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G.R. No. 205007 - THE MERCANTILE INSURANCE CO., INC., PETITIONER, v. DMCI-
ChanRobles On-Line Bar Review LAING CONSTRUCTION, INC.,° RESPONDENT:
G.R. No. 205007 - THE MERCANTILE INSURANCE CO., INC., PETITIONER, v. DMCI-
LAING CONSTRUCTION, INC.,° RESPONDENT
SECOND DIVISION
DECISION
This is a petition for review on certiorari1 (Petition) under Rule 45 of the Rules of Court
assailing the Decision2 dated July 30, 2012 (Assailed Decision) and Resolution3 dated
January 7, 2013 (Assailed Resolution) rendered by the Court of Appeals (CA) in CA-
G.R. SP. No. 80705.
The Assailed Decision and Resolution reverse the Decision4 promulgated on November
7, 2003 issued by the Construction Industry Arbitration Commission (CIAC) Arbitral
Tribunal (Tribunal) in CIAC Case No. 10-2003 which, in turn, dismissed the claim filed
by respondent DMCI Laing Construction, Inc. (DLCI) against Altech Fabrication
Industries, Inc. (Altech) and petitioner The Mercantile Insurance Co., Inc. (Mercantile).
The Facts
MICHELLE BAUTISTA Y DELA CRUZ, subject of their Sub-Contract in its Letter6 addressed to Altech's President and General
ACCUSED, ANTHONY CHAVEZ Y Manager, Nicanor Peña:
VILLAREAL @ ESTONG, ACCUSED-
APPELLANT.
[W]e detail below a programme status report of your installation works-
G.R. Nos. 234789-91 - FELICITAS
D. NACINO, HELEN E. RAMACULA, Panel installation at Rockwell as [of] [November 7, 1998]
AND THE VOLUNTEERS AGAINST
CRIME AND CORRUPTION, INC.,
PETITIONERS, v. THE OFFICE OF THE
Total Actual Actual
OMBUDSMAN, REPRESENTED BY
Planned Planned
OMBUDSMAN CONCHITA CARPIO-
MORALES, BENIGNO SIMEON C. Panels % No % No
AQUINO III, ALAN LM. PURISIMA,
Hidalgo 4623 75% 3406 14% 664
AND GETULIO P. NAPEÑAS,
RESPONDENTS. Rizal 4830 60% 2919 5% 264
G.R. No. 240311 - PHILIPPINE Luna 3100 36% 1110 NIL NIL
G.R. No. 230356 - PEOPLE OF THE DLCI was constrained, in several instances, to undertake the completion and
PHILIPPINES, APPELLEE, v. ERIC rectification of unfinished and sub-par works to avert further delay. DLCI apprised
VARGAS Y JAGUARIN AND GINA Altech of these instances, as well as its intention to charge the corresponding costs
BAGACINA, ACCUSED, ERIC VARGAS against Altech's account.8
Y JAGUARIN, ACCUSED-APPELLANT
G.R. No. 208480 - REPUBLIC OF Performance Bond, but did not indicate the exact amount claimed.13
INDIGENOUS PEOPLES, REGISTER OF its bank: due to financial difficulties.14 Nevertheless, Altech assured DLCI that it "
DEEDS OF BAGUIO CITY, LAND [would] continue to provide [its] whole hearted support in terms of the logistical needs
REGISTRATION AUTHORITY, HEIRS of the [P]roject."15
OF COSEN PIRASO, REPRESENTED BY
RICHARD A. ACOP, HEIRS OF On February 21, 2000, DLCI terminated its Sub-Contract with Altech effective
JOSEPHINE MOLINTAS ABANAG, immediately. The Termination Letter reads, in part:
REPRESENTED BY ISAIAS M. ABANAG,
MARION T. POOL, JOAN L. GORIO,
AND VIRGINIA C. GAO-AN, This termination is due to [Altech's] failure x x x to perform in accordance
RESPONDENTS with the agreed terms of the sub-contract stipulated in the Notice of Award
as well as in the documents referred to therein such as, but not limited to,
G.R. No. 238457 - PEOPLE OF THE the [Sub-Contract]. Despite numerous written communications from
PHILIPPINES, PLAINTIFF-APPELLEE, v. us, [Altech has] failed to proceed with the sub-contract works with
JOJO BACYAAN Y SABANIYA, RONNIE due diligence and [has] consistently failed to meet the required
FERNANDEZ Y GONZALES, AND RYAN quality standards. Furthermore, [Altech has], by [its] own admission,
GUEVARRA Y SIPRIA, ACCUSED- entered into a deed of arrangement with its creditors in which it
APPELLANTS surrendered its major assets to the latter. The aforementioned acts are
clearly events of default falling under [Paragraph] 17 of the [Sub-Contract]
PETITIONERS, v. SHERIFF JANET YAP- formally take-over the same. We invite you to send your representatives to
BANK, RESPONDENTS
We reserve the right to claim from [Altech] reimbursement of all
G.R. No. 244274 - NORMAN costs, as well as compensation for all damages, arising from
CORDERO MARQUEZ, PETITIONER, v. [Altech's] default, including but not limited to costs of both direct
COMMISSION ON ELECTIONS, and consequential delays. Likewise, we reserve the right to claim
RESPONDENT the refund of any payment which, after a review of your
accomplishment and records, may be found to have been not due or
G.R. No. 222710 - PHILIPPINE wrongly paid to [Altech].16 (Emphasis supplied)
HEALTH INSURANCE CORPORATION,
PETITIONER, v. COMMISSION ON
AUDIT, CHAIRPERSON MICHAEL G. Subsequently, Mercantile advised DLCI that it had referred its demand to Altech for
AGUINALDO, DIRECTOR JOSEPH B. appropriate action through its Letter17 dated March 13, 2000. On March 28, 2000,
ANACAY AND SUPERVISING AUDITOR Mercantile advised DLCI that since Altech had informed them that negotiations were
ELENA L. AGUSTIN, RESPONDENTS underway for an amicable settlement, they would hold further evaluation of DLCI's
claim in abeyance "to give enough elbow room to [Altech] to settle [the claim] on [its]
G.R. No. 240873 - SOLICITOR own."18
