CASE DIGEST PHILIPPINE NATIONAL CONSTRUCTION CORPORATION (PNCC) vs. APAC MARKETING CORPORATION (APAC) [G.R. No.

190957; Ju ! 5" #01$% FACTS: In March 1998, Petitioner PNCC engaged the services of Res ondent APAC !" !#"ing aggregates $ateria%s fro$ APAC, for &hich the %atter had de%ivered and s# %ied good '#a%it" cr#shed !asa%t roc(. The arties had initia%%" agreed on the ter$s of a"$ent, &here!" PNCC &o#%d iss#e the chec( corres onding to the va%#e of the $ateria%s to !e de%ivered, or )Chec( *efore +e%iver",) !#t rior to the i$ %e$entation of the said a"$ent agree$ent, Petitioner re'#ested fro$ Res ondent a ,-.da" ter$ fro$ the de%iver" date &ithin &hich to a", &hich %atter acce ted. After $a(ing de%iveries #rs#ant to the #rchase orders and des ite de$ands !" APAC, PNCC fai%ed and ref#sed to a" and sett%e their overd#e acco#nts. A co$ %aint for co%%ection of s#$ of $one" &as fi%ed !" APAC ra"ing for a"$ent of the a$o#nt of P/80,091.8- ) %#s %ega% interest at the rate of not %ess than 12 $onth%", to start in A ri%, 1999 #nti% the f#%% o!%igation is co$ %ete%" sett%ed and aid,) a$ong others. PNCC fi%ed a $otion to dis$iss, !#t the Regiona% Tria% Co#rt 3RTC4 di$issed the $otion. The RTC rendered 5#dg$ent in favor of APAC. PNCC fi%ed a $otion for reconsideration, &hich the RTC, in an 6rder considered PNCC7s c%ai$ of f#%% a"$ent of the rinci a% o!%igation, !#t sti%% it ordered the$ to a" %ega% interest of t&e%ve ercent 31024 er ann#$. The Co#rt of A ea%s affir$ed the decision of the RTC !#t %o&ered the %ega% interest to si8 ercent 3124 er ann#$. PNCC fi%ed a $otion for reconsideration, &hich raised the %one iss#e of the ro riet" of the a&ard of attorne"9s fees in favor of res ondent. The A e%%ate Co#rt denied said $otion. :ence, the instant case. ISS;<: =hether or not the a&arding of attorne"7s fee to Res ondent APAC is ro er.
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 C6;RT R;>IN?: No. The a&arding of attorne"7s fee to Res ondent is not ro er. Artic%e 00-8 of the Ne& Civi% Code of the Phi%i ines states the o%ic" that sho#%d g#ide the co#rts &hen a&arding attorne"9s fees to a %itigant. As a genera% r#%e, the arties $a" sti #%ate the recover" of attorne"9s fees. In the a!sence on s#ch sti #%ation, this artic%e restrictive%" en#$erates the instances &hen these fees $a" !e recovered. In a%% cases en#$erated in said artic%e, the attorne"7s fees and e8 enses of %itigation $#st !e reasona!%e. The attorne"9s fees are not a&arded as a $atter of co#rse ever" ti$e a art" &ins. The Co#rt does not #t a re$i#$ on the right to %itigate. 6n occasions that those fees are a&arded, the !asis for the grant $#st !e c%ear%" e8 ressed in the decision of the co#rt. The Co#rt have consistent%" he%d that an a&ard of attorne"9s fees #nder Artic%e 00-8 de$ands fact#a%, %ega%, and e'#ita!%e 5#stification to avoid s ec#%ation and con5ect#re s#rro#nding the grant thereof. +#e to the s ecia% nat#re of the a&ard of attorne"9s fees, a rigid standard is i$ osed on the co#rts !efore these fees co#%d !e granted. :ence, it is i$ erative that co#rts c%ear%" and distinct%" set forth in their decisions the !asis for the a&ard thereof. It is not eno#gh that the co#rts $ere%" state the a$o#nt of the grant in the dis ositive ortion of their decisions. It !ears reiteration that the a&ard of attorne"9s fees is an e8ce tion rather than the genera% r#%e@ th#s, there $#st !e co$ e%%ing %ega% reason to !ring the case &ithin the e8ce tions rovided #nder Artic%e 00-8 of the Civi% Code to 5#stif" the a&ard.

