Bernardo Construction v.

CA

Facts:
-In 1990, the municipal government of San Antonio, Nueva Ecija approved the construction of the San
Antonio Public Market.
-Petitioners claim that entered into a business venture for the purpose of participating in the bidding for the
market.
-Later on, JL Bernardo Construction, thru petitioner Sugay, submitted its bid together with other bidders. The
petitioners won the bidding.
- A construction agreement was entered into by the Municipality and petitioner JL Bernardo Construction.
- Petitioners claim that under this Agreement, the Municipality agreed to assume the expenses for the
demolition, clearing and site filling of the construction site in the amount of P1.1M, in addition, to provide
cash equity of P767K.
- Petitioners allege that the Municipality refused to pay the same despite repeated demands and despite that
the public market was more than 98% complete. Furthermore, petitioners maintain that Mayor Salonga
induced them to advance the expenses for the demolition, clearing and site filling work by making false
representations that the Municipality had the financial capability to pay later.
- In 1991, JL Bernardo Construction, Sugay and Erana filed a complaint for breach of contract, specific
performance and collection of a sum of money against the Municipality and Salonga
- The RTC issued a writ of preliminary attachment and granted JL Bernanrdo to maintain possession of the
market and operate it. The Court gave credence to the petitioners claim that defendants were guilty of
fraud by false representation.
- With regards to the contractor’s lien, the Court held that petitioners stand in the position of an unpaid
contractor and as such are entitled to Art 2242 and Art 2243 of the CC in the amount of P2.6M excluding
the other claim damages, atty fees and litigation expenses.
- Defendants moved for MR.
- Respondent Salonga filed motion for the approval of his counterbond.
- During the pendency of his motion, respondent Salonga filed with CA a petitioner for certiorari under
Rule 65.
- CA reversed the RTC decision and ruled in favor of Salonga. The CA reasoned that since the Construction
Agreement was only between Juanito Bernardo and the Municpality of San Antonio, and since there is no
sworn statement by Juanito Bernardo alleging that he had been misled by Mayor Salonga, it is apparent
that the applicant has not proven the defendants are guilty of fruad.
- The filing of a motion for the approval of counter bond by defendants did not render the petition for
certiorari premature. Such motion could not cure the defect in the issuance of the writ of attachment.
- As to the contractor’s lien, the CA ruled that Art 2242 finds application only in insolvency proceedings.
- Hence, this appeal.
Issue:
1) WON the CA correctly assumed jurisdiction over the petition for certioarari filed by respondents herein
assailing the trial court’s interlocutory orders granting the writ of attachment and the contractor’s lien
(NO)
2) WON the CA committed reversible errors of law in its decision (NO)

Held:
(1)

-A petition for certiorari may be filed in case a tribunal, board or officer exercising judicial or quasi-
judicial functions has acted without or in excess of jurisdiction or with grave abuse of discretion amounting
to lack or excess of jurisdiction and there is no appeal, or any plain, speedy remedy.
-As a general rule, an interlocutory order is not appealable until after the rendition of the judgment
on the merits for a contrary rule would delay the administration of justice and burden the courts. However,
the Courts have held that certiorari is an appropriate remedy to assail an interlocutory order (1) when the
tribunal issues such order without or in excess of jurisdiction, or with grave abuse of discretion and (2) when
the assailed interlocutory is patently erroneous and the remedy of appeal would not afford adequate and
expedition relief
-We hold that the petition for certiorari filed by Salonga and Municpality with CA should not have
been given due course for they still had recourse to a plain, speedy and adequate remedy— the filing of a
motion to fix the counterbond, which they in fact filed with the court.

(2)
- However, with regards to the contractor’s lien, we uphold the CA reversing the trial court’s
decision.
-Art 2241 and 2242 CC enumerates certain credits which enjoy preference. Specifically, the
contractor’s lien claimed by petitioners is granted under Art 2242.
-However, Art 2242 only finds application when there is a concurrence of credits. In such situation,
the question of preference will arise, that is, there will be a need to determine which of the creditors will be
paid ahead.
-This is made explicit by Article 2243 which states that the claims and liens enumerated in art 2241
and 2242 shall be considered as mortgages or pledges of real or personal property or liens.
-The action filed by petitioners does not partake of the nature of an insolvency proceeding. It is
basically for specific performance and damages. Thus, even if is finally adjudicated that petitioners stand in
the position of unpaid contractors, such lien cannot be enforced for there is no way of determining whether
or not there exist other preferred creditors with claims over the San Antonio Public Market.

-Clearly, the trial court’s order granting possession and use of public market to petitioners is void.
We uphold the CA decision as it nullifies the contractors lien and also uphold the CA nullification of the trial
court’s order approving the guidelines for the operation of the Public Market.