GR 163915; (October, 2006) (Digest)
G.R. No. 163915 October 12, 2006
ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION, petitioner, vs. COMFAC CORPORATION, respondent.
FACTS
Petitioner Asian Construction and Development Corporation (ASIAKONSTRUCT) awarded respondent Comfac Corporation two construction contracts. Comfac completed the projects, and the Certificates of Completion were confirmed by ASIAKONSTRUCT’s Group Manager. After Comfac sent demand letters for an unpaid balance of P1,969,863.50, which went unheeded, it filed a collection case. During trial, ASIAKONSTRUCT’s counsel repeatedly failed to appear. The trial court deemed ASIAKONSTRUCT to have waived its right to present evidence and ruled in favor of Comfac, awarding the principal amount with interest and attorney’s fees.
The Court of Appeals affirmed the trial court with modifications, reducing the interest rate to 6% per annum and ordering the deduction of the 1% expanded withholding tax from the principal. ASIAKONSTRUCT appealed to the Supreme Court, challenging the authentication of Comfac’s evidence, the proof of project completion, the award of attorney’s fees, and the computation of the interest base.
ISSUE
The issues are: (1) whether Comfac’s documentary evidence was properly authenticated; (2) whether Comfac proved completion of the project; (3) whether Comfac is entitled to attorney’s fees; and (4) whether the 6% legal interest should be based on the balance after deducting the withholding tax.
RULING
The Supreme Court partially granted the petition. On the first two issues, the Court ruled that ASIAKONSTRUCT’s failure to timely object to Comfac’s evidence during trial rendered the evidence admissible. The rule is that failure to object to offered evidence constitutes a waiver of any objection, and such evidence becomes part of the record. This principle applies to the invoices and the Certificates of Completion, the latter being validly confirmed by ASIAKONSTRUCT’s own representative. Thus, Comfac sufficiently proved its claim.
Regarding attorney’s fees, the Court deleted the award. Attorney’s fees are not recoverable in the absence of stipulation, except under specific circumstances enumerated in Article 2208 of the Civil Code. The mere fact that Comfac was compelled to litigate does not automatically justify an award, absent a showing of bad faith. The Court found no compelling reason to uphold the award.
Finally, the Court affirmed that the 6% legal interest should be computed based on the principal amount after deducting the 1% expanded withholding tax, as correctly held by the Court of Appeals. The modified principal amount is P1,912,877.15. ASIAKONSTRUCT was also ordered to furnish Comfac the corresponding certificate of creditable withholding tax at source.