GENERAL JOSE C. CALIDA, MILAGROS
O. CALIDA, JOSEF CALIDA, MICHELLE After negotiations between DLCI and Altech fell through, DLCI reiterated its demand for
CALIDA, AND MARK JOREL CALIDA,
liquidation on November 28, 2000.19
PETITIONERS, v. SENATOR ANTONIO
"SONNY" TRILLANES IV, THE
Mercantile denied DLCI's claim on February 26, 2001 on the ground that the
COMMITTEE ON ACCOUNTABILITY OF
Performance Bond expired on March 5, 2000.20
PUBLIC OFFICERS AND
INVESTIGATIONS (BLUE RIBBON
Aggrieved, DLCI filed a complaint against Altech and Mercantile before the CIAC (CIAC
COMMITTEE), AND THE COMMITTEE
ON CIVIL SERVICE, GOVERNMENT Complaint) on May 29, 2003,21 seeking to collect the sum of Php31,618,494.81
REORGANIZATION, AND representing the costs it allegedly incurred to complete the sub-contracted works, with
ORLANDO C. PELARES, MARLON A. writing with the other party to the Sub-Contractor. The demand for
ALERTA and EXPEDITO A. SOLIVAR, arbitration shall be made within a reasonable time after the dispute has
Petitioners, vs. SILVERIO J. NAVARRO, arisen and attempts to settle amicably have failed. In no case, however,
EDUARDOCRISTOBAL, REYNALDO shall the demand be made later than the time of final payment, except as
under the Performance Bond pursuant to Article 2080 of the Civil Code,30 since DLCI's
G.R. No. 234273 - PEOPLE OF THE delay had deprived it of the opportunity to exercise its right of subrogation against
PHILIPPINES, PLAINTIFF-APPELLEE, v.
Altech.31 It held:
EMALYN N. MORENO, ACCUSED-
APPELLANT
It is not controverted that when [DLCI] filed its claim with CIAC on [May 29,
G.R. No. 224511 - EXCHANGE 2003], [Altech] could no longer be found and efforts to serve it with the
CAPITAL CORPORATION, PETITIONER, letter request for arbitration proved futile. As already held x x x [DLCI] is
v. BANK OF COMMERCE AND found guilty of inexcusable delay in filing this claim for arbitration. The
BANCAPITAL DEVELOPMENT consequence of this delay is to deprive [Mercantile] of its right to go after
CORPORATION, RESPONDENTS [Altech] on a cross-claim in this suit. This surely deprives [Mercantile] of its
right of subrogation against Altech as [i]ndemnitor in the Performance
G.R. No. 227993 - PEOPLE OF THE Bond. x x x [I]n accordance with the provisions of Article 2080 x x x
PHILIPPINES, PLAINTIFF-APPELLEE, v. [Mercantile] is "released from its obligation" under the [P]erformance
BENSON TULOD Y CUARTE, ACCUSED- [B]ond.32
APPELLANT
G.R. No. 232380 - PEOPLE OF THE The Tribunal also ruled that DLCI's First Call was not a valid demand since it did not
PHILIPPINES, PLAINTIFF-APPELLEE, V. indicate the specific amount DLCI sought to recover from Mercantile.33 Consequently,
RONALD JAURIGUE @ "RON-RON" the Tribunal concluded that DLCI's claim is already barred, since the Performance Bond
A.K.A. RONALDO VICENTE Y had already expired two (2) years before DLCI finally ascertained the total amount of
JAURIGUE, ACCUSED-APPELLANT its claim.34
G.R. No. 205805 - SIMEONA, In addition, the Tribunal found the termination of the Sub-Contract unjustified, as
GLORIA AND RODOLFO (ALL DLCI's own Project Financial Manager John O'Connor admitted that Altech achieved
SURNAMED PRESCILLA), ARMENTINA 95% accomplishment as of the month of termination. According to the Tribunal, 95%
PRESCILLA-PERDES, HERMINIA work accomplishment qualifies as substantial completion under the Uniform General
PRESCILLA-CARANDANG, ZENAIDA Conditions of Contract for Private Construction prescribed by the Construction Industry
PRESCILLA-MANUEL AND YOLANDA
Authority of the Philippines (CIAP) in CIAP Document 102.35
PRESCILLA-MARCIANO, PETITIONERS,
v. CONRADO O. LASQUITE AND
In any case, the Tribunal held that DLCI is not entitled to reimbursement for costs it
JUANITO L. ANDRADE, RESPONDENTS
had incurred in order to complete the Project, since its claims consist of expenses
incurred after the unilateral termination of the Sub-Contract; it emphasized that the
G.R. No. 217755 - ELMER
term "cost to complete" assumes a definite meaning in the const1uction industry, and
MONTERO, PETITIONER, v. SANTIAGO
relates to "the right of the owner (or in this case, the main contractor) to collect
MONTERO, JR. AND CHARLIE
damages against the contractor (in this case, the sub-contractor) for the latter's failure
MONTERO, RESPONDENTS
to complete the work as stipulated, prompting the former to take-over the project and
PANES, EDGAR T. SALVOSA, continued after the termination of the Sub-Contract, and that DLCI served its final
BENJAMIN T. SALVOSA AND SONIA I. written demand38 upon Altech and Mercantile on January 20, 2003. A meeting between
MENDOZA, HEIRS OF RAFAEL DLCI and Mercantile's representatives followed on .January 27, 2003, where said
TOLENTINO, NAMELY: LEAH T. parties mutually agreed that attempts to arrive at an amicable settlement have
BAENA, RENE ANGEL TOLENTINO AND failed.39
ROBERT TOLENTINO, PETITIONERS,
v. HEIRS OF RAMON TOLENTINO, Considering the foregoing, the CA ruled that the filing of the CIAC Complaint four (4)
NAMELY: MARILOU T. LOIUE,
months later, or on May 29, 2003, was done within a reasonable time.40
ANTONIO I. TOLENTINO, ELSA T.
