PHILROCK, INC.

, Petitioner
vs. CONSTRUCTION INDUSTRY ARBITRATION COMMISSION and Spouses VICENTE and
NELIA CID, Respondents.
FACTS:

Respondents, filed a Complaint for damages against Philrock and 7 of its officers and
engineers w/ the RTC. The court dismissed the case and refers the same to the the
spouses and Philrock had filed an Agreement to Arbitrate with the CIAC.
Preliminary conferences were held together with their appointed arbitrators. However,
disagreements arose as to whether moral and exemplary damages and tort should be
included as an issue and whether the 7 officers and engineers of Philrock who are not
parties to the Agreement to Arbitrate should be included in the arbitration proceedings.
No common ground was reached, hence both the spouses and Philrock requested the
case be remanded to the trial court. The Arbitral Tribunal dismissed the case for referral
to RTC where it first originated.
The trial court declared it no longer had jurisdiction over the case and ordered the
records of the case to be remanded anew to the CIAC for arbitral proceedings.
The CIAC resumed conducting preliminary conferences. Then Philrock requested to
suspend the proceedings until the court clarified its ruling in the Order. Philrock argued
that said order was based on a mistaken premise that the proceedings in the CIAC fell
through because of the refusal of Philrock to include the issue of damages therein,'
whereas the true reason for the withdrawal of the case from the CIAC was due to
Philrock's opposition to the inclusion of its 7 officers and engineers, who did not give
their consent to arbitration, as party defendants.
Respondents was willing to exclude the 7 officers and engineers of Philrock so as to
facilitate or expedite the proceedings. Thus the Arbitral Tribunal denied Philrock's
request.
Philrock's counsel agreed to continue the proceedings but reserved the right to file a
pleading elucidating the position he raised regarding the Court's Order. The parties then
finalize, approve and sign the Terms of Reference. Philrock's counsel affixed his
signature stating 'the parties agree that their differences be settled by an Arbitral
Tribunal
Then Philrock filed a Motion to Dismiss, after the Arbitral Tribunal ruled in favor of the
spouses alleging the CIAC had lost jurisdiction to hear the arbitration case due to the
parties' withdrawal of their consent to arbitrate. The motion was denied by CIAC.
ISSUE:
1. Whether or not the CIAC could take jurisdiction over the case the case had been
dismissed by both the RTC and the CIAC.
2. W/ the respondents has a cause of action.
3. W/ the awarding of moral and nominal damages and attorney's fees and expenses of
litigation in favor of respondents is proper.
HELD:

YES Sec. 4 of EO 1008 expressly vests the CIAC original and exclusive jurisdiction over
disputes arising from or connected with construction contracts entered into by parties that have
agreed to submit their dispute to voluntary arbitration.
First, private respondents removed the obstacle to the continuation of the arbitration,
precisely by withdrawing their objection to the exclusion of the 7 engineers. Second, petitioner
continued participating in the arbitration even after the CIAC Order had been issued. It even
concluded and signed the Terms of Reference which the parties stipulated the circumstances
leading to the dispute; summarized their respective positions, issues, and claims; and identified
the composition of the tribunal of arbitrators.
The document clearly confirms both parties intention and agreement to submit the
dispute to voluntary arbitration. In view of this fact, we fail to see how the CIAC could have been
divested of its jurisdiction. Finally petitioner maneuvered to avoid the RTCs final resolution of
the dispute by arguing that the regular court also lost jurisdiction after the arbitral tribunals.
Thus, petitioner conceded and estopped itself from further questioning the jurisdiction of the
CIAC. The Court will not countenance the effort of any party to subvert or defeat the objective of
voluntary arbitration for its own private motives. After submitting itself to arbitration proceedings
and actively participating therein, petitioner is estopped from assailing the jurisdiction of the
CIAC, merely because the latter rendered an adverse decision
YES - Cause of action is defined as an act or omission by which a party violates the right of
another. A complaint is deemed to have stated a cause of action provided it has indicated the
following: (1) the legal right of the plaintiff, (2) the correlative obligation of the defendant, and (3)
the act or the omission of the defendant in violation of the said legal right. The cause of action
against petitioner was clearly established.
Respondents were purchasers of ready-mix concrete from petitioner. The concrete delivered by
the latter turned out to be of substandard quality. As a result, respondents sustained damages
when the structures they built using such cement developed cracks and honeycombs.
YES Since the respondents sustained damages, they are entitled to monetary award including
attorneys fees and expenses of litigation.
Respondents were deprived of the comfort and the safety of a house and were exposed to the
agony of witnessing the wastage and the decay of the structure for more than 7 years.
Moreover Respondent Vicente died without seeing the completion of their home. Thus, the
award of moral damages is proper. The award includes attorneys fees, and expenses of
litigation. Because they incurred expenses in pursuing their action before the CIAC, as well as
the regular and the appellate courts. We find no reason to disturb this award.
However Nominal damages are recoverable only if no actual or substantial damages resulted
from the breach, or no damage was or can be shown. Since actual damages have been proven
by private respondents for which they were amply compensated, they are no longer entitled to
nominal damages.

