G.R. No. 200759, March 25, 2015
FAJ CONSTRUCTION & DEVELOPMENT CORPORATION, Petitioner, vs. SUSAN M. SAULOG, Respondent.

FACTS

Petitioner FAJ Construction and Development Corporation and respondent Susan M. Saulog entered into a construction agreement on June 15, 1999, for a residential building in San Lorenzo Village, Makati City, with a contract price of P12,500,000.00, payable on a progress billing basis. Respondent made total payments of P10,592,194.80. Petitioner sent progress billing statements on October 31 and November 6, 2000, totaling P851,601.58, which respondent refused to pay. After performing additional work and another unpaid request for payment, petitioner terminated the contract. Petitioner sent demand letters, but respondent claimed petitioner’s work was defective. Petitioner filed a collection case (Civil Case No. Q-02-45865) with the RTC of Quezon City, praying for payment of the unpaid billings (P851,601.58), retention amount (P625,000.00), litigation expenses, attorney’s fees, and costs.
In her Answer with Compulsory Counterclaim, respondent claimed petitioner’s work was defective and delayed, causing rainwater seepage and extensive damage, forcing her to incur substantial repair and completion expenses. She counterclaimed for actual damages (P3,213,575.91), lost rentals (P5,391,456.00), consequential damages, moral and exemplary damages, penalties for delay, attorney’s fees, interest, and costs.
During trial, petitioner repeatedly failed to present its evidence despite several continuances and postponements. On April 29, 2003, due to non-appearance of petitioner’s counsel and witness, the RTC dismissed the case for failure to prosecute. Petitioner’s unverified motion for reconsideration was granted, reinstating the case. However, on subsequent hearing dates (July 29, 2003 and September 4, 2003), petitioner and counsel again failed to appear. On September 4, 2003, the RTC again dismissed the case for failure to prosecute, struck off petitioner’s witness’s testimony, and set the case for hearing on respondent’s counterclaim. Petitioner’s motions for reconsideration were denied.
Petitioner filed a petition for certiorari with the CA (CA-G.R. SP No. 82239), which was dismissed, affirming the RTC’s actions and noting petitioner’s pattern of delay. Petitioner elevated the matter to the Supreme Court (G.R. No. 166336), but the Petition was denied, and an Entry of Judgment was issued on January 17, 2006, declaring the CA Decision final and executory.
Thereafter, the RTC proceeded with respondent’s evidence on her counterclaim. Respondent presented architect Rhodora Calinawan, who testified to numerous defects in petitioner’s work, and respondent Susan Saulog, who testified on the defective work, damage from typhoon “Seniang,” her refusal to pay the balance due to unfinished work, and her expenses for rectification and completion totaling P3,820,796.21, among other damages.

ISSUE

Whether the Court of Appeals erred in affirming the Regional Trial Court’s decision which dismissed petitioner’s complaint and awarded damages to respondent on her counterclaim.

RULING

The Supreme Court DENIED the Petition. The Court held that the factual findings of the Court of Appeals, affirming those of the Regional Trial Court, are final and conclusive and cannot be reviewed on appeal. The principle that the Supreme Court is not a trier of facts applies. The RTC’s dismissal of petitioner’s complaint for failure to prosecute, after repeated non-appearances and delays, was affirmed by the CA and became final after the Supreme Court’s denial in G.R. No. 166336. This dismissal operated as an adjudication on the merits under Rule 17, Section 3 of the Rules of Court. Consequently, petitioner lost its right to present evidence, and the trial court correctly proceeded to receive respondent’s evidence on her counterclaim. The CA’s modification of the RTC’s award, reducing the actual damages to P3,213,575.91 (as substantiated by respondent’s evidence) and awarding attorney’s fees, was upheld. The Supreme Court found no reversible error in the CA’s decision.