CALAUSTRO, DOLORES T.
The CA further held that Mercantile cannot invoke laches to evade liability in this case
TOLENTINO, JOCELYN T. DURAN,
since the CIAC Complaint was brought within the prescriptive period of ten (10) years
TERESITA T. THOMAS, SUSAN T.
for filing an action upon a written contract (i.e., the Performance Bond),41 inasmuch as
CLASIO AND REMIGIO MANCHUS,
DLCI's right of action only arose on January 27, 2003, when negotiations between the
RESPONDENTS
parties ceased.
A.C. No. 12019 - JOSE ANTONIO G. its failure to reflect the specific amount claimed. While DLCI's exact monetary claim
GABUCAN, COMPLAINANT, V. ATTY. was still undetermined at the time of the First Call, it was already understood, by the
FLORENCIO A. NARIDO, JR., terms of the Performance Bond, that such amount would not exceed
RESPONDENT Php90,448,941.60.43 In addition, the CA ruled that Mercantile cannot escape its
liability under the Performance Bond due to its alleged expiration, considering that it
G.R. No. 242213 - PEOPLE OF THE was Mercantile's own inaction which delayed the evaluation of DLCI's claim.44
PHILIPPINES, PLAINTIFF-APPELLEE, v.
ROGER ENERO, ACCUSED-APPELLANT Further, the CA ruled that the termination of the Sub-Contract was justified by Altech's
consistent delay and poor workmanship, regardless of the level of its accomplishment
G.R. No. 202851 - FEATI
at the time of termination.45 As a result, Mercantile is liable for the costs of completion
UNIVERSITY, PETITIONER, v.
claimed by DLCI having guaranteed the full and faithful compliance of Altech's
ANTOLIN PANGAN, RESPONDENT
obligations under the Sub-Contract.46
On January 17, 2013, Mercantile filed a Motion for Extension of Time49 praying that it
G.R. No. 242413 - THE PEOPLE OF
be granted a period of thirty (30) days, or until February 24, 201350 to file its Petition,
THE PHILIPPINES, PLAINTIFF-
APPELLEE, v. WENNIE PESPENIAN, which the Court granted.51
ACCUSED-APPELLANT
Mercantile filed the present Petition on February 20, 2013.52
G.R. No. 219673 - SOLID HOMES,
INC., PETITIONER, v. SPOUSES The Court directed DLCI to file its comment on the Petition in its Resolution53 dated
ARTEMIO JURADO AND CONSUELO O. March 18, 2013.
JURADO, RESPONDENTS
DLCI filed its Comment54 on July 2, 2013, to which Mercantile filed its Reply.55
G.R. No. 206795 - FOODBEV
INTERNATIONAL AND LUCILA S. DELA
The Issue
CRUZ, PETITIONERS, v. NOLI C.
FERRER, JEVER BELARDO, FELIX
The Court is called upon to determine whether the CA erred when it directed Mercantile
GALELA, ROMEO SISCAR, MICHAEL
to pay DLCI the sum of Php31,618,494.81 on the basis of the Performance Bond, with
BALDESCO, RICO ACADEMIA,
stipulated interest at the rate of 2% per month.
EDUARDO DELA CRUZ, RYAN AQUINO,
GAUDENCIO PARIO, MARK TRAPAGO,
The Court's Ruling
MAIR GOMEZ, NAGKAKAISANG
MANGGAGAWA NG FOODBEV
The Petition is denied for lack of merit. The Assailed Decision and Resolution are
INTERNATIONAL, RICHARD EROLES
affirmed, with modification.
AND BERNADETTE BELARDO,
RESPONDENTS
The CIAC Complaint was timely filed.
G.R. No. 242570 - PHILIPPINE By these terms, Mercantile obligated itself to pay DLCI immediately upon demand,
notwithstanding any dispute as to the fulfillment of Altech's obligations under the Sub-
NATIONAL BANK, PETITIONER, v.
Contract. The Performance Bond thus stands as a contract of surety contemplated
ELENITA V. ABELLO, MA. ELENA
under Article 2047 of the Civil Code which states:
ELIZABETH A. FIDER, JONATHAN V.
