Scribd
Upload
113 views1 page

Prudential v. Equinox: CIAC Jurisdiction & Liability

This document summarizes a Supreme Court case regarding a construction dispute and surety bonds. It discusses that: - A construction company (J'Marc) was hired to build additional floors but failed to complete the project and violated the contract terms. - Surety bonds were issued by Prudential to guarantee payment and performance for the project. - When J'Marc defaulted, Equinox sued both J'Marc and Prudential for collection. - The Supreme Court ultimately ruled that the Construction Industry Arbitration Commission had proper jurisdiction over the case, as Prudential had participated in the arbitration proceedings. It also held Prudential and J'Marc solidarily liable, as Pr

Uploaded by

patriciasantosx
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
113 views1 page

Prudential v. Equinox: CIAC Jurisdiction & Liability

This document summarizes a Supreme Court case regarding a construction dispute and surety bonds. It discusses that: - A construction company (J'Marc) was hired to build additional floors but failed to complete the project and violated the contract terms. - Surety bonds were issued by Prudential to guarantee payment and performance for the project. - When J'Marc defaulted, Equinox sued both J'Marc and Prudential for collection. - The Supreme Court ultimately ruled that the Construction Industry Arbitration Commission had proper jurisdiction over the case, as Prudential had participated in the arbitration proceedings. It also held Prudential and J'Marc solidarily liable, as Pr

Uploaded by

patriciasantosx
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

16 Prudential v.

Equinox1  While a contract of surety is secondary to the principal obligation, the


G.R. No. 152505-06; September 13, 2007 surety’s liability to the creditor becomes direct, primary, and absolute
Sandoval-Gutierrez, J. once the principal debtor defaults.
 The surety assumes liability as a regular party to the undertaking and
Petitioners: PRUDENTIAL GUARANTEE and ASSURANCE, INC. their obligation becomes primary.
Respondents: EQUINOX LAND CORPORATION
Dispositive Portion:
Facts: “WHEREFORE, we DENY the petition. The assailed Decision of the Court of
 Equinox awarded a contract to J’Marc to build an additional 5 floors on Appeals (Third Division) dated November 23, 2001 in CA-G.R. SP No. 56491 and
Equinox’s building. CA-G.R. SP No. 57355 is AFFIRMED in toto. Costs against petitioner.”
 J’Marc submitted two bonds: 1) surety bond in the amount of P9.25Mto
guarantee payment and 2) performance bond in the amount of P7.4M. Both
issued by Prudential.
 J’Marc was unable to finish the building and violated terms of the contract.
o Failed to submit monthly progress billings, neglected to cover the
drainpipes, causing delay of the project
 Equinox filed for collection against JMarc and Prudential.
 Prudential filed a motion to dismiss contending that RTC has no jurisdiction
and the proper court is the Construction Industry Arbitration Commission
(CIAC) since the case involves a construction dispute.
 Equinox then filed a complaint before the CIAC, which favoured Equinox
and ordered JMarc and Prudential to pay P5.2M damages.
 CA affirmed but reduced liability to P4M. Prudential filed for review,
alleging that CIAC has no jurisdiction over the case since Prudential was not
a party to the construction agreements.

Issue/s:
1. W/N CIAC had jurisdiction over their case
2. W/N Prudential is solidarily liable with J’Marc

Held:
1. Yes, CIAC has jurisdiction as Prudential is estopped from questioning
such.
 Sec4 of EO1008 provides that CIAC acquires jurisdiction when the
parties voluntarily submits to arbitration.
 In the case at bar, Prudential submitted and actively participated in the
proceedings before the CIAC.
 They also argued in their motion to dismiss before the RTC that
jurisdiction is lodged with the CIAC.

2. Yes, Prudential and J’Marc are solidarily liable, as Prudential is a


surety.

1
Digest from A2020

You might also like