Republic of the Philippines

REGIONAL TRIAL COURT

7th Judicial Region
Branch 61
Bogo, Cebu

OSCAR GUARISMA
Plaintiff,

-versus- CIVIL. CASE NO. BOGO-01652

SPOUSES BURKHARD FREUND and

MARIA CRISTINA A. FREUND,
Accused.
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ANSWER WITH COUNTERCLAIM

DEFENDANTS, through counsel and unto this Honorable Court, most

respectfully state:

ADMISSIONS

Defendants admits the following allegations in the complaint, to wit:

1.0 In paragraphs 1, 2, 4 & 5 in their entirety.

1.2 In paragraph 6 only with respect to the amount of contract price, the
agreed terms of payment and the downpayment of P 780,000.00 given by
defendants to plaintiff;

1.3 In paragraph 9 in its entirety;

1.4 In paragraph 11 only with respect to the allegation that the project was
contracted on a “Pakyaw basis”;

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 1.5 In paragraph 13 only with respect to the request for additional cash
advance in the amount of P 150,000.00 which was not paid/given;

1.6 In paragraph 16 as to its entirety;

1.7 In paragraph 18 only with respect to the presence of workers;

1.8 In paragraph 24 only with respect to Annex “G”;

DENIALS

DEFENDANTS deny the following allegations in plaintiff’s complaint due

to lack of personal knowledge or information sufficient to form a belief as to their
truthfulness and veracity, to wit:

2.0 In paragraphs 3, 7, 8, 10, 12, 15, 17, 19, 20, 21, 22, 23, 25, 26, 28, 29, 30, 31,
32, 33, 34, 35, 36, 37 and 38 in their entirety;

Defendants likewise specifically deny each material allegation in the

following paragraphs of the complaint, to wit:

2.1 In paragraph 6 with respect to the rest of the allegations which are not
admitted (please refer to para. 2);

2.2 In paragraph 11 with respect to the rest of the allegation which are not
admitted (please refer to para. 4);

2.3 In paragraph 14 with respect to the allegation that Mrs. Freund readily
agreed to the suggestion for a temporary work stoppage;

2.4 In paragraph 18 with respect to the rest of the allegation which are not
admitted (please refer to para. 7);

2.5 In paragraph 24 with respect to the rest of the allegation which are not
admitted (please refer to para. 8);

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 AFFIRMATIVE ALLEGATIONS

In support of the Specific Denials posited above as well as the Affirmative

Allegations propounded hereunder, Defendants hereby respectfully states:

3.0 It must be emphasized at the outset that contrary to the claim of the
plaintiff that “he prefers to provide the construction materials and
render supervisory functions only” with respect to the initial project
(Construction of 2 units, 2 storey building at Hippocampus Beach), the
truth of the matter is that plaintiff was very actively offering his alleged
excellent engineering and construction skills and was more than willing
to handle the project on a “pakyaw basis”. There was no prodding and
insistence on the part of the defendants to compel the plaintiff to carry
out the project, as the plaintiff would want to portray. It is of common
knowledge within the place where plaintiff resides as well as in the
neighboring towns that plaintiff is and has always been a contractor of
various infrastructure projects. Indeed, the claim of plaintiff that he is
not interested to carry out the project is highly against normal actuations
for a person with engineering background and a self-confessed
businessman. His claim of disinterest to carry out the project is further
negated by his ready acceptance of additional projects agreed by the
parties.

3.1 The original contract for the construction of a 2 units, 2 storey building
with an agreed contract cost of P 2,600,000.00 was approved for
implementation and signed by defendant/owner on May 21, 2005 and
was agreed to be completed in 4 to 5 months. However, in a blatant act
of fakery and misrepresentation, plaintiff claimed that additional works
were ordered by defendant, Mrs. Freund, allegedly on May 25, 2005
which is barely four (4) days after the original contract was signed.
Plaintiff would further try to make it appear that the additional works,
which plaintiff wantonly quoted at a whooping total amount of P
1,127,900.00, was at the instance of the defendant Mrs. Freund as alleged
in plaintiff’s complaint. But try as he might, plaintiff only succeeded in
exposing the sham and fakery of such alleged additional works even as

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herein defendants vehemently deny having ordered, much less, seen
such additional work. Neither will defendants admit having signed any
document relative thereto. For one, the complainant does not even
bother to explain in his complaint why is there a need for additional
works on the building and why the same was discovered barely four (4)
days after the contract for such building project was signed and
approved. It is worth emphasizing here that complainant had all the
time to examine the plans of the building to determine such need for
additional works and have the same included in the final contract before
finally submitting his Bill of Materials and Cost Estimates. For another
thing, complainant made it appear that it was Mrs. Freund who ordered
the additional works. Yet how could this be? How can such additional
works be ordered by somebody who has no technical or engineering
background or expertise to determine the structural or architectural
necessity of such additional works? Mrs. Freund cannot even explain
nor determine what a lintel beam is and what is its purpose. Yet, in a
brazen act of misrepresentation, herein complainant would like to make
it appear that the additional works were upon the imprimatur of the
defendant, Mrs. Freund.

