Rivelisa Realty, Inc. vs. First Sta. Clara Builders Corporation

The 15-day reglementary period for filing a motion for reconsideration is non-extendible, and a motion for extension of time to file such motion does not toll the running of the period, causing the judgment to become final and executory. A contractor who has performed works on a project may recover the reasonable value of services rendered under the principle of quantum meruit, and a party who has unconditionally agreed to reimburse a fixed amount after mutual termination of a contract cannot unilaterally renege on that promise by citing the other party's non-fulfillment of the terminated agreement's terms.

Rivelisa Realty, Inc. and First Sta. Clara Builders Corporation entered into a Joint Venture Agreement (JVA) on January 25, 1995 for the construction and development of a residential subdivision in Cabanatuan City. Under the JVA, First Sta. Clara was to assume horizontal development works on the remaining 69% undeveloped portion of the project, complete the same within twelve months, and initially spend ₱10,000,000.00 of its own resources before claiming additional funds from pre-sale of lots. Upon completion, 60% of the subdivided lots would be transferred to First Sta. Clara. The 1999 Internal Rules of the Court of Appeals governed the CA proceedings, as the 2009 Internal Rules had not yet been approved at the time.

On January 25, 1995, Rivelisa Realty, Inc. entered into a Joint Venture Agreement with First Sta. Clara Builders Corporation for the construction and development of a residential subdivision in Cabanatuan City. Under the JVA, First Sta. Clara was to assume horizontal development works on the remaining 69% undeveloped portion of the project owned by Rivelisa Realty and complete the same within twelve months from signing. Upon completion, 60% of the total subdivided lots would be transferred to First Sta. Clara. Since 31% of the project had been previously developed by Rivelisa Realty and assessed at an aggregate worth of ₱10,000,000.00, the parties agreed that First Sta. Clara should initially use its own resources in the same aggregate amount before it could start claiming additional funds from the pre-sale of the 31% developed lots. Forty percent of the cost of additional works not originally part of the JVA was to be shouldered by Rivelisa Realty, while 60% by First Sta. Clara.

During the course of the project, First Sta. Clara hired a subcontractor to perform the horizontal development work as well as additional works on the riprap and the elevation of the road embankment. After only two months of construction, First Sta. Clara ran out of funds, forcing Rivelisa Realty to shoulder part of the payment due to the subcontractor. First Sta. Clara manifested its intention to back out from the JVA and discontinue operations when Rivelisa Realty refused to advance any more funds until 60% of the project had been accomplished.

In a letter dated August 24, 1995, Rivelisa Realty agreed to release First Sta. Clara from the JVA and estimated its actual accomplishment at ₱4,000,000.00, which included payment to the subcontractor in the amount of ₱1,258,892.72 and cash advances amounting to ₱319,259.68. First Sta. Clara, however, insisted on a valuation of its accomplished works at ₱4,578,142.10, which, less the cash advances and subcontractor's fees, would leave a net reimbursable amount of ₱3,000,000.00 in its favor. After several exchanges, Rivelisa Realty agreed to reimburse First Sta. Clara the amount of ₱3,000,000.00, emphasizing in its letter dated October 9, 1995 that the amount was actually over and beyond its obligation under the JVA.

The reimbursable amount of ₱3,000,000.00 remained unpaid despite several demands. First Sta. Clara filed a complaint for rescission of the JVA against Rivelisa Realty before the RTC, claiming payment of damages for breach of contract and delay in the performance of an obligation. Rivelisa Realty asserted that it was not obligated to pay First Sta. Clara any amount at all, since the latter had failed to comply with its obligation to initially spend the equivalent of ₱10,000,000.00 on the project before being entitled to cash payments. The RTC dismissed the complaint and ordered First Sta. Clara to pay Rivelisa Realty ₱300,000.00 in actual expenses and damages and ₱50,000.00 in attorney's fees, finding that First Sta. Clara had first violated the JVA by stopping work due to its own lack of funds. The CA reversed, holding Rivelisa Realty liable for ₱3,000,000.00 and finding that the JVA had been terminated through mutual assent.

