Case Digest (G.R. No. 174387)
Facts:
In BF Corporation vs. Werdenberg International Corporation, G.R. No. 174387, decided December 9, 2015 under the 1987 Constitution, petitioner BF Corporation, a Philippine construction firm, entered into a Construction Agreement with respondent Werdenberg International Corporation on November 26, 1994 to build a three-story meat processing plant and showroom office on Yakal Street, Makati City for ₱43,800,000.00, with completion set on April 7, 1995. Numerous delays ensued: removal of unforeseen concrete slabs and extra-soft soil conditions; a six-day suspension for a boundary dispute; revisions to the building plan requiring verbal instructions; a 31-day stop-work order due to lack of a Building Permit and ECC; and major change orders and additional works that extended construction until August 15, 1995. Respondent refused acceptance, citing deficiencies, and paid only ₱38,088,445.00. Petitioner sued in the Pasig RTC for the unpaid balance of ₱4,771,221.59, plus ₱141,944.93 for ...Case Digest (G.R. No. 174387)
Facts:
- Parties and Contract
- BF Corporation (Petitioner) and Werdenberg International Corporation (Respondent) executed a Construction Agreement for a three-story meat-processing plant and showroom in Makati City, at a contract price of ₱43,800,000. Completion and delivery date: April 7, 1995.
- Liquidated damages: ₱43,800 per day of delay. Retention fee: 10%. Guarantee: one-year repair of defects at contractor’s expense.
- Construction, Delays and Turnover
- Excavation stage (Nov 26, 1994–Feb 14, 1995): removal of unforeseen concrete slabs (30–40 days), soft soil stabilization (claimed 14 days; works plagued by broken equipment, manpower shortages).
- Boundary dispute suspension: 6 days.
- Permit issues: respondent failed to secure ECC, causing stop-work order (Feb 20–Mar 23, 1995; 31 days). Plan revision during excavation: verbal instructions led to delay (claimed 30 days); actual limited to 7 days by respondent.
- Post-April 7, 1995 additional/change works: respondent granted 60 days extension; petitioner claimed 130 days. Turnover on August 15, 1995; respondent withheld ₱3,066,000 as liquidated damages and paid only ₱38,088,445.
- Procedural History
- RTC: BF Corp. sued for unpaid balance (₱4,771,221.59), change-order expenses (₱141,944.93), and declaration of no basis for liquidated damages; RTC awarded full balance plus interest, attorney’s fees.
- CA (2006): modified RTC decision, imposed ₱3,066,000 liquidated damages (70 days), allowed repainting expenses (₱1,050,000) and 10% retention; net payable ₱717,450.75.
- SC Rule 45 petition: BF Corp. challenges CA’s factual findings on delays and computations, seeks reinstatement of RTC decision.
Issues:
- Whether BF Corp. was entitled to extensions of time beyond the 60 days granted by respondent for various causes of delay.
- Whether respondent validly imposed liquidated damages and in what amount.
- Whether respondent could recover expenses for repainting by a third contractor.
- Whether respondent properly withheld the 10% retention fee.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)