Moreover, a careful examination of the original plans as provided to

plaintiff where he based his cost computations, would readily yield to
the fact that the quarter round verandas costing about P 120,000.00 as
claimed by plaintiff in his complaint, is already indicated in the detailed
plans and consequently, thus, included in the original contract works.
However, in another act of shameless misrepresentation, plaintiff
provided only as Annex “A” to his complaint, the photocopy of the
perspective of the building which unfortunately does not reflect the
quarter round verandas. Yet, plaintiff or any contractor worth his salt
for that matter, knew fully well that the real plan, which is the basis for
cost estimates and work prosecution is not the perspective but the
detailed plans accompanying thereto and which plans already indicated
a quarter round veranda, thus, negating the necessity of the additional
works. Hereto attached and marked as Annex “1” is a photocopy of the
2nd floor plan of both cottages depicting the quarter round verandas.

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3.2 The contract for the construction of the fresh water system project was
never a done deal as plaintiff would like to make it appear. This is
another blatant misrepresentation made by plaintiff because the truth of
the matter is that what was only discussed was the possibility of
constructing the project. It was even plaintiff himself who suggested to
conduct first a test drilling to determine whether fresh water is available
before finally agreeing on the project. As it is, after going down 38 feet
for the test drilling, which was conducted by another person and not by
the plaintiff, but still producing negative results, the fresh water project,
was accordingly shelved and did not materialize as matter of course.
Granting arguendo that indeed plaintiff and defendant did agree on the
project as well as on the cost, it is highly ridiculous for plaintiff to claim
for payment for a project which was never implemented in the first
place. It is even doubly ridiculous for plaintiff to claim payment for the
total project cost when it was not he who conducted the test drilling,
even if the cost of such work is included in the total project estimates.

3.3 Defendants admit to have agreed with plaintiff for the undertaking of
some other projects sometime in the early part of October 2005,
consisting of the a) renovation of concrete wall; b) facelifting of the old
restaurant and bar; and c) construction of staff’s quarter with storage
and kitchen. The total additional cost for the project as agreed is P
309,000.00 for the concrete wall renovation, P 120,000.00 for the
restaurant and bar and P 430,000.00 for the staff’s quarter with storage
and kitchen, respectively for a total additional cost of P 859,000.00.

In another vile attempt to misrepresent and misled, plaintiff would like

to make it appear that the aforementioned projects were completed and,
thus, need to be fully paid as per his claim, when in truth and in fact
they were not. Annex “2” hereto attached are photographs of one
particular on-going project taken last January 2006 which readily shows
that the said projects is nowhere near completion yet. A very generous
determination of the percentage completion of the projects done by
defendant sometime in January 2006 reveals the fact that only the
renovation of the concrete wall was completed while the restaurant and

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 the staff’s quarter and kitchen only has a 40% and 25% accomplishment,
respectively.

3.4 Defendants vehemently deny plaintiff’s claim that he has deposited at

the former’s premises some construction materials and supplies and
further deny having signed an inventory of the same. This is another
one of those fraudulent machinations of the plaintiff, the truth of the
matter being that when defendant and the remaining few of his workers
left the project site in late December 2005, after failing to make another
cash advance from defendant, Mrs. Freund, they brought with them all
usable construction materials. Since then, plaintiff never returned to the
site but only showed up on January 27, 2006 to present his impertinent
and ridiculous billing for the project. While admittedly some materials
were left, these consist only of the following: a) rotten pile of nipa
shingles; b) about 50 bags of coarse gravel; c) a pile of construction wood
(partly rotten); d) about 100 pieces of concrete hollow blocks (CHB); e) a
few water pipes; and f) a huge pile of garbage.