Rivelisa Realty received a copy of the CA decision on March 3, 2009, giving it until March 18, 2009 to file either a motion for reconsideration before the CA or a petition for review before the Supreme Court. Instead, on March 18, 2009, Rivelisa Realty filed a Motion for Extension of Time to File a Motion for Reconsideration, seeking a fifteen-day extension from March 18 to April 2, 2009. It thereafter filed its Motion for Reconsideration by registered mail on April 2, 2009. The CA denied the motion for extension on May 22, 2009, holding that the 15-day period is non-extendible, and noted without action the subsequently filed motion for reconsideration. On September 8, 2009, the CA denied the motion for reconsideration as filed out of time.

• Non-extendibility of the Period for Motion for Reconsideration: Petitioner argued that the CA erred in denying its motion for extension of time to file a motion for reconsideration and in treating its motion for reconsideration as filed out of time.
• Entitlement to Compensation: Petitioner maintained that it was not obligated to pay First Sta. Clara any amount, since the latter had failed to comply with its obligation under the JVA to initially spend ₱10,000,000.00 of its own resources before being entitled to cash payments.

• Finality of Judgment: Whether the CA erred in finding that the 15-day reglementary period for filing a motion for reconsideration cannot be extended, thereby rendering the CA decision final and executory.
• Quantum Meruit: Whether the CA erred in finding that First Sta. Clara is entitled to be compensated for the development works it had accomplished on the project.

• Finality of Judgment: No. The 15-day period for filing a motion for reconsideration is non-extendible under the Internal Rules of the Court of Appeals, and a motion for extension of time does not toll the running of the period, causing the judgment to become final and executory.
• Quantum Meruit: No. First Sta. Clara is entitled to compensation under the principle of quantum meruit for the reasonable value of works it accomplished, and Rivelisa Realty had unconditionally obligated itself to reimburse ₱3,000,000.00 after the JVA was mutually terminated.

• Finality of Judgment: The 1999 Internal Rules of the Court of Appeals, which governed the proceedings, expressly provide in Section 2, Rule 13 that the period for filing a motion for reconsideration is non-extendible. This rule traces to Habaluyas Enterprises vs. Japzon (1986), which prohibited motions for extension of time to file motions for new trial or reconsideration in all courts except the Supreme Court. The rule was restated in Rolloque vs. CA (1991), emphasizing that filing a motion for extension does not toll the 15-day period before a judgment becomes final and executory. Rivelisa Realty received the CA decision on March 3, 2009, giving it until March 18, 2009 to file either a motion for reconsideration or a petition for review. By filing instead a motion for extension on that date, it committed a fatal procedural error: the motion for extension did not toll the running of the period, and the CA decision became final on March 18, 2009. Once a decision attains finality, no court can exercise appellate jurisdiction to review it, and the losing party loses the right to question it.

• Quantum Meruit: Even setting aside the procedural bar, the CA's ruling on the merits was correct. Under the principle of quantum meruit, a contractor is allowed to recover the reasonable value of services rendered despite the lack of a written contract, in order to avoid unjust enrichment. The measure of recovery relates to the reasonable value of the services performed, premised on the equitable postulate that it is unjust for a person to retain any benefit without paying for it. It was undisputed that First Sta. Clara had performed works on the project valued at approximately ₱4,578,152.10; to deny payment entirely would result in unjust enrichment on the part of Rivelisa Realty. Moreover, the parties' correspondence showed that Rivelisa Realty had obligated itself to unconditionally reimburse First Sta. Clara ₱3,000,000.00 after the JVA had been terminated by mutual assent. Rivelisa Realty could not unilaterally renege on that promise by citing First Sta. Clara's non-fulfillment of the terms and conditions of the already-terminated JVA.

• Non-extendibility of the period for filing a motion for reconsideration — The 15-day reglementary period for filing a motion for new trial or reconsideration is non-extendible in all courts except the Supreme Court. A motion for extension of time to file a motion for reconsideration does not toll the running of the period, and the judgment becomes final and executory upon the lapse of the 15-day period. This doctrine was first laid down in Habaluyas Enterprises vs. Japzon and restated in Rolloque vs. CA. The Court applied it by holding that Rivelisa Realty's filing of a motion for extension on the last day of the reglementary period, rather than the motion for reconsideration itself, did not toll the period, rendering the CA decision final.

• Quantum meruit — Under this principle, a contractor is allowed to recover the reasonable value of the thing or services rendered despite the lack of a written contract, in order to avoid unjust enrichment. The measure of recovery should relate to the reasonable value of the services performed. The Court applied this doctrine to hold that First Sta. Clara, having performed works valued at approximately ₱4,578,152.10, was entitled to reimbursement of ₱3,000,000.00, as completely denying payment would result in unjust enrichment on the part of Rivelisa Realty.

