Sarmiento v. Court Of Appeals

KAPUNAN, J.:

In this petition for review on certiorari, petitioner seeks the annulment of the decision of the Court of Appeals (CA-G.R. Civil Case No. 31602) promulgated on 23 October 1992 and it resolution dated 30 June 1993 denying petitioner's motion for reconsideration. The facts leading to the present controversy are as follows: On 15 December 1981, private respondent MWSS advertised for bidding by pre-qualified contractors, Contract No. RS-4 which involved the: 1) Modification and improvement of its eleven (11) existing pumping stations within Metro Manila; 2) Demolition and complete reconstruction of the existing Cubao Booster Pumping Station; 3) Construction of a new Booster pumping station at Novaliches and a 7 megalitre (ML) reinforced concrete reservoir, as well as other accessories and services necessary and incidental to construct and complete the work in accordance with the technical specification No. 1.1 of the Contract Documents.

On 6 April 1982, MWSS held the public bidding which petitioner won, his bid in the amount of P60,000,000.00 being the lowest. Included in said amount was the price of P13,500,000.00 for the supply, delivery and supervision of installation of new pump units ( prime cost items) for the project. On 14 October 1982, MWSS awarded petitioner the contract pursuant to Board Resolution No. 121-82 adopted on 9 September 1982.

On 21 December 1982, MWSS and petitioner executed the contract for the RS-4 project. On 15 March 1983, MWSS issued petitioner the Notice to Proceed, upon receipt of which petitioner commenced construction of the project. On 3 May 1983, MWSS released P9,000,000.00 to petitioner as advance payment for mobilization.

During the construction period, petitioner furnished MWSS eight (8) vehicles to be used in the RS-4 project and for which MWSS agreed to compensate petitioner. On 14 August 1984, due to his tight financial situation brought about by rising inflation, petitioner wrote MWSS requesting a joint termination of the contract. On 16 July 1984, pursuant to General Condition No. 621 of the bid documents providing force majeure as basis for joint termination, MWSS and petitioner approved the joint termination of said project.

On 28 September 1984, MWSS informed petitioner that effective 1 October 1984, it would take over the rehabilitation of the Cubao, Makati and Novaliches pumping stations. On 14 February 1989, due to MWSS' refusal to pay petitioner its alleged indebtedness, the latter filed a complaint for sum of money with the Regional Trial Court of Quezon City, to collect from MWSS the following: 1). The amount of P13,735,095.18 as net payable to plaintiff Sarmiento broken down as follows: a).

Exceeded quantities/ overrun for civil works accomplished by plaintiff Sarmiento P10,925.62 b). For the use by MWSS of plaintiff Sarmiento's vehicles 101,849.65 c). For the loss by MWSS of plaintiff Sarmiento's vehicles 180,000.00 d).

For foreign currency adjustment in the import of materials and equipment under SGC 10 of the contract documents 11,822,082.37 e). For the cost of exceeded quantities in the materials and equipment imported and delivered by plaintiff Sarmiento to MWSS 1,236,562.96 f). For the balance unspent in the prime cost items 6,135,784.14 g).

For price escalation on plaintiffs accomplishment per Presidential Decree No. 1594 192,000.00 Total