Tuesday, July 08, 2008 SC upholds ruling vs Shangrila hotel
THE Supreme Court (SC) has found the Edsa Shangri-la Hotel and Resort, Inc. (ESHRI) liable for payment of P33.59 million to a construction firm previously owned by Metropolitan Manila Development Authority (MMDA) chairman Bayani Fernando for the construction of the five-star hotel in Mandaluyong City.
In a decision penned by Associate Justice Presbiterio Velasco Jr., the SC Second Division affirmed the ruling of the Court of Appeals (CA) and the Pasig City Regional Trial Court (RTC) that ordered the hotel management to pay BF Corporation about P24.78 million for unpaid billings.
They are also to return to petitioner the retention sum of P5.8 million; and to pay a total of P3 million representing attorney's fees, moral and exemplary damages.
Named respondents in the suit were ESHRI president Rufo Calayco and other officials Rufino Samaniego, Kuok Khoon Chen and Kuok Khoon Tsen.
"Accordingly, the factual findings of the trial court, as affirmed by the CA, that there was delay on the part of ESHRI, that there was no proof that BF's work was defective, and that petitioners were guilty of malice and bad faith ought to be affirmed," the SC said.
The high court junked the argument of ESHRI that the CA and the trial court should have not accepted as part of BF Corp.'s evidence photocopies of the progress billings nos. 14-19 and the complementing Project Manager's Instructions (PMIs) and the Work Variation Orders (WVOs), being mere secondary evidence.
The SC ruled that a party may present secondary evidence of the contents of writing not only when the original is lost or destroyed, but also when it is in the custody or under the control of the adverse party.
"In our view, the trial court correctly allowed the presentation of the photocopies documents in questions as secondary evidence. Any suggestion that BF failed to lay the required basis for presenting the photocopies of progress billings nos. 14 to 19 instead of their originals has to be dismissed," the SC said.
Being corporate owners, respondents are likewise liable to pay the obligations of the of the hotel firm.
Court records showed that BF Corp. submitted a total of 19 progress billings from May 1, 1991 to June 30, 1992. Based on progress billings nos. 1 to 13, ESHRI paid BF P86.5 million for the construction of the hotel.
However, BF said that for progress billings nos. 14 to 19, the hotel management did not re-measure the work done and did not prepare the progress payment certificates or remit payment for the inclusive periods covered.
Claiming to have been misled into working continuously on the project by ESHRI which gave the assurance about the progress payment certificates already being processed, BF began to collect the unpaid billings.
After futile attempts, BF filed a complaint before the Pasig RTC on June 26, 1993 for a sum of money and damages.
In its defense, ESHRI claimed having overpaid BF Corp. for progress billing nos. 1 to 13 and, by way of counterclaim with damages, asked that the construction firm be ordered to refund the excess payments.
ESHRI also charged BF with incurring delay and turning with inferior work accomplishment.
On September 23, 1996, the lower court held that BF is entitled to the payment of its claim covered by progress billing nos. 14 to 19. It also declared that ESHRI's refusal to pay BF's valid claims constituted evident bad faith entitling BF to moral damages and attorney's fees.
An appeal before the CA affirmed the lower court's ruling on November 12, 1999, prompting ESHRI to elevate the case before the SC. (ECV/Sunnex)