• Finality of judgments — The failure to perfect an appeal in the manner and within the period fixed by law renders the decision sought to be appealed final, with the result that no court can exercise appellate jurisdiction to review the decision. The Court applied this doctrine to hold that because the CA decision had become final and executory due to the lapse of the reglementary period, the remedy of review before the Supreme Court had already been lost.

• "Beginning one month after the promulgation of this Resolution, the rule shall be strictly enforced that no motion for extension of time to file a motion for new trial or reconsideration may be filed with the Metropolitan or Municipal Trial Courts, the Regional Trial Courts, and the Intermediate Appellate Court. Such a motion may be filed only in cases pending with the Supreme Court as the court of last resort, which may in its sound discretion either grant or deny the extension requested." — This passage, quoted from Habaluyas Enterprises vs. Japzon, articulates the foundational rule that motions for extension of time to file motions for reconsideration are prohibited in all courts except the Supreme Court, and is the controlling authority for the procedural ruling in this case.

• "Quantum meruit means that, in an action for work and labor, payment shall be made in such amount as the plaintiff reasonably deserves." — This passage provides the canonical formulation of the quantum meruit principle as applied in Philippine jurisprudence, defining the equitable basis for recovery of the reasonable value of services rendered.

• "Rivelisa Realty cannot unilaterally renege on its promise by citing First Sta. Clara's non-fulfillment of the terms and conditions of the terminated JVA." — This passage states the ratio decidendi on the substantive issue: once a contract has been mutually terminated and a party has unconditionally agreed to reimburse a specific amount, it cannot avoid that obligation by invoking the other party's non-compliance with the terms of the terminated agreement.

• Habaluyas Enterprises vs. Japzon, 226 Phil. 144 (1986) — Controlling precedent establishing the rule that no motion for extension of time to file a motion for new trial or reconsideration may be filed with the MTCs, RTCs, and the Intermediate Appellate Court; such motions are permitted only before the Supreme Court. The Court applied this rule to hold that Rivelisa Realty's motion for extension before the CA was prohibited and did not toll the reglementary period.

• Rolloque vs. CA, 271 Phil. 40 (1991) — Followed precedent restating the Habaluyas doctrine, emphasizing that the 15-day period for filing a motion for new trial or reconsideration is non-extendible and that a motion for extension does not toll the period before a judgment becomes final and executory.

• Building Care Corporation/Leopard Security & Investigation Agency vs. Macaraeg, G.R. No. 198357, December 10, 2012 — Cited for the proposition that a party who fails to question an adverse decision by not filing the proper remedy within the prescribed period loses the right to do so as the decision becomes final and binding.

• Uy vs. CA, 349 Phil. 1002 (1998) — Cited for the doctrine that failure to perfect an appeal in the manner and within the period fixed by law renders the decision final, with the result that no court can exercise appellate jurisdiction to review it.

• H.L. Carlos Construction, Inc. vs. Marina Properties Corp., 466 Phil. 182 (2004) — Cited for the principle of quantum meruit, allowing a contractor to recover the reasonable value of services rendered to avoid unjust enrichment.

• Section 2, Rule 13, 1999 Internal Rules of the Court of Appeals — Provides that the motion for reconsideration shall be filed within the period for taking an appeal and that the period for filing a motion for reconsideration is non-extendible. Applied to hold that Rivelisa Realty's motion for extension was prohibited and did not toll the reglementary period.

• Section 3, Rule 4, 1999 Internal Rules of the Court of Appeals — Provides that the appeal shall be taken within fifteen (15) days from notice of the judgment or final order appealed from. Applied to determine that Rivelisa Realty's last day to file a motion for reconsideration or petition for review was March 18, 2009.

• Section 2, Rule 45, Rules of Court — Provides that the Supreme Court may, for justifiable reasons, grant an extension of thirty (30) days within which to file a petition for review. Distinguished from motions for extension to file a motion for reconsideration, which are prohibited in all other courts.

• Section 10, Rule 51, Rules of Court — Provides for the entry of judgments and final resolutions when no appeal or motion for new trial or reconsideration is filed within the time provided. Cited in the CA's Internal Rules as the basis for entry of final judgments.

Antonio T. Carpio (Chairperson), Arturo D. Brion, Mariano C. Del Castillo, and Jose Portugal Perez concurred. No separate concurring opinions were written.