ABELLO, MANUEL V. ABELLO, JR. AND
VINCENT EDWARD V. ABELLO, ART. 2047. By guaranty a person, called the guarantor, binds himself to the
RESPONDENTS creditor to fulfill the obligation of the principal debtor in case the latter
should fail to do so.
A.M. No. RTJ-11-2281 (Formerly
OCA IPI- 10-3372-RTJ) - ATTY.
MARSHA B. ESTURAS, COMPLAINANT, If a person binds himself solidarily with the principal debtor, the
v. JUDGE AGAPITO S. LU, REGIONAL provisions of Section 4, Chapter 3, Title I of this Book60shall be
TRIAL COURT, BRANCH 88, CAVITE observed. In such case the contract is called a suretyship. (Emphasis
CITY, RESPONDENT supplied)
EDGARDO GARCIA Y ANCHETA, performance by another party, called the principal or obligor, of an obligation or
ACCUSED-APPELLANT undertaking in favor of another party, called the obligee.61 As a result, the surety is
considered in law as being the same party as the debtor in relation to whatever is
G.R. No. 217448 - ELENA A. adjudged touching upon the obligation of the latter, and their liabilities are interwoven
ESTALILLA, PETITIONER, v. as to be inseparable.62
COMMISSION ON AUDIT,
RESPONDENT While the contract of surety stands secondary to the principal obligation, the surety's
liability is direct, primary and absolute, albeit limited to the amount for which the
G.R. No. 217837 - MR HOLDINGS,
contract of surety is issued.63 The surety's liability attaches the moment a demand for
INC. AND MARCOPPER MINING
payment is made by the creditor. The Court's ruling in Trade and Investment
CORPORATION, PETITIONERS, v.
Development Corporation of the Philippines v. Asia Paces Corporation64 lends
ROLANDO A. DE JESUS, IN HIS
guidance:
OFFICIAL CAPACITY AS THE OFFICER-
IN-CHARGE (OIC)-REGIONAL
DIRECTOR, MINES AND x x x [S]ince the surety is a solidary debtor, it is not necessary that
GEOSCIENCES - BUREAU (MGB), the original debtor first failed to pay before the surety could be
REGION IV-B (MIMAROPA) AND made liable; it is enough that a demand for payment is made by the
VICENTE S. PARAGAS, CESO III, IN creditor for the surety's liability to attach. Article 1216 of the Civil
HIS OFFICIAL CAPACITY AS THE Code provides that:
REGIONAL EXECUTIVE DIRECTOR,
Article 1216. The creditor may proceed against any one of the
DENR REGION IV-B (MIMAROPA),
solidary debtors or some or all of them simultaneously.
RESPONDENTS
unknown to the parties.66 Thus, the Performance Bond is one that is callable on
G.R. No. 233556 - CITY TREASURER demand, wherein mere demand triggers Mercantile's obligation (as surety) to
OF MANILA, PETITIONER, v. indemnify DLCI (the obligee) the amount for which said bond was issued, that is,
PHILIPPINE BEVERAGE PARTNERS,
Php90,448,941.60.67
INC., SUBSTITUTED BY COCA-COLA
BOTTLERS PHILIPPINES,
Accordingly, the requirement of "first demand" in this case should be understood in
RESPONDENT
light of Article 1169,68 wherein the obligee is deemed to be in delay upon judicial or
extra-judicial demand. Clearly, Mercantile's liability became due upon its receipt of the
G.R. No. 201396 - YUSHI KONDO,
First Call.
PETITIONER, v. TOYOTA BOSHOKU
(PHILS.) CORPORATION, MAMORU
In this respect, DLCI's alleged failure to state the value of its claim is of no moment. As
MATSUNAGA, KAZUKI MIURA, AND
astutely observed by the CA:
JOSELITO LEDESMA, RESPONDENTS
G.R. No. 224039 - DANILO DE x x x [The Tribunal] makes much out of DLCI's failure to state the specific
VILLA Y GUINTO, PETITIONER, v. amount that it is claiming. It must be emphasized that at the time of the
PEOPLE OF THE PHILIPPINES, call on the bond, Mercantile's obligation guaranteeing project completion
RESPONDENT already arose and it is understood that the exact amount, while still
undetermined, shall not exceed the amount of the bond
G.R. No. 223562 - PEOPLE OF THE
[Php90,448,941.60].69
PHILIPINES, PLAINTIFF-APPELLEE, v.
LEAN NOEL DIZON @ "JINGLE",
ACCUSED-APPELLANT The Tribunal appears to have overlooked the fact that the First Call demanded for the
liquidation of the Performance Bond, that is, the payment of the entire amount for
G.R. No. 208892 - SPOUSES which it was issued. Payments made in response to DLCI's demand for liquidation
ANTHONY ROGELIO BERNARDO AND would have then been subject to subsequent adjustment following the final settlement
MA. MARTHA BERNARDO, of Altech and DLCI's respective accounts. This much is clear from the terms of the
PETITIONERS, v. UNION BANK OF THE Performance Bond.70
PHILIPPINES AND THE HON. COURT
OF APPEALS, RESPONDENTS The Performance Bond itself provides that Mercantile's liability is not contingent upon
the determination of the actual amount for which Altech is liable. In the event of an
G.R. No. 224936 - PNOC overpayment, Mercantile can proceed against DLCI based on the principle of unjust
ALTERNATIVE FUELS CORPORATION,
PETITIONER, v. NATIONAL GRID enrichment.71 Any amount subject to reimbursement would then assume the nature of
CORPORATION OF THE PHILIPPINES, a forbearance of money, subject to legal interest.