SPECIAL and AFFIRMATIVE DEFENSES

By way of special and affirmative defenses, defendants hereby repleads

the foregoing allegations in the preceding paragraphs and further avers that:

4.0 Plaintiff has no cause of action. – Defendants submits that plaintiff

has no cause of action against them. If at all, it was plaintiff who is
guilty of breach of contract. It was plaintiff who failed to deliver his
obligations with respect to the various construction contracts he had
entered into with defendants, as plaintiff was not able to complete
the projects on time and at the desired quality/specifications.
Worse, plaintiff completely abandoned the uncompleted projects
leaving the defendants in a great mess and under financial losses
for the latter had already accepted bookings to their resort from
foreign tourists, which they have to cancel. Those projects that
were partially completed also have various construction defects even as

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 some materials used for construction were of substandard quality
contrary to what was agreed. Even worse, plaintiff erred in the layout of
one of the buildings, causing it to overlap the compound boundary and
encroached into another’s area. This will eventually force defendants to
buy that portion of the encroached property from their neighbor. Annex
“3” hereto attached, summarizes the construction defects and/or
deficiencies noted for each particular project as determined defendants.
By reason of plaintiff’s abandoning the projects without any justifiable
reason and despite having been overpaid, defendants were forced to
continue and complete the projects themselves as quickly as possible to
cover increasing cost overruns and financial losses due to cancelled
bookings. Clearly, the above situation is indicative of only one thing:
that it is plaintiff who committed breach of contract and not the
other way around. Plaintiff, therefore, has no cause of action against
the defendants since it was plaintiff himself, by his unjustified act of
abandoning the project, who caused the eventual justified rescission of
the contracts at the great loss and expense of the defendants. Indeed, by
committing such breach, plaintiff may not be allowed to seek succour
from the courts in conformity with the legal parlance which states that:
HE WHO COMES TO COURT, MUST COME WITH CLEAN HANDS.”

4.1 Plaintiff is grossly overpaid. – Defendants submit that it has grossly

overpaid the plaintiff for the works the latter had performed and is
therefore not entitled anymore to any additional payment. In his
complaint, plaintiff unilaterally claimed for the remaining balance for
the total contract cost after deducting the payments he allegedly
received. The manner of presenting his claims is irresponsible at best,
and misleading at worst. Plaintiff never bothered to indicate the
percentage of completion for the projects he undertook, thus, giving the
impression that he had completed the project and all that has to be done
is to effect payment on him. Nothing of such sort is, of course, farther
from the truth. For verily, not all of the projects under contract were
near the desired 100% accomplishment. Thus, the Civil Code principle
on quantum meruit is definitely applicable in the instant case, this even if
we subscribe to plaintiff’s contention that defendants have committed
breach of contract (which contention have been vigorously denied and

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 argued as per defendants’ ratiocination in the preceding paragraph). As
it is, while some of the projects were substantially completed, still many
are nowhere near completion and must, thus, be determined as to its
equivalent worth, pro rata. Also, plaintiff cannot claim payment for
other projects such as the fresh water system, since even plaintiff himself
admitted that these projects did not push through. Further, some of the
alleged additional works were contentious enough and were
vehemently denied for being outrageously fictitious and improbable,
thus, there costing must further be scrutinized and may not be taken
fully, hook, line and sinker.

Ergo, even granting, for the sake of argument, but not admitting that
plaintiff’s computation as to the total amount received for cash advances
as presented in paragraph 13 of his complaint is accurate, at the same
time taking into account the above considerations and the computation
of percentage accomplishment determined jointly by plaintiff and
defendant, hereto attached and marked as Annex “4”, the same would
readily yield to the fact that indeed there was overpayment made by
defendants to plaintiff. Perforce, plaintiff’s claim for payment is
definitely negated as defendants refusal to give plaintiff additional
payment is with clear legal and justifiable grounds.

OPPOSITION TO APPLICATION FOR ISSUANCE

OF A WRIT OF PRELIMINARY ATTACHMENT

In support to the opposition for the application for the issuance of a writ
of preliminary attachment, defendants hereby replead the above allegations and
further aver that:

5.0 Defendants have not committed any fraud and have not incurred any
obligation as against the plaintiff to warrant the issuance of a writ of
preliminary attachment as already propounded in the above
ratiocinations that repeating the same would be bordering on the edge of
monotony. Suffice it to say that herein defendants have religiously
complied with their obligation to effect progress payment to plaintiff,
which eventually resulted in overpayment. If at all, it was plaintiff

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 himself who committed fraud in his contractual obligations by failing to
complete the contracted projects and by using substandard materials in
the works resulting to visible construction defects. Plaintiff’s eventual
abandonment of the project illustrates more eloquently the fraud
committed by him against the defendant.

5.1 Corollary to the above contention of defendants, there is no cogent nor

compelling reason for the issuance of the writ of preliminary attachment
considering that the plaintiff’s claim is, by latest accounting, far
exceeded by the payment made by defendant which need to be refunded
by plaintiff. Simply put, there is no showing of a clear obligation on the
part of defendants that would warrant attachment of the latters’
property as security to satisfy judgment.

5.2 Considering the nature of the instant case where the allegations of the
parties would seem to negate each other’s claims and defenses the (e.g.
plaintiff claims for non-payment while defendant claims there was
overpayment) the issuance of a writ of preliminary attachment will be a
form of a pre-judgment of the merits of the case in favor of the plaintiff
and against the defendants. While it is true that a writ of preliminary
attachment may be sought and issued ex parte without the requisite
notice and hearing, the same may not be issued if in the process it will
tantamount to a pre-determination of the merits of the case resulting in
the upholding one’s contention against the other, but without the benefit
of trial yet.