HEIRS OF AUGUSTO L. SALAS, JR, Petitioner

vs.
LAPERAL REALTY CORPORATION, ROCKWAY REAL ESTATE CORPORATION, SOUTH
RIDGE VILLAGE, INC., MAHARAMI DEVELOPMENT CORPORATION, Spouses THELMA D.
ABRAJANO and GREGORIO ABRAJANO, OSCAR DACILLO, Spouses VIRGINIA D. LAVA
and RODEL LAVA, EDUARDO A. VACUNA, FLORANTE DE LA CRUZ, JESUS VICENTE B.
CAPELLAN, and the REGISTER OF DEEDS FOR LIPA CITY, Respondents
FACTS:
Salas was the owner of a vast tract of land. He entered an owner-contractor agreement
w/ Laperal to render and provide complete construction services of his land.
Salas then executed an SPA in favor of Laperal to exercise general control, supervision
and management of the sale of his land, for cash or on installment basis.
The next day he left to Nueva Ecija and never returned. After 7 years, his spouse filed
for the declaration of presumptive death to which the court granted.
Meantime, Laperal subdivided the land of Salas and sold subdivided portions thereof to
respondents Rockway Real Estate Corporation and South Ridge Village, Inc,
spousesAbrajano and Lava and Oscar Dacillo on June 27, 1991 and to Eduardo
Vacuna, Florante de la Cruz and Jesus Vicente Capalan all of whom are hereinafter
referred to as respondent lot buyers.
The heirs of Salas filed a complaint for declaration of nullity of sale, reconveyance,
cancellation of contract, accounting and damages against respondents.
Laperal filed a motion to dismiss on the ground that petitioners failed to submit their
grievance to arbitration as required under Article VI of the Agreement which provides,
All cases of dispute between CONTRACTOR and OWNER'S representative shall be
referred to the committee represented by:
a. One representative of the OWNER;
b. One representative of the CONTRACTOR;
c. One representative acceptable to both OWNER and CONTRACTOR.
ISSUE:
W/ respondent Laperal has the right to compel petitioner to undergo Arbitration?
HELD:
YES Laperal has the right to compel petitioners to first arbitrate before seeking judicial
relief. In so far as the agreement is concerned, only the heirs of Salas and Laperal are
bound by the contract to undergo Arbitration. Article 1311 of the Civil Code provides that
"contracts take effect only between the parties, their assigns and heirs". Since the
respondents other than the Laperal are not assignees, rather buyers, the provision shall
not apply.
However, to split the proceedings into arbitration for Laperal and trial for the
respondent lot buyers, or to hold trial in abeyance pending arbitration between
petitioners and Laperal would in effect result in multiplicity of suits, duplicitous procedure
and unnecessary delay. It would be in the interest of justice if the trial court hears the
complaint against all herein respondents and adjudicates petitioners' rights as against
theirs in a single and complete proceeding.