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VOL. 266, JANUARY 2, 1997 71

Roblett Industrial Construction Corp. vs. Court of Appeals

*
G.R. No. 116682. January 2, 1997.

ROBLETT INDUSTRIAL CONSTRUCTION

CORPORATION, petitioner, vs. COURT OF APPEALS and
CONTRACTORS EQUIPMENT CORPORATION,
respondents.

Remedial Law; Estoppel; Petitioner having limited itself to the

issue of full payment to the exclusion of any other, can no longer be
permitted to assail the finding of the trial court on the validity of
the Agreement.—Significantly, in the proceedings before
respondent Court of Appeals, petitioner assigned a lone error
allegedly committed by the trial court, i.e., full payment, if not
overpayment by P12,000.00, of the obligation referred to in the
second issue raised in the petition therein. Quite obviously,
having limited itself to that particular issue to the exclusion of
any other, petitioner can no longer be permitted to assail the
finding of the trial court on the validity of the Agreement.
Same; Weight and Sufficiency of Evidence; In the absence of
any showing that the trial court failed to appreciate facts and
circumstances of weight and substance that would have altered its
conclusion, no compelling reason exists for the Court to impinge
upon matters more appropriately within its province.—As regards
the factual issue on the correctness of the amount of petitioner’s
obligation, or whether it has been fully paid, petitioner insists
that from a perusal of Exhs. “2,” “2-A” to “2-Z” all of which refer to
respondent’s Equipment Daily Time Reports for 2 May to 14 June
1985, it was established that the equipment leased was actually
used for only 191 hours. Multiplying 191 hours by the rental rate
of P540.00 per hour will amount to P103,140.00 which is
petitioner's correct rental obligation to respondent. Taking into
account the construction materials worth P115,000.00 received by
respondent from petitioner an overpayment of P12,000.00 more or
less results. In the absence of any showing that the trial court
failed to appreciate facts and circumstances of weight and
substance that would have altered its conclusion, no compelling

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reason exists for this Court to impinge upon matters more

appropriately within its province. Consequently, we sustain the
finding of the trial court that the evidence relied upon by
petitioner is incomplete as it does not

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* FIRST DIVISION.

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72 SUPREME COURT REPORTS ANNOTATED

Roblett Industrial Construction Corp. vs. Court of Appeals

reflect the entire period of the lease agreement which, on the

basis of respondent’s evidence, covered the period of 28 March to
12 July 1985.
Same; Estoppel in Pais; Estoppel in pais arises when one, by
his acts, representations or admissions, or by his own silence when
he ought to speak out, intentionally or through culpable
negligence, induces another to believe certain facts to exist and
such other rightfully relies and acts on such belief, so that he will
be prejudiced if the former is permitted to deny the existence of
such facts.—Furthermore, estoppel in pais arises when one, by his
acts, representations or admissions, or by his own silence when he
ought to speak out, intentionally or through culpable negligence,
induces another to believe certain facts to exist and such other
rightfully relies and acts on such belief, so that he will be
prejudiced if the former is permitted to deny the existence of such
facts. This doctrine obtains in the present case. A statement of
account for P376,350.18 covering the period abovementioned was
received from respondent by petitioner with nary a protest from
the latter. Neither did petitioner controvert the demand letter
concerning the overdue account of P237,909.38; on the contrary, it
asked for ample time to source funds to substantially settle the
account.

PETITION for review on certiorari of a decision of the

Court of Appeals.

The facts are stated in the opinion of the Court.

A.S. Dy & Associates for petitioner.
Pelaez, Gregorio, Sipin, Bala & Robles for private
respondent.

BELLOSILLO, J.:
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On 23 September 1986 respondent Contractors

Equipment Corporation (CEC) instituted an action for a
sum of money against petitioner Roblett Industrial
Construction Corporation (RICC) before the Regional Trial
Court of Makati alleging that in 1985 it leased to the latter
various construction equipment which it used in its
projects. As a result RICC incurred unpaid accounts
amounting to P342,909.38.