RESPONDENT
In any case, it bears stressing that Mercantile made no mention of the purported defect
G.R. No. 243589 - PEOPLE OF THE in DLCI's First Call at any time prior to the CIAC proceedings. To recall, Mercantile
PHILIPPINES PLAINTIFF-APPELLEE, v. premised its refusal to evaluate DLCI's claim solely on the pending negotiations
ANDIDATO MAMARINTA AND JACK between DLCI and Altech. Mercantile's objection regarding the validity and
BATUAN ACCUSED-APPELLANTS completeness of the First Call, which it belatedly raised during the CIAC proceedings,
appears to have been an afterthought.
G.R. No. 241324 - PEOPLE OF THE
PHILIPPINES, PLAINTIFF-APPELLEE, v. For these reasons, the Court finds Mercantile's refusal to evaluate DLCI's claim
MARIVIC COHAYCO Y REVIL @ unjustified.
"KAKANG," ACCUSED-APPELLANT
In turn, the general conditions of the Sub-Contract between DLCI and Altech provide:
G.R. No. 224584 - THE PEOPLE OF
THE PHILIPPINES, PLAINTIFF-
APPELLEE, v. ZZZ, ACCUSED- 6. Commencement [and] Completion
APPELLANT
xxxx
xxxx
G.R. No. 203382 - PEDRO S.
CUERPO, SALVADOR SIMBULAN AND (3) [DLCI] may in lieu of giving a notice of termination x x x
FERNANDO H. ROÑO, PETITIONERS, take part only of the Sub-Contract Works out of the hands of
v. PEOPLE OF THE PHILIPPINES [Altech] and may[,] by himself, his servants or agents execute
RESPONDENT such part and in such event [DLCI] may recover his reasonable
costs of so doing from [Altech], or deduct such costs from
G.R. No. 237172 - MARIO JOEL T.
monies otherwise becoming due to [Altech].73 (Emphasis
REYES, PETITIONER, v. PEOPLE OF
supplied; italics omitted)
THE PHILIPPINES, RESPONDENT
G.R. No. 243386 - PEOPLE OF THE The records show that Altech failed to accomplish its work in a timely and satisfactory
PHILIPPINES, PLAINTIFF-APPELLEE, v. manner. This is apparent from the correspondences,74 which DLCI submitted as
HILARIO DE CASTRO Y SANTOS ALIAS evidence. Mercantile had the full opportunity to contest the truthfulness and veracity of
"DACOY," ACCUSED-APPELLANT these correspondences and the matters to which they pertain. Instead of doing so,
Mercantile merely argued that DLCI's failure to "pray for Liquidated Damages and Cost
G.R. No 210105 - LAND BANK OF
for Rectification of work" belies its claim of delay and poor workmanship.75
THE PHILIPPINES, PETITIONER, v. MA.
AURORA [RITA] DEL ROSARIO AND
Mercantile's undue reliance on nomenclature does not support its cause. To recall, the
IRENE DEL ROSARIO, RESPONDENTS
CIAC Complaint prayed for the payment of costs incurred to complete the sub-contract
works.76 These costs represent those incurred as a consequence of Altech's delay and
G.R. No. 217910 - JESUS NICARDO
poor workmanship. Verily, these costs are chargeable against the Performance Bond,
M. FALCIS, III, PETITIONER, v. CIVIL
inasmuch as the latter stands as a guarantee for Altech's full and faithful compliance
REGISTRAR GENERAL, RESPONDENT.;
LGBTS CHRISTIAN CHURCH, INC., with the Sub-Contract.
REVEREND CRESENCIO "CEEJAY"
AGBAYANI, JR., MARLON FELIPE, AND Mercantile further attempts to evade liability on the Performance Bond by drawing a
MARIA ARLYN "SUGAR" IBAÑEZ, distinction between first, costs incurred before and after termination of the Sub-
PETITIONERS-IN-INTERVENTION.; Contract and also, between costs incurred to complete the project and those which are
ATTY. FERNANDO P. PERITO, ATTY. claimed due to overpayment. However, these distinctions are irrelevant to Mercantile's
RONALDO T. REYES, ATTY. JEREMY I. liability under the Performance Bond.
GATDULA, ATTY. CRISTINA A.
MONTES, AND ATTY. RUFINO At the risk of being repetitive, Mercantile's Performance Bond guarantees Altech's full
POLICARPIO III, INTERVENORS- and faithful compliance with the Sub-Contract. Accordingly, the scope of the
OPPOSITORS Performance Bond should be understood to cover all costs incurred by DLCI as a result
of Altech's failure to comply with its obligations under said agreement. To limit the
G.R. No. 244806 - AMANDO M. scope of the Performance Bond only to costs incurred before termination of the Sub-
TETANGCO, JR., ARMANDO L. Contract would be to create an additional condition for recovery which does not appear
SURATOS, JUAN D. ZUNIGA, JR., on the face of the Performance Bond. To stress, Mercantile's liability is conditioned only
ANTONIO A. BERNARDO, JR., upon DLCI's first demand, "notwithstanding any dispute to the effect that the principal
VICTORIA C. BERCILES, TERESA T. has fulfilled its contractual obligation [or] the amount demanded."77
MANGILA, AND MA. CECILIA N.
