Case Digest (G.R. No. 198849) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Camp John Hay Development Corporation v. Charter Chemical and Coating Corporation (G.R. No. 198849, August 7, 2019), petitioner Camp John Hay Development Corporation, the investment arm of a consortium constructing Camp John Hay Manor in Baguio City, entered into a Contractor’s Agreement in January 2001 with respondent Charter Chemical and Coating Corporation. Under the agreement, Charter Chemical would perform interior and exterior painting of Unit 2E for a contract price of ₱15,500,000.00, inclusive of two studio‐type units in Camp John Hay Suites to be offset against the balance. Charter Chemical selected Units 102 and 104 in the second phase. The contract price was later reduced to ₱13,239,734.16, of which petitioner paid ₱7,339,734.16 in cash, leaving ₱5,900,000.00 to be settled by the transfer of the two units. Respondent completed the painting works in 2003, but petitioner issued the Final Acceptance Certificate only on May 30, 2005. Respondent then demanded execution Case Digest (G.R. No. 198849) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties
- Petitioner: Camp John Hay Development Corporation (investment arm constructing Camp John Hay Manor).
- Respondent: Charter Chemical and Coating Corporation (contractor for painting works).
- Contractor’s Agreement and offsetting scheme
- January 2001: Agreement for interior/exterior painting of unit 2E, contract price ₱15,500,000 (inclusive of two studio units as offset).
- Price later reduced to ₱13,239,734.16; Camp John Hay paid ₱7,339,734.16; balance ₱5,900,000 to be offset by two Camp John Hay Suites units (Units 102 & 104).
- Construction delays and attempts at delivery
- Suites construction had not started in 2001; original completion under 1996 Lease was 3.5 years, extended by MOAs in 2003 (completion by mid-2006) and 2008 (by 2012).
- Painting works completed in 2003; Final Inspection and Acceptance Certificate issued May 30, 2005.
- Charter Chemical demanded deed of sale and titles in Sept 2004 and April 2005. June 2005: contracts to sell executed, providing for delivery “within a reasonable period from completion.”
- August 2005: certifications issued that units were fully paid, but delivery delayed due to incomplete construction.
- Arbitration and appellate proceedings
- June 12, 2008: Charter Chemical filed Request for Arbitration at the Construction Industry Arbitration Commission (CIAC).
- March 30, 2009 Final Award: Camp John Hay to pay ₱5,900,000 for the units + ₱590,000 attorney’s fees; no exemplary damages; declined to fix delivery period.
- Court of Appeals affirmed in May 13, 2011 Decision; denied reconsideration Sept 30, 2011.
- November 23, 2011: Camp John Hay filed Petition for Review on Certiorari with the Supreme Court.
Issues:
- Does CIAC have jurisdiction despite a forum-selection clause in the later contracts to sell?
- Was rescission under Civil Code Article 1191 proper, or should a period have been fixed under Article 1197?
- Was the award of attorney’s fees to Charter Chemical justified?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)