G.R. No. 212375, January 25, 2017
Kabisig Real Wealth Dev., Inc. and Fernando C. Tio, Petitioners, vs. Young Builders Corporation, Respondent.

FACTS

Petitioner Kabisig Real Wealth Dev., Inc., through its representative Fernando Tio, contracted respondent Young Builders Corporation in April 2001 to supply labor, tools, equipment, and materials for the renovation of its building in Cebu City. Young Builders completed the work in September 2001 and billed Kabisig for P4,123,320.95. Despite demands, Kabisig refused payment, contending no written contract existed and it was never informed of the estimated costs. Young Builders filed a collection suit.
The Regional Trial Court ruled in favor of Young Builders, ordering Kabisig and Tio to pay the billed amount as actual damages plus 12% interest. The Court of Appeals affirmed but modified the award, deleting the grant of actual damages for lack of sufficient proof. Instead, it awarded P2,400,000.00 as temperate damages for the value of services and materials, with 12% interest. Petitioners sought review, arguing against liability.

ISSUE

Whether petitioners are liable to respondent for damages arising from the renovation contract.

RULING

Yes, petitioners are liable. The Supreme Court affirmed the CA’s finding of a valid contract. Under Article 1318 of the Civil Code, the essential requisites of consent, object, and cause concurred. Consent was manifested through petitioners’ commission of the work and acceptance of the renovation without objection. The absence of a written contract is immaterial, as contracts are obligatory in whatever form under Article 1356, provided essential requisites are present. Petitioners’ claim that the renovation benefited other entities does not absolve them, as all project documents were under their names and the other parties were not impleaded.
Regarding damages, the Court upheld the award of temperate damages. While Young Builders failed to prove the exact amount of loss with the required certainty for actual damages under Article 2199, temperate damages are proper under Article 2224 when some pecuniary loss has been proven but its exact amount cannot be ascertained. The renovation’s completion and petitioners’ use of the improved building established a factual basis for temperate damages. The CA correctly reduced the amount to P2,400,000.00 based on the evidence. The interest rate was modified: 12% per annum from September 11, 2001, to June 30, 2013, and 6% per annum from July 1, 2013, until full payment, pursuant to prevailing jurisprudence.