MARTIN, PETITIONERS, v. It is likewise erroneous for Mercantile to argue that DLCI's claim is a mere request for
COMMISSION ON AUDIT, reimbursement for overpayment which falls outside of the scope of the Performance
RESPONDENTS Bond.
A.M. No. MTJ-17-1889 [Formerly Reference to DLCI's breakdown of claims is proper, thus:
OCA IPI No. 16-2822-MTJ] - RE:
ANONYMOUS COMPLAINT AGAINST
PRESIDING JUDGE ANALIE C. ALDEA- 1. Total sub-
AROCENA, MUNICIPAL TRIAL COURT contract
IN CITIES, BRANCH 1, SAN JOSE amount
CITY, NUEVA ECIJA
Aluminum works
VARONA, RESPONDENTS-IN-
Interest expense80
INTERVENTION;APRIL D. CABALLERO,
JEREY C. CASTARDO, MC WELLROE P.
Payment to Fuji Reynolds81
BRINGAS, RHUFFY D. FEDERE,
CONRAD THEODORE A. MATUTINO Payment to J.A. Shillinglaw82
AND NUMEROUS OTHERS SIMILARLY
Contra-charges83 ___1,236,609.26______________
SITUATED, ST. THOMAS MORE
SCHOOL OF LAW AND BUSINESS,
INC., REPRESENTED BY ITS
PRESIDENT RODOLFO C. RAPISTA,
FOR HIMSELF AND AS FOUNDER,
DEAN AND PROFESSOR, OF THE 4. Total
COLLEGE OF LAW, JUDY MARIE amount
RAPISTA-TAN, LYNNART WALFORD A. paid by
TAN, IAN M. ENTERINA, NEIL JOHN DLCI to
VILLARICO AS LAW PROFESSORS AND Altech
AS CONCERNED CITIZENS,
Measured worli:s less charges 297,
PETITIONERS-INTERVENORS; G.R.
No. 242954 - FRANCIS JOSE LEAN L. Additional works/dollar fluctuation ___74,221,471.20______________
ABAYATA,GRETCHENM. VASQUEZ,
SHEENAH S. ILUSTRISMO, RALPH
LOUIE SALAÑO, AIREEN MONICA B.
GUZMAN, DELFINO ODIAS, DARYL
DELA CRUZ, CLAIRE SUICO, AIVIE S.
Balance currently remaining on Altech's estimated
PESCADERO, NIÑA CHRISTINE DELA
final account
PAZ, SHEMARK K. QUENIAHAN, AL
JAY T. MEJOS, ROCELLYN L. DAÑO,
MICHAEL ADOLFO, RONALD A. ATIG,
5. Future
LYNNETTE C. LUMAYAG, MARY CHRIS
support/DLCI ________________________________________
LAGERA, TIMOTHY B. FRANCISCO,
liabilities84
SHEILA MARIE C. DANDAN, MADELINE
C. DELA PEÑA, DARLIN R. VILLAMOR,
LORENZANA L. LLORICO, AND JAN
IVAN M. SANTAMARIA, PETITIONERS,
v. HON. SALVADOR MEDIALDEA,
Retention
EXECUTIVE SECRETARY, AND LEGAL
amount
EDUCATION BOARD, HEREIN
earlier
REPRESENTED BY ITS CHAIRPERSON,
withheld
EMERSON B. AQUENDE,
from
RESPONDENTS
Altech85
SOBREMONTE, NICASIO TINAMISAN, DLCI, but again, did not do so. Accordingly, the sum payable, as computed by DLCI,
CRESCENCIANA DE JOYA, FRESCO stands.
CATAPANG, SONNY CATAPANG,
MARIO H. PERNO, CARLITO CAPACIA, Article 2080 of the Civil Code does not
AQUILINA BAUTISTA, FELECITO apply.
BARCELON, LUIS MANGI, BAYANI
ORIONDO, BASILISA DERAIN, In a last ditch effort to escape liability, Mercantile maintains that it should be deemed
GUILLERMO BAUTISTA, BEATRIZ released from its obligations under the Performance Bond as it had been deprived of
SEVILLA, NICOLAS ASAHAN, ROSITA the opportunity to exercise its right of subrogation against Altech due to DLCI's
MERCADO, LAMBERTO BAUTISTA, "inexcusable delay" in filing the CIAC Complaint. Mercantile bases this assertion on
REXIE DINGLES, JOSE QUIROZ, Article 2080 of the Civil Code.
PETITIONERS, v. FIL-ESTATE
PROPERTIES, INC., RESPONDENT. It has already been settled that no delay may be attributed to DLCI with
[G.R. No. 200684] NOLITO G. DEL respect to the filing of the CIAC Complaint. Nevertheless, even if it is assumed, for
MUNDO, GABRIEL A. MAULLON, the sake of argument, that DLCI was in fact guilty of inexcusable delay, Mercantile's
MARIA L. TENORIO, NOEL G. DEL argument still fails.
MUNDO, RACQUEL DEL MUNDO-
REDUCA, TEODORICO D. AGUSTIN, A plain reading of Article 2080 indicates that the article applies to guarantors.
REPRESENTED BY THEIR ATTORNEY- Mercantile's position that the provision applies with equal force to sureties fails to
IN-FACT, NOMER G. DEL MUNDO, appreciate the fundamental distinctions between the respective liabilities of a guarantor
PETITIONERS, v. THE MANILA and a surety.