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VOL. 266, JANUARY 2, 1997 73

Roblett Industrial Construction Corp. vs. Court of Appeals

On 19 December 1985 RICC through its Assistant Vice

President for Finance
1
Candelario S. Aller, Jr. entered into
an Agreement with CEC where it confirmed petitioner’s
account. As an off-setting arrangement respondent received
from petitioner construction materials worth P115,000.00
thus reducing petitioner’s balance to P227,909.38.
A day before the execution of their Agreement, or on 18
December 1985, RICC paid CEC P10,000.00 in postdated
checks which when deposited were dishonored. As a
consequence the latter debited the amount to petitioner’s
account of P227,909.38 thus increasing its balance to
P237,909.38.
On 24 July 1986 Mariano R. Manaligod, Jr., General
Manager of CEC, sent a letter of demand to petitioner
through its Vice President for Finance regarding the
latter’s overdue account of P237,909.38 and sought
settlement thereof on or before 31 July 1986. In reply,
petitioner requested for thirty (30) days to have enough
time to look for funds to substantially settle its account.
Traversing the allegations of respondent, Candelario S.
Aller, Jr. declared that he signed the Agreement with the
real intention of having proof of payment. In fact Baltazar
Banlot, Vice President for Finance of petitioner, claimed
that after deliberation and audit it appeared that petitioner
overpaid respondent by P12,000.00 on the basis of the
latter’s Equipment Daily Time Reports for 2 May to 14
June 1985 which reflected a total obligation of only
P103,000.00. He claimed however that the Agreement was
not approved by the Board and that he did not authorize
Aller, Jr. to sign thereon.
On rebuttal, Manaligod, Jr. declared that petitioner had
received a statement of account covering the period from 28
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March to 12 July 1985 in the amount of P376,350.18 which

it never questioned. From this amount P3,440.80, based on
respondent’s account with petitioner and P30,000.00,
representing payments made by the latter, were deducted
thus leaving a balance of P342,909.38 as mentioned in the
Agreement.

_______________

1 Exh. “A,” Records, pp. 5-6.

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Roblett Industrial Construction Corp. vs. Court of Appeals

On 19 December 1990 the trial court rendered judgment

ordering petitioner to pay respondent: (a) P237,909.38 plus
legal interest from 31 July 1986 until full payment; (b)
P2,000.00 as litigation expenses; (c) 20% of the sum 2 due
and payable as attorney’s fees; and, (d) cost of suit. Its
ruling is anchored on its finding that—

1. The Court finds the Agreement (EXHIBIT “A,” EXHIBIT “I”)

between the parties valid and that it reflects the true intention of
the parties. It must be emphasized that the same agreement was
used by plaintiff as the basis for claiming defendant’s obligation of
P237,909.38 and also used by defendant as the same basis for its
alleged payment in full of its obligation to plaintiff. But while
plaintiff treats the entire agreement as valid, defendant wants
the court to treat that portion which treats of the offsetting of
P115,000.00 as valid, whereas it considers the other terms and
conditions as “onerous, illegal and want of prior consent and
Board approval.” This Court cannot agree to defendant’s
contention. It must be stressed that defendant’s answer was not
made under oath, and therefore, the genuineness and due
execution of the agreement (EXHIBIT “A,” EXHIBIT “I”) which
was the basis for plaintiff’s claim is deemed admitted (Section 8,
Rule 8, Rules of Court). Such admission, under the principle of
estoppel, is rendered conclusive upon defendant and cannot be
denied or disproved as against plaintiff (Art. 1431, Civil Code).
Either the agreement (EXHIBIT “A,” EXHIBIT “I”) is valid or
void. It must be treated as a whole and not to be divided into
parts and consider only those provisions which favor one party (in
this case the defendant). Contracts must bind both contracting
parties, its validity or compliance cannot be left to the will of one
of them (Art. 1308, New Civil Code).

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Defendant further contends that the agreement did not reflect

the real intention of the parties. However, when plaintiff wrote
defendant in its letter dated July 24, 1986 (EXHIBIT “F”) that it
be given thirty (30) days to substantially settle the same, clearly,
at this point in time, defendant did not question its account with
plaintiff, nor did it question the validity nor the contents of the
Agreement (EXHIBIT “A,” EXHIBIT “I”). This Court is not con-

_______________

2 Decision penned by Judge Ignacio M. Capulong, NCJR RTCBr. 134, Makati,

Metro Manila, Rollo, p. 25.

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VOL. 266, JANUARY 2, 1997 75

Roblett Industrial Construction Corp. vs. Court of Appeals

vinced that the Agreement (EXHIBIT “A,” EXHIBIT “I”) does not
reflect the true intention of the parties. On the contrary, it does.
2. To the issue that defendant has fully paid its obligation to
plaintiff by way of offset for the P115,000.00 construction
materials received by plaintiff, this Court finds the contention of
defendant without basis in fact. Defendant’s presentation of
evidence (EXHIBITS “2,” “2-A” up to “2-Z) merely consists of daily
time reports of plaintiff consisting of 191 hours only, the period
May 2, 1985 to June 14, 1985 and does not reflect the entire
period of the lease agreement (EXHIBIT “L”), while plaintiff
accurately reflects in Exhibits “I,” “J,” “K” and its submarkings
the entire period, covered by the lease agreement (EXHIBIT “L”),
which is from March 28, 1985 to July 12, 1985 and correctly states
the amount 3 due plaintiff from defendant in the amount of
P376,350.18.

