G.R. No. 159795. July 30, 2004.
SPOUSES ROBERTO & EVELYN DAVID and COORDINATED GROUP, INC., petitioners, vs. CONSTRUCTION INDUSTRY ARBITRATION COMMISSION and SPS. NARCISO & AIDA QUIAMBAO, respondents.

FACTS

Petitioner Coordinated Group, Inc. (CGI), represented by its President and Treasurer, spouses Roberto and Evelyn David, entered into a Design/Build Contract with respondent spouses Narciso and Aida Quiambao for the construction of a building. The contract stipulated a completion period and a contract price. Petitioners failed to complete the project by the extended deadline and, critically, deviated from the approved structural plans without respondents’ consent. After paying 74.84% of the contract price, respondents rescinded the contract due to these deviations and petitioners’ failure to correct them.
The parties initially filed a case in the Regional Trial Court but subsequently agreed to submit their dispute to arbitration by the Construction Industry Arbitration Commission (CIAC). The appointed sole arbitrator, after hearings and ocular inspections, rendered an award largely in favor of the respondents, ordering petitioners to pay a net award of over Four Million Pesos. The Court of Appeals affirmed the CIAC award but deleted the item for lost rentals.

ISSUE

The core issues raised were: (1) whether respondents had a valid basis to unilaterally rescind the contract given petitioners’ claim of substantial performance, and (2) whether the David spouses could be held jointly and severally liable with the corporate petitioner, CGI.

RULING

The Supreme Court dismissed the petition. On the first issue, the Court emphasized that the findings of fact of the CIAC arbitral tribunal, as affirmed by the Court of Appeals, are conclusive and binding. The arbitrator found that petitioners committed a fundamental breach by revising and deviating from the structural plans without approval, which justified rescission. Petitioners’ attempt to frame this as a legal question was unavailing; it was a factual matter already settled by the arbitrator’s evaluation of the evidence, including expert assessment and ocular inspections.
On the second issue, the Court found that the David spouses, as corporate officers, were correctly held jointly and severally liable. The doctrine of separate juridical personality does not shield corporate officers from personal liability for acts done in bad faith or that are grossly negligent. The arbitrator’s findings established that the deviations from the plans were not mere errors but willful alterations, implying bad faith or gross negligence in the performance of the corporate contract, for which the acting officers could be held personally accountable.
Ultimately, the Court reinforced the finality of CIAC arbitral awards. Appeals are limited to questions of law, and the Court will not re-examine factual conclusions or allow arbitration to be undermined by relitigating factual issues disguised as legal questions, absent a showing of grave abuse of discretion tantamount to lack of jurisdiction. No such abuse was found.