Unilateral rescission of a contract is subject to judicial determination. Contractual stipulations should be interpreted together. Ambiguous ones should be construed to conform to the sense that would result when all the provisions are comprehended jointly. Moreover, doubts should be settled in favor of the greatest reciprocity of interests.

Before the Court is a Petition for Review under Rule 45 of the Rules of Court, seeking the reversal of the May 20, 1998 Decision of the Court of Appeals1 [First Division composed of J. Portia Aliño-Hormachuelos, ponente; JJ Arturo B. Buena (now a member of the Supreme Court) and Buenaventura J. Guerrero, members.] (CA) in CA-GR CV No. 45009, which affirmed the Regional Trial Court (RTC) of Pasig City (Branch 154). The assailed Decision disposed as follows:2 [CA Decision, p. 38.]

In its assailed Decision, the Court of Appeals relates the facts of this case as follows:3 [Ibid., pp. 1-4; rollo, pp. 30-33.]

The CA ruled that the Contract and its amendments impelled petitioner to accept delivery of the washed 1.5-inch gravel from the respondent. The figures in the "Scope of Services" provision were interpreted to mean the minimum quantities to be delivered to the petitioner. The petitioner received a total of 8,162.43 cubic meters of washed 1.5-inch gravel from the respondent and 9,978.06 cubic meters from other sources. Hence, the petitioner actually utilized only 18,140.49 cubic meters of aggregates of this specification, which was only about half of the stipulated 35,000 cubic meters. Clearly, it breached the Contract when it refused to accept delivery of the 17,000 cubic meters of washed 1.5-inch gravel from the respondent.

Because of this breach, the respondent was entitled to lucrum cessans, computed by deducting the production cost from the agreed cost per cubic meter of aggregates

The outstanding obligation of the petitioner to the respondent was the difference between the subcontractor’s quitclaim minus the penalty charges for outsourcing aggregates, which respondent incurred for its failure to deliver. The amount was based on the Quitclaim presented by petitioner and the undisputed Backcharge Invoice No. 354 presented by respondent. Sc-slx

The CA denied the petitioner’s prayer for damages arising from the delays in delivery, because respondent had already compensated or paid for such delays. The appellate court rejected petitioner’s contention that the respondent committed bad faith by entering into a contract that it was financially incapable of fulfilling, inasmuch as this issue had not been raised before the trial court.

Hence, this Petition.4 [This case was deemed submitted for decision upon receipt by this Court of the Memorandum for Mars Construction Enterprises, Inc. on October 11, 1999. This Memorandum was signed by Atty. Luis V. Diores of Diores Law Offices (rollo, p. 93).]

In its Memorandum, the petitioner submits the following "issues" for the Court’s consideration:5 [Rollo, p. 75; the Memorandum for the petitioner was signed by Government Corporate Counsel Jun N. Valerio, Deputy Government Corporate Counsel Elpidio J. Vega, Asst. Government Corporate Counsel Efren B. Gonzales and Government Corporate Attorney IV Manuel V. Fernandez (rollo, p. 75).]

The Petition has no merit.

Petitioner contends that it was not under any obligation to accept 17,000 cubic meters of washed 1.5-inch gravel, because the delivery was made after the actual aggregate requirement of the project had already been fully satisfied, and after respondent had defaulted on its contractual undertakings.

Petitioner adds that the respondent had already delivered aggregates, the combined volume of which was about 45 percent over and above that required in Article I, Amendment 2 of the Contract. Hence, the petitioner refused to accept the "excess" delivery in issue.

This contention is incorrect. The various stipulations in a contract should be interpreted together. Ambiguous ones should be so construed as to conform to the sense that would result if all the provisions are comprehended jointly.6 [See Article 1374, Civil Code.] The "Scope of Services" provision in Amendment 2 stipulated the delivery of 70,000 cubic meters of concrete aggregates consisting of approximately 17,500 cubic meters of washed sand, approximately 17,500 cubic meters of washed .75-inch gravel, 35,000 cubic meters of washed 1.5-inch gravel, and "sub-base 2" minus crusher run. Clearly, at least 35,000 of the 70,000 cubic meters of concrete aggregates that the respondent was supposed to deliver to the petitioner should be washed 1.5-inch gravel. The trial court correctly explained: M-issdaa

Besides, the stipulation would be too burdensome to the respondent if, as petitioner insists, the breakdown of the specified aggregates were interpreted as mere estimates of the project requirements; the respondent would have then been uncertain as to how much it should deliver. Doubts in contracts should be settled in favor of the greatest reciprocity of interests.8 [Article 1378, Civil Code.] Accordingly, these figures, as held by the CA, should be deemed the minimum amounts to be procured and delivered. In this way, both parties would know exactly how much to demand from each other to be able to comply with their respective obligations.