On 29 July 1994 respondent 4

Court of Appeals affirmed
the decision of the trial court.
Petitioner imputes the following errors to respondent
court: (1) in not holding that, insofar as it fixed petitioner’s
alleged obligation to respondent at P342,909.38, the
Agreement is unenforceable for being in the nature of an
unauthorized contract; and, (2) in not holding that
petitioner’s obligation to respondent had been fully paid
and that petitioner even overpaid respondent by
P12,000.00.
As regards the first error, petitioner asserts that the
Agreement is unenforceable for having been executed by
Candelario S. Aller, Jr. without authority.

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Significantly, in the proceedings before respondent

Court of Appeals, petitioner assigned a lone error allegedly
committed by the trial court, i.e., full payment, if not
overpayment by P12,000.00, of the obligation referred to in
the second issue raised in the petition therein. Quite
obviously, having limited itself to that particular issue to
the exclusion of any other,

_______________

3 Rollo, p. 24.
4 Decision penned by Justice Serafin V. C. Guingona, concurred in by
Justices Gloria C. Paras and Eubulo G. Verzola; Rollo, p. 38.

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76 SUPREME COURT REPORTS ANNOTATED

Roblett Industrial Construction Corp. vs. Court of Appeals

petitioner can no longer be permitted to assail the 5

finding
of the trial court on the validity of the Agreement.
As regards the factual issue on the correctness of the
amount of petitioner’s obligation, or whether it has been
fully paid, petitioner insists that from a perusal of Exhs.
“2,” “2-A” to “2-Z” all of which refer to respondent’s
Equipment Daily Time Reports for 2 May to 14 June 1985,
it was established that the equipment leased was actually
used for only 191 hours. Multiplying 191 hours by the
rental rate of P540.00 per hour will amount to P103,140.00
which is petitioner’s correct rental obligation to respondent.
Taking into account the construction materials worth
P115,000.00 received by respondent from petitioner an
overpayment of P12,000.00 more or less results. In the
absence of any showing that the trial court failed to
appreciate facts and circumstances of weight and substance
that would have altered its conclusion, no compelling
reason exists for this Court to impinge 6
upon matters more
appropriately within its province. Consequently, we
sustain the finding of the trial court that the evidence
relied upon by petitioner is incomplete as it does not reflect
the entire period of the lease agreement which, on the basis
of respondent’s evidence, covered the period of 28 March to
12 July 1985.
Furthermore, estoppel in pais arises when one, by his
acts, representations or admissions, or by his own silence
when he ought to speak out, intentionally or through
culpable negligence, induces another to believe certain facts
to exist and such other rightfully relies and acts on such
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belief, so that he will be prejudiced if the 7

former is
permitted to deny the existence of such facts. This doctrine
obtains in the present case. A statement of account for
P376,350.18 covering the

_______________

5 See Compañia Maritima v. Court of Appeals, G.R. No. 50900, 9 April

1985, 135 SCRA 593.
6 People v. Caras, G.R. No. 112731, 18 July 1994, 234 SCRA 199.
7 Panay Electric Co. v. Court of Appeals, G.R. No. 81939, 29 June 1989,
174 SCRA 500.

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VOL. 266, JANUARY 2, 1997 77

Roblett Industrial Construction Corp. vs. Court of Appeals

period above mentioned was received from respondent by

petitioner with nary a protest from the latter. Neither did
petitioner controvert the demand letter concerning the
overdue account of P237,909.38; on the contrary, it asked
for ample time to source funds to substantially settle the
account.
WHEREFORE, the petition is DENIED. The decision of
respondent Court of Appeals dated 29 July 1994 affirming
that of the Regional Trial Court of Makati dated 19
December 1990 is AFFIRMED. Costs against petitioner.
SO ORDERED.

Padilla (Chairman), Vitug, Kapunan and

Hermosisima, Jr., JJ., concur.

Petition denied, judgment affirmed.

Note.—Under Section 2, Rule 9 of the Rules of Court,

defenses and objection not pleaded either in a motion to
dismiss or in an answer, except for failure to state a cause
of action, are deemed waived. It is not the innovation of any
of such defenses, but the failure to so raise them, that can
result in waiver or estoppel. (La Naval Drug Corporation
vs. Court of Appeals, 236 SCRA 78 [1994])

——o0o——

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