 CASE ANAL&SIS PHILIPPINE NATIONAL CONSTRUCTION CORPORATION (PNCC) vs. APAC MARKETING CORPORATION (APAC) [G.R. No. 190957; Ju ! 5" #01$% I. PARTI<S INA6>A<+: a4 Phi%i ine Nationa% Constr#ction Cor oration . PNCC 3for !revit"4 . the Petitioner in the instant case . re resented !" Roge%io <s irit# and Ro%ando Macasaet . the *#"er of cr#shed !asa%t roc( !4 APAC Mar(eting Cor oration . APAC 3for !revit"4 . the Res ondent in the instant case . re resented !" Cesar M. 6ng, Br. . the Se%%er of cr#shed !asa%t roc( II. PRI6R PR6C<<+IN?S: a4 Regiona% Tria% Co#rt APAC fi%ed &ith the tria% co#rt a co$ %aint against PNCC for co%%ection of s#$ of $one" &ith da$ages. PNCC fi%ed a $otion to dis$iss, !#t the tria% co#rt denied the $otion to dis$iss. Th#s, PNCC fi%ed their ans&er. After the s#!$ission of the res ective re.tria% !riefs of the arties, tria% &as he%d. :o&ever, on%" %aintiff.a e%%ee resented its evidence. For their re eated fai%#re to attend the hearings, defendants.a e%%ants &ere dee$ed to have &aived the resentation of their evidence. 6n B#%" 1-, 0--1, the tria% co#rt rendered a +ecision in favor of APAC, ordering defendants 5oint%" and so%idari%" to a" act#a% da$ages, attorne"7s fees and cost of s#it. PNCC fi%ed a $otion for reconsideration. The tria% co#rt considered their c%ai$ of f#%% a"$ent of the rinci a% o!%igation, !#t sti%% it ordered the$ to a" %ega% interest of t&e%ve er cent 31024 er ann#$.

!4 Co#rt of A ea%s PNCC a ea%ed the decision of the RTC !efore the Co#rt of A ea%s. The a e%%ate co#rt ro$#%gated a +ecision affir$ing the assai%ed +ecision of the RTC, !#t s#!5ect to the $odification that defendant.a e%%ant PNCC is ordered to a" %ega% interest at si8 er cent 3124 er ann#$ on the rinci a% o!%igation. PNCC fi%ed a Motion for Reconsideration, &hich raised the %one iss#e of the ro riet" of the a&ard of attorne"9s fees in favor of res ondent, !#t it &as denied !" th Co#rt of A ea%s. III.T:<6RI<S 6F T:< PARTI<S: The Petitioner rests their case on Artic%e 00-8 of the Ne& Civi% Code of the Phi%i ines &hich rovides for the o%ic" that sho#%d g#ide the co#rts &hen a&arding attorne"9s fees to a %itigant. F#rther, their arg#$ents are !ased on the r#%ings of the S# re$e Co#rt on ear%ier cases &hich invo%ves the sa$e iss#e as the case at !ar. Res ondent, on the other hand, ho%ds on to their right to recover a"$ent of the de%ivered ite$s, da$ages, attorne"7s fees and %itigation e8 enses fro$ Petitioner as e$!odied in the Ne& Civi% Code of the Phi%i ines. IA. 6*B<CTIA<S 6F T:< PARTI<S: Res ondent APAC ra"s for a"$ent of the a$o#nt of P/80,091.8- ) %#s %ega% interest at the rate of not %ess than 12 $onth%", to start in A ri%, 1999 #nti% the f#%% o!%igation is co$ %ete%" sett%ed and aid,) a$ong others. F#rther, APAC ra"s for the a"$ent of da$ages and attorne"7s fees %#s cost of s#it. 6n the other hand, Petitioner see(s for the reversa% of the decision of the A e%%ate Co#rt a&arding the a"$ent ofattorne"7s fees in favor of Res ondent. A. C<D FACTS:
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In March 1998, Petitioner PNCC engaged the services of Res ondent APAC !" !#"ing aggregates $ateria%s fro$ APAC, for &hich the %atter had de%ivered and s# %ied good '#a%it" cr#shed !asa%t roc(. The arties had initia%%" agreed on the ter$s of a"$ent, &here!" PNCC &o#%d iss#e the chec( corres onding to the va%#e of the $ateria%s to !e de%ivered, or )Chec( *efore +e%iver",) !#t rior to the i$ %e$entation of the said a"$ent agree$ent, Petitioner re'#ested fro$ Res ondent a ,-.da" ter$ fro$ the de%iver" date &ithin &hich to a", &hich %atter acce ted. After $a(ing de%iveries #rs#ant to the #rchase orders and des ite de$ands !" APAC, PNCC fai%ed and ref#sed to a" and sett%e their overd#e acco#nts. A co$ %aint for co%%ection of s#$ of $one" &as fi%ed !" APAC ra"ing for a"$ent of the a$o#nt of P/80,091.8- ) %#s %ega% interest at the rate of not %ess than 12 $onth%", to start in A ri%, 1999 #nti% the f#%% o!%igation is co$ %ete%" sett%ed and aid,) a$ong others. AI. ISS;<: =hether or not the a&arding of attorne"7s fee to Res ondent APAC is ro er. AII. C6;RT :6>+IN?S AN+ FIN+IN?S: No. The a&arding of attorne"7s fee to Res ondent is not ro er. Artic%e 00-8 of the Ne& Civi% Code of the Phi%i ines states the o%ic" that sho#%d g#ide the co#rts &hen a&arding attorne"9s fees to a %itigant. As a genera% r#%e, the arties $a" sti #%ate the recover" of attorne"9s fees. In the a!sence on s#ch sti #%ation, this artic%e restrictive%" en#$erates the instances &hen these fees $a" !e recovered. In a%% cases en#$erated in said artic%e, the attorne"7s fees and e8 enses of %itigation $#st !e reasona!