COMPULSORY COUNTERCLAIM

The allegations contained in the preceding paragraphs are hereby

repleaded herein by reference and, in addition thereto, defendant further avers
that:

6.0 By reason of plaintiff’s insistent demands for additional payments

coupled with the defendants trust and confidence reposed in him, which
made the latter to always accede to plaintiff’s request, and thereafter
because plaintiff fraudulently refused to continue and complete the

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 project, defendants grossly overpaid plaintiff for which plaintiff should
be made to pay actual damages by way of a refund in the amount of
EIGHT HUNDRED FIFTY EIGHT THOUSAND SIX HUNDRED
FIFTY PESOS (P 858,650.00);

6.1 Plaintiff knew very well the sham and infirmity of its cause of action
against the defendants, yet he shows the gall and temerity to file this
unwanted suit causing so much mental anguish, sleepless nights,
wounded feelings and serious anxiety on the part of the defendants for
which plaintiff should be made to pay moral damages in the amount of
FOUR HUNDRED THOUSAND PESOS (P 400,000.00);

6.2 In order to deter others who are similarly situated from filing any such
unwarranted and malicious suit, intended only to harras, plaintiff must
be condemned to pay as exemplary damages the amount of TWO
HUNDRED THOUSAND PESOS (P 200,000.00);

6.3 In dragging defendants into this unwarranted and malicious suit,

defendants are constrained to engage the services of undersigned
counsel to defend their cause forcing them to incur Attorney’s Fees in
the amount of FORTY THOUSAND PESOS (P 40,000.00) and
additional litigation expenses of not less than THIRTY THOUSAND
PESOS (P 30,000.00) for which plaintiff must be made to pay;

PRAYER

WHEREFORE, foregoing premises considered, it is most respectfully

prayed of this Honorable Court to render judgment:

1) DISMISSING the instant complaint for lack of merit;

2) To condemn the plaintiff to pay the following:

a) EIGHT HUNDRED FIFTY EIGHT THOUSAND SIX HUNDRED

FIFTY PESOS (P 858,650.00) as actual damages by way of refund
for gross overpayment;

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 b) FOUR HUNDRED THOUSAND PESOS (P 400,000.00) as moral
damages;

c) TWO HUNDRED THOUSAND PESOS (P 200,000.00) as

exemplary damages;

d) SEVENTY THOUSAND PESOS (P 70,000.00) as Attorney’s Fees

and other litigation expenses.

Other reliefs as are just and equitable under the premises are likewise
prayed for.
Cebu City, Philippines, December 29, 2006.

JOSE MARIE N. POBLETE

Counsel for Respondents
#835 Panagdait Subdivision
Kasambagan, Cebu City
PTRNo.0318551/CebuCity/01-24-06
IBP No. 670230/Cebu City/01-24-06
Roll No. 47893

Copy Furnished:

Atty. RODOLFO Y. CABRERA/

Atty. HELEN CATACUTAN-ACAS
Room 206 Jesever Building,
Fuente Osmena, Cebu City

EXPLANATION

Service to plaintiff’s counsel is done by registered mail due to distance and lack
of personnel to effect personal delivery.

JOSE MARIE N. POBLETE

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 VERIFICATION AND CERTIFICATION

We, BURKHARD FREUND and MARIA CRISTINA FREUND, after having

been duly sworn to in accordance with law, hereby depose and state:

That we are the defendants of the above-captioned case; that we have caused
the preparation and filing of the foregoing Answer with Compulsory Counterclaim;
that we have read the contents thereof and the same are true and correct of our
personal knowledge.

We hereby certify that no other action or proceeding involving the same

issues raised in the Answer have been filed with the Supreme Court, the Court of
Appeals, or any other court, tribunal or agency and that should we learn thereafter
that there is such pending similar action, we undertake to report the same to the
Honorable Court within (5) days from knowledge thereof.

In witness whereof, we have hereunto affix our respective signatures this ___
day of ______________ 2006 in Cebu City, Philippines.

BURKHARD FREUND MARIA CRISTINA A. FREUND

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 Affiant Affiant
Passport No. _____________ CTC No. _____________
Issued at _________________ Issued at _____________
Issued on ________________ Issued on ____________

SUBSCRIBED AND SWORN TO BEFORE ME, this ____ day of

______________ 2006, affiants exhibiting to me their Passport and Community Tax
Certificates, respectively as detailed below their respective names.

Doc. No. ______;

Page No. ______;
Book No. _____;
Series of 2006

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