
In time, petitioner went to the CA whereat its appellate recourse was docketed as CA-G.R. CV No.
68189. As stated at the threshold hereof, the CA, in its decision[9] of May 15, 2002, affirmed with
modification the Summary Judgment rendered by the trial court, the modification being as regards the
award for attorneys fees which the CA reduced to P1,000,000.00, to wit:
IN THE LIGHT OF ALL THE FOREGOING, the appeal is PARTIALLY GRANTED. The Decision appealed
from is AFFIRMED with the MODIFICATION THAT THE AWARD FOR ATTORNEYS FEES is reduced
to P1,000,000.00.
SO ORDERED.
With its motion for reconsideration having been denied by the CA in its Resolution[10] of June 3, 2002,
petitioner is now with us via the present recourse, raising the following issues:
I WHETHER OR NOT THERE IS A GENUINE ISSUE AS TO A MATERIAL FACT WHICH RULES OUT
THE PROPRIETY OF A SUMMARY JUDGMENT.
II WHETHER OR NOT THE AWARD OF ATTORNEYS FEES IS EXORBITANT OR UNCONSCIONABLE.
We DENY.
As in the two courts below, it is petitioners posture that summary judgment is improper in this case
because there are genuine issues of fact which have to be threshed out during trial, to wit: (a) whether or
not petitioner was able to collect only a portion of the contract proceeds/receivables it was bound to
deliver, remit and tender to respondent under the several deeds of assignment it executed in favor of the
latter; and (b) whether or not petitioner fraudulently misappropriated and used for its benefit the said
proceeds/receivables. Ergo, so petitioner maintains, genuine triable issues of fact are present in this case,
which thereby precludes rendition of summary judgment.
We are not persuaded.
Under Rule 35 of the 1997 Rules of Procedure, as amended, except as to the amount of damages, when
there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a
matter of law, summary judgment may be allowed.[11] Summary or accelerated judgment is a procedural
technique aimed at weeding out sham claims or defenses at an early stage of litigation thereby avoiding
the expense and loss of time involved in a trial.[12]

Under the Rules, summary judgment is appropriate when there are no genuine issues of fact which call
for the presentation of evidence in a full-blown trial. Even if on their face the pleadings appear to raise
issues, when the affidavits, depositions and admissions show that such issues are not genuine, then
summary judgment as prescribed by the Rules must ensue as a matter of law. The determinative factor,
therefore, in a motion for summary judgment, is the presence or absence of a genuine issue as to any
material fact.
A genuine issue is an issue of fact which requires the presentation of evidence as distinguished from a
sham, fictitious, contrived or false claim. When the facts as pleaded appear uncontested or undisputed,
then there is no real or genuine issue or question as to the facts, and summary judgment is called for. The
party who moves for summary judgment has the burden of demonstrating clearly the absence of any
genuine issue of fact, or that the issue posed in the complaint is patently unsubstantial so as not to
constitute a genuine issue for trial. Trial courts have limited authority to render summary judgments and
may do so only when there is clearly no genuine issue as to any material fact. When the facts as pleaded
by the parties are disputed or contested, proceedings for summary judgment cannot take the place of
trial.[13]
The CA, in its challenged decision, stated and we are in full accord with it:
In the present recourse, the [petitioner] relied not only on the judicial admissions in its pleadings, more
specifically its Answer to the complaint, the testimony of Maricel Salaveria as well as Exhibits A to T3, adduced in evidence by the [respondent], during the hearing on its plea for the issuance, by the Court a
quo, of a writ of preliminary attachment. Significantly, the [petitioner] did not bother filing a motion for the
quashal of the Writ issued by the Court a quo.
It must be borne in mind, too, that the [petitioner] admitted, in its Answer the due execution and
authenticity of the documents appended to the complaint . The [petitioner] did not deny its liability for the
principal amount claimed by the [respondent] in its complaint. The [petitioner] merely alleged, by way of
defenses, that it failed to pay its account because of the region-wide economic crisis that engulfed Asia, in
July, 1997, and the Deeds of Assignment executed by it in favor of the [respondent] were contracts of
adhesion:
xxx xxx xxx
The [petitioner] elaborated on and catalogued its defenses in its Appellants Brief what it believed, as
genuine issues.
(i) Whether or not [petitioner] received all or part of the proceeds/receivables due from the construction
contracts at the time the civil action was filed;
(ii)
Granting that [petitioner] received the proceeds/receivables from the construction contracts,
whether or not [petitioner] fraudulently misappropriated the same;
(iii)
Whether or not [petitioner] had become virtually insolvent as a result of the region-wide
economic crisis that hit Asia, causing the Philippine peso to depreciate dramatically; and
(iv)
Whether or not [respondent] and [petitioner] dealt with each other on equal footing with respect
to the execution of the deeds of assignment of receivables as to give [petitioner] an honest opportunity to
reject the onerous terms imposed on it.
However, the [petitioner] failed to append, to its Opposition to the Motion for Summary
Judgment, Affidavits showing the factual basis for its defenses of extraordinary deflation, including facts,
figures and data showing its financial condition before and after the economic crisis and that the crisis