SOUTHCOAST DEVELOPMENT
CORPORATION, INC., RESPONDENT
A surety is an insurer of the debt, whereas a guarantor is an insurer of the
solvency of the debtor. A suretyship is an undertaking that the debt shall be
G.R. No. 246679 - GOVERNOR
paid; a guaranty, an undertaking that the debtor shall pay. Stated
EDGARDO A. TALLADO, PETITIONER,
differently, a surety promises to pay the principal's debt if the principal will
v. COMMISSION ON ELECTIONS,
not pay, while a guarantor agrees that the creditor, after proceeding against
NORBERTO B. VILLAMIN, AND
the principal, may proceed against the guarantor if the principal is unable to
SENANDRO M. JALGALADO,
pay. A surety binds himself to perform if the principal does not,
RESPONDENTS
without regard to his ability to do so. A guarantor, on the other hand,
does not contract that the principal will pay, but simply that he is able to do
G.R. No. 246209 - MONICO A.
so. In other words, a surety undertakes directly for the payment and
ABOGADO, ROBERTO M. ASIADO,
is so responsible at once if the principal debtor makes default, while
LARRY HUGO, ANGELO SADANG,
a guarantor contracts to pay if, by the use of due diligence, the debt
NONELON BALBONTIN, SALITO
LAGROSA, ARZEL BELIDAN, RONALD cannot be made out of the principal debtor. x x x92 (Emphasis
GRANDIA, TROY LAGROSA, RONEL supplied; emphasis and underscoring in the original omitted)
EMPEDRAD, PN, PHILIPPINE COAST obligations under the contract subject of the suretyship. Mercantile's reliance on Article
refusing to satisfy the plaintiffs plainly valid, just and demandable claim."98
G.R. No. 243639 - PEOPLE OF THE
PHILIPPINES, PLAINTIFF-APPELLEE, v.
To recall, the Performance Bond explicitly required Mercantile to immediately
JOSE RASOS, JR. Y PADOLLO @
indemnify DLCI notwithstanding any dispute as to Altech's fulfillment of its
"JOSE", ACCUSED-APPELLANT
contractual obligations under the Sub-Contract.99 Mercantile's refusal to heed
G.R. No. 224562 - EXCEL GURRO Y DLCI's demand for liquidation to purportedly await Altech's action thereon despite the
MAGA, PETITIONER, v. PEOPLE OF clear and unequivocal terms of the Performance Bond defeated the very purpose for
THE PHILIPPINES, RESPONDENT.; which the said bond had been procured. Mercantile's unjust refusal to evaluate DLCI's
G.R. NO. 237216 PEOPLE OF THE claim appears to have been a deliberate attempt to delay action thereon until the
PHILIPPINES, PLAINTIFF-APPELLE, v. expiration of the Perfonnance Bond. Such gross and evident bad faith on the part of
EXCEL GURRO Y MAGA, WENNIE Mercantile warrants the award of litigation expenses in DLCI's favor.
° RESPONDENT Industry Arbitration Commission, Altech Fabrication Industries, Inc. and Mercantile
Insurance, Co., lnc."101 the records do not show that the CA had in fact acquired
G.R. No. 204782 - GENUINO AGRO- jurisdiction over Altech either by service of summons or voluntary participation.102
INDUSTRIAL DEVELOPMENT
CORPORATION, PETITIONER, v. Accordingly, the CA erred when it rendered judgment against Altech which, for all
ARMANDO G. ROMANO, JAY A. intents and purposes, stands as a non-party to the present case. Nevertheless, the
CABRERA AND MOISES V. Court deems it necessary to stress that Mercantile retains the right to seek full
SARMIENTO, RESPONDENTS
reimbursement from Altech on the basis of Article 2066103 of the Civil Code in a
separate case filed for the purpose.
A.C. No. 12154 - ATTY. ROGELIO N.
VELARDE, PETITIONER, v. ATTY.
WHEREFORE, premises considered, the petition for review on certiorari is DENIED.
RUBEN M. ILAGAN, RESPONDENT
The Decision dated July 30, 2012 and Resolution dated January 7, 2013 rendered by
the Court of Appeals in CA-G.R. SP. No. 80705 are AFFIRMED WITH
G.R. No. 237871 - MARGARITA
MODIFICATION.
FERNANDO, FELIX FERNANDO AND
MANUEL FERNANDO, SUBSTITUTED
Petitioner The Mercantile Insurance, Co. Inc. is liable to pay respondent DMCI-Laing
BY HIS LEGAL HEIRS, NAMELY:
Construction, Inc. the following amounts as surety, pursuant to the terms of
JOSEFINA FERNANDO ANDAYA AND
Performm1ce Bond No. G (13)-1500/97 dated September 5, 1997:
MARIA CONSOLACION FERNANDO
PARASO, PETITIONERS, v.
ROSALINDA RAMOS PAGUYO; HEIRS 1. Php31,618,494.81, representing the costs incurred by respondent as a result of
OF LEONARDO RAMOS, NAMELY: the delay and poor workmanship of petitioner's principal, Altech Fabrication
EDNA RAMOS DIMLA, ANDREA RAMOS Industries, Inc. (Principal Award);
MIRASOL, AND ERMINIA RAMOS
SAUL; VIRGILIO RAMOS 2. Interest applied on the Principal Award, at the rate of two percent (2%) per
REPRESENTED BY CHARLIE RAMOS month as stipulated under Performance Bond No. G (13)-1500/97, reckoned from
ALZATE; TEODORICO RAMOS; September 3, 1999, the date petitioner received respondent's first demand
AURORA RAMOS DELA CRUZ; (Stipulated Interest) until full payment;
VIRGINIA RAMOS PADILLA; RODOLFO
RAMOS; AND ROSITA RAMOS 3. Litigation expenses amounting to Php200,000.00.