%e. The attorne"9s fees are not a&arded as a $atter of co#rse ever" ti$e a art" &ins. The Co#rt does not #t a re$i#$ on the right to %itigate. 6n occasions that those fees are a&arded, the !asis for the grant $#st !e c%ear%" e8 ressed in the decision of the co#rt. The Co#rt have consistent%" he%d that an a&ard of attorne"9s fees #nder Artic%e 00-8 de$ands fact#a%, %ega%, and e'#ita!%e 5#stification to avoid s ec#%ation and con5ect#re s#rro#nding the grant thereof. +#e to the s ecia% nat#re of the a&ard of attorne"9s fees, a rigid standard is i$ osed on the co#rts !efore these fees co#%d !e
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granted. :ence, it is i$ erative that co#rts c%ear%" and distinct%" set forth in their decisions the !asis for the a&ard thereof. It is not eno#gh that the co#rts $ere%" state the a$o#nt of the grant in the dis ositive ortion of their decisions. It !ears reiteration that the a&ard of attorne"9s fees is an e8ce tion rather than the genera% r#%e@ th#s, there $#st !e co$ e%%ing %ega% reason to !ring the case &ithin the e8ce tions rovided #nder Artic%e 00-8 of the Civi% Code to 5#stif" the a&ard. AII. RATI6 +<CI+<N+I: This Co#rt had the occasion to e8 o#nd on the o%ic" !ehind the grant of attorne"9s fees as act#a% or co$ ensator" da$ages: the %a& is c%ear that in the a!sence of sti #%ation, attorne"9s fees $a" !e recovered as act#a% or co$ ensator" da$ages #nder an" of the circ#$stances rovided for in Artic%e 00-8 of the Civi% Code. The genera% r#%e is that attorne"9s fees cannot !e recovered as art of da$ages !eca#se of the o%ic" that no re$i#$ sho#%d !e %aced on the right to %itigate. The" are not to !e a&arded ever" ti$e a art" &ins a s#it. The o&er of the co#rt to a&ard attorne"9s fees #nder Artic%e 00-8 de$ands fact#a%, %ega%, and e'#ita!%e 5#stification. <ven &hen a c%ai$ant is co$ e%%ed to %itigate &ith third ersons or to inc#r e8 enses to rotect his rights, sti%% attorne"9s fees $a" not !e a&arded &here no s#fficient sho&ing of !ad faith co#%d !e ref%ected in a art"9s ersistence in a case other than an erroneo#s conviction of the righteo#sness of his ca#se. The Co#rt e8 %ained the reason !ehind the need for the co#rts to arrive # on an act#a% finding to serve as !asis for a grant of attorne"9s fees, considering the d#a% conce t of these fees as ordinar" and e8traordinar": it is sett%ed that the a&ard of attorne"7s fees is the e8ce tion rather than the genera% r#%e@ co#nse%7s fees are not a&arded ever" ti$e a art" revai%s in a s#it !eca#se of the o%ic" that no re$i#$ sho#%d !e %aced on the right to %itigate. Attorne"7s fees, as art of da$ages, are not necessari%" e'#ated to the a$o#nt aid !" a %itigant to a %a&"er. In the ordinar" sense, attorne"7s fees re resent the reasona!%e co$ ensation aid to a %a&"er !" his c%ient for the %ega% services he has rendered to the %atter@ &hi%e in its e8traordinar" conce t, the" $a" !e a&arded !" the co#rt as inde$nit" for da$ages to !e aid !" the %osing art" to the revai%ing art". Attorne"7s fees as art of da$ages are a&arded on%" in the
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instances s ecified in Artic%e 00-8 of the Civi% Code. As s#ch, it is necessar" for the co#rt to $a(e findings of fact and %a& that &o#%d !ring the case &ithin the a$!it of these en#$erated instances to 5#stif" the grant of s#ch a&ard, and in a%% cases it $#st !e reasona!%e. As g%eaned a!ove, attorne"9s fees are not a&arded as a $atter of co#rse ever" ti$e a art" &ins. The Co#rt does not #t a re$i#$ on the right to %itigate. 6n occasions that those fees are a&arded, the !asis for the grant $#st !e c%ear%" e8 ressed in the decision of the co#rt. IE. +ISP6SITI6N:

The Co#rt ho%ds that the a&ard of attorne"9s fees !" the co#rt a '#o, as s#stained !" the a e%%ate co#rt, &as i$ ro er and $#st !e de%eted. To &it: =:<R<F6R<, the foregoing Petition is ?RANT<+. The assai%ed +ecision dated 9 B#%" 0--9 of the Co#rt of A ea%s in CA.?.R. CA No. 8880/ is M6+IFI<+, in that the a&ard of attorne"9s fees in the a$o#nt of PF-,--- as acce tance fee and P,,--- as a earance fee, in favor of res ondent APAC Mar(eting Incor orated, is here!" +<><T<+.