was the proximate cause of its financial distress. It bears stressing that the [petitioner] was burdened to
demonstrate, by its Affidavits and documentary evidence, that, indeed, the Philippines was engulfed in an
extraordinary deflation of the Philippine Peso and that the same was the proximate cause of the financial
distress, it claimed, it suffered.
xxx xxx xxx
Where, on the basis of the records, inclusive of the pleadings of the parties, and the testimonial and
documentary evidence adduced by the [respondent], supportive of its plea for a writ of preliminary
attachment, the [respondent] had causes of action against the [petitioner], it behooved the [petitioner] to
controvert the same with affidavits/documentary evidence showing a prima facie genuine defense. As the
Appellate Court of Illinois so aptly declared:
The defendant must show that he has a bona fide defense to the action, one which he may be able to
establish. It must be a plausible ground of defense, something fairly arguable and of a substantial
character. This he must show by affidavits or other proof.
The trial court, of course, must determine from the affidavits filed whether the defendant has interposed a
sufficiently good defense to entitle it to defend, but where defendants affidavits present no substantial
triable issues of fact, the court will grant the motion for summary judgment.
xxx xxx xxx
The failure of the [petitioner] to append to its Opposition any Affidavits showing that its defenses were not
contrived or cosmetic to delay judgment created a presumption that the defenses of the [petitioner] were
not offered in good faith and that the same could not be sustained (Unites States versus Fiedler, et al.,
Federal Reported, 2nd, 578).
If, indeed, the [petitioner] believed it that was prevented from complying with its obligations to the
[respondent], under its contracts, it should have interposed a counterclaims for rescission of contracts,
conformably with the pronouncement of our Supreme Court, thus:
xxx xxx xxx
The [petitioner] did not. This only exposed the barrenness of the pose of the [petitioner].
The [petitioner] may have experienced financial difficulties because of the 1997 economic crisis that
ensued in Asia. However, the same does not constitute a valid justification for the [petitioner] to renege on
its obligations to the [respondent]. The [petitioner] cannot even find solace in Articles 1266 and 1267 of
the New Civil Code for, as declared by our Supreme Court:
It is a fundamental rule that contracts, once perfected, bind both contracting parties, and obligations
arising therefrom have the force of law between the parties and should be complied with in good faith. But
the law recognizes exceptions to the principle of the obligatory force of contracts. One exception is laid
down in Article 1266 of the Civil Code, which reads:The debtor in obligations to do shall also be released
when the prestation becomes legally or physically impossible without the fault of the obligor.
Petitioner cannot, however, successfully take refuge in the said article, since it is applicable only to
obligations to do, and not obligations to give. An obligation to do includes all kinds of work or service;
while an obligation to give is a prestation which consists in the delivery of a movable or an immovable
thing in order to create a real right, or for the use of the recipient, or for its simple possession, or in order
to return it to its owner.
xxx xxx xxx

In this case, petitioner wants this Court to believe that the abrupt change in the political climate of the
country after the EDSA Revolution and its poor financial condition rendered the performance of the lease
contract impractical and inimical to the corporate survival of the petitioner. (Philippine National
Construction Corporation versus Court of Appeals, et al., 272 SCRA 183, at pages 191-192, supra)
The [petitioner] even failed to append any Affidavit to its Opposition showing how much it had received
from its construction contracts and how and to whom the said collections had been appended. The
[petitioner] had personal and sole knowledge of the aforesaid particulars while the [respondent] did not.
In fine, we rule and so hold that the CA did not commit any reversible error in affirming the summary
judgment rendered by the trial court as, at bottom, there existed no genuine issue as to any material fact.
We also sustain the CAs reduction in the award of attorneys fees to only P1,000,000.00, given the fact
that there was no full-blown trial.
WHEREFORE, the assailed CA decision is AFFIRMED in toto and this petition is DENIED for lack of
merit.
Costs against petitioner.
SO ORDERED.