PNCC Project Director H. R. Taylor’s letter of May 17, 1984 informed the respondent of the final quantities of concrete aggregates to be delivered, with the advice that no other deliveries would be accepted. Hence, the petitioner asserts that, after that advice, it was no longer bound to accept any further deliveries from the respondent. Sd-aad-sc

We disagree. Such advice is not a sufficient justification for refusing delivery. The only clause on delivery is Stipulation 2 of Amendment 2, which states that "[t]he FIRST PARTY shall deliver a minimum of SIX THOUSAND (6,000) [c]ubic meters of combined concrete aggregate per month until the entire requirements of the SECOND PARTY to complete the Philphos Project shall have been satisfied."9 [Exhibit "C-2," RTC records, p. 42.] The Contract did not authorize the petitioner to limit, by means of a unilateral advice, the quantity of aggregates that may be delivered. Although there were several occasions when the petitioner advised the respondent on the quality and the quantity of concrete aggregates to be delivered, Mr. Solomon Chu (general manager of respondent) testified that the giving of advice did not become the practice between them.10 [TSN, December 19, 1985, pp. 6-9.]

By saying that the quantity specified in the letter was its last order, petitioner unilaterally amended its Contract with the respondent. The act of treating a contract as cancelled or rescinded on account of infractions by the other contracting party is always provisional;11 [University of the Philippines v. De los Angeles, 35 SCRA 102, 107, September 29, 1970.] that is, contestable and subject to judicial determination.12 [UP v. De los Angeles, supra.] Judicial action is necessary for its rescission in order to afford the other party an opportunity to be heard13 [UP v. De los Angeles, supra; Ocejo, Perez & Co. v. International Banking Corp., 37 Phil. 631, 643, February 14, 1918; Republic v. Hospital de San Juan de Dios, 84 Phil. 820, 827, October 31, 1949; Coronel v. Court of Appeals, 263 SCRA 15, 35, October 7, 1996; and Adelfa Properties, Inc. v. Court of Appeals, 240 SCRA 565, 588, January 25, 1988.] and to determine if the rescission was proper.14 [Pangilinan v. Court of Appeals, 279 SCRA 590, 597, September 29, 1997.] When the herein petitioner resolved or rescinded the Agreement without previous court action, it proceeded at its own risk. Only the final judgment of a court will conclusively and finally settle whether such recourse was correct in law.

Petitioner avers that respondent was already in default when the former refused the latter's delivery of 17,000 cubic meters of washed 1.5-inch gravel. Hence, its refusal was justified.

We are not persuaded. The contract specifically provided that if the respondent failed to deliver the required aggregates, the petitioner could procure them from other sources so as not to jeopardize the entire construction project. The records reveal that on several occasions, petitioner purchased concrete aggregates from other suppliers.15 [Exhibit "I-1," Folder of Exhibits.]

Pursuant to Paragraph 3 of Amendment 2, petitioner imposed penalties for the incremental cost of procuring materials from other sources, which respondent willingly paid in the sum of P1,577,000. Since petitioner was already compensated for respondent's defaults, such defaults cannot be considered as a substantial breach that justified the rescission of the Contract and the refusal to accept the questioned delivery.16 [Power Commercial and Industrial Corporation v. Court of Appeals, 274 SCRA 597, 608, June 20, 1997; Siska Dev’t. Corp. v. Office of the President of the Phil., 231 SCRA 674, 681, April 22, 1994.]

Furthermore, when the petitioner exercised its options in case of delay or default on the part of the respondent, the former waived its right to rescind and was thus estopped from rescinding the Contract by reason of such short delivery.17 [Siska Dev’t. Corp. v. Office of the President, supra; Angeles v. Calasanz, 135 SCRA 323, 332, March 18, 1985.]ScmisÓ

In light of the foregoing, the CA correctly held that petitioner was under obligation to accept and to pay for the 17,000 cubic meters of washed 1.5-inch gravel delivered by the respondent.18 [CA Decision, p. 6; rollo, p. 35.] As found by the CA, the petitioner procured only a total of 18,140.49 cubic meters of washed 1.5-inch gravel from the respondent and from other suppliers (9,978.06 and 8,162.43 cubic meters, respectively). Thus, the respondent had the prerogative to supply, and the petitioner was bound to accept, 16,859.51 (or approximately 17,000) cubic meters of 1.5-inch gravel. Parties to a contract are bound to the fulfillment of what has expressly been stipulated.19 [Romero v. Court of Appeals, 250 SCRA 223, 233, November 23, 1995; Pangilinan v. CA, supra, p. 599.]

Petitioner avers that the profits which respondent expected to derive from the Agreement were purely speculative, and that the trial and the appellate courts erroneously believed Mr. Chu’s bare testimony on said profits. MisÓ sc

We are not persuaded. Whether the respondent failed to realize profits -- and if so, how much -- and whether the judgment was supported by the evidence presented by it are factual in nature. Factual findings of the trial court, especially when affirmed by the Court of Appeals, as in this case, are binding and conclusive on the Supreme Court. It is not the function of this Court to reexamine the lower courts’ findings of fact.20 [Sps. Lagandaon v. Court of Appeals, GR Nos. 102526-31, May 21, 1998; National Steel Corporation v. Court of Appeals, GR No. 112287, December 12, 1997.] While there are exceptions to this rule,21 [Fuentes v. CA, 268 SCRA 708-709, February 26, 1997.] petitioner has not shown its entitlement to any of them.

WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against petitioner.

Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur. MisÓ spped