FLORES, RESPONDENTS
This pronouncement shall be without prejudice to all legal remedies which petitioner
G.R. No. 241774 - FRANCISCO C.
The Mercantile Insurance, Co., Inc. may pursue against its principal, Altech Fabrication
DELGADO,REPRESENTED BY JOSE
Industries, Inc.
MARI DELGADO, PETITIONER, v. GQ
REALTY DEVELOPMENT CORP., MA.
SO ORDERED.
ROSARIO G. MEYER, KARL KURT
EDWARD MEYER, AND THE REGISTRY
OF DEEDS OF MAKATI CITY, Carpio, Acting C.J.,*(Chairperson), J. Reyes, Jr., Lazaro-Javier, and Zalameda, JJ.,
RESPONDENTS concur.
Endnotes:
G.R. No. 184535 - SISTER PILAR
VERSOZA, PETITIONER, v. PEOPLE OF
° Also referred to as "DMCI Laing Construction, Inc." in some parts of the
THE PHILIPPINES, MICHELINA S.
rollo.
AGUIRRE-OLONDRIZ, PEDRO
AGUIRRE, AND DR. MARISSA
* Designated as Acting Chief Justice per Special Order No. 2703 dated
PASCUAL, RESPONDENTS
September 10, 2019.
G.R. No. 205618 - ELFLEDA,
ALBERT, NAPOLEON, EDEN, 1
Rollo, pp. 9-49.
SEVERIANO, CELIA AND LEO, ALL
SURNAMED MARCELO, REPRESENTED 2
Id. at 50-74. Penned by Associate Justice Elihu A. Ybañez, with Associate
BY SPOUSES SEVERINO [DECEASED]
Justices Japar B. Dimaampao and Victoria Isabel A. Paredes concurring.
AND CELIA C. MARCELO,
PETITIONERS, v. SAMAHANG 3
Id. at 161-162.
MAGSASAKA NG BARANGAY SAN
MARIANO, REPRESENTED BY
4
Id. at 75-101. Dated October 27, 2003 and issued by the Arbitral Tribunal
GODOFREDO ERMITA, RESPONDENT
consisting of Chairman Alfredo F. Tadiar and Members Joven B. Joaquin and
Felicitas A. Pio Roda.
G.R. No. 216024 - SPS. ERNESTO V.
YU AND ELSIE YU, PETITIONERS, v.
5 Id. at 51-52.
EULOGIO A. TOPACIO, JR.,
RESPONDENT
6 Id. at 229-230.
8
As documented through DLCI's Letters dated November 21, 1998,
G.R. No. 213893 - NATIONAL
November 23, 1998, January 13, 1999, April 15, 1999, June 4, 1999,
POWER CORPORATION AND
August 24, 1999, September 20, 1999, September 16, 1999 and December
NATIONAL POWER BOARD,
7, 1998; rollo, pp. 231-236, 239, 247, 249-250 and 253-254.
PETITIONERS, v. EMMA Y. BAYSIC
AND NARCISA G. SANTIAGO,
9Rollo, p. 283.
RESPONDENTS
10 Id. at 284-285.
G.R. No. 200102 - THE REPUBLIC
OF THE PHILIPPINES, PETITIONER, v.
ARTHUR TAN MANDA, RESPONDENT 11 Id. at 286.
PHILIPPINES, PLAINTIFF-APPELLEE, v.
CARMELO CARPIO Y TARROZA, 17 Id. at 289.
ACCUSED-APPELLANT
18 Id. at 290.
G.R. No. 182842 - PCI LEASING &
FINANCE, INC., PETITIONER, v.
19 Id. at 53, 291.
SPOUSES JAMES D. GUTIERREZ AND
CATHERINE R. GUTIERREZ,
20 Id. at 53, 82.
RESPONDENTS. - G.R. No. 199393,
September 4, 2019 - SPOUSES DANTE
21
R. GUTIERREZ AND LOURDES D. Id. at 85.
GUTIERREZ, DOING BUSINESS
UNDER THE NAME AND STYLE OF 22
Id. at 75.
CAPITOL ALLIED TRADING &
TRANSPORT, PETITIONERS, v. PCI 23 Id. at 76.
27 Id. at 80.
28 Id. at 86.
30 Id. at 91.
31 Id.
32 Id.
33 Id. at 92.
34 Id.
35 Id. at 93-95.
36 Id. at 96.
37 Id. at 73.
38 Id. at 292-294.
39
Id. at 295.
40
Id. at 59.
41
See id.
42
Id. at 62-63.
43
Id. at 52, 63-64.
44
Id. at 65.
45
Id. at 69-70.
46
Id. at 70.
47
Id. at 72.
48
Id. at 10.
49
Id. at 3-7.
50
See id. at 8.
51
See Resolution dated March 18, 2013, id. at 157.
52
Id. at 8, 9.
53
Id. at 157.
54 Id. at 168-218.
55 Id. at 303-315.