Case Digest (G.R. No. 154885) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Diesel Construction Co., Inc. v. UPSI Property Holdings, Inc., decided on March 24, 2008 under G.R. Nos. 154885 and 154937, Diesel (Contractor) and UPSI (Owner) entered into a written agreement on August 26, 1995 for the interior architectural works on floors 14–16 of UPSI Building 3 in Ermita, Manila for a contract price of ₱12,739,099.00, payable by progress billing and secured by a performance bond issued by FGU Insurance Corp. The contract provided for a 90-day completion period starting August 21, 1999 (moved from August 2) with liquidated damages of 0.2% per day for unjustifiable delay. Change orders and four written extensions were requested by Diesel for manual hauling of materials, delayed marble supply, change orders, and shower assembly installation. UPSI disapproved some extensions and withheld progress payments as liquidated damages. On March 16, 2000, Diesel declared substantial completion and tendered the premises, which UPSI rejected on grounds of abandonment Case Digest (G.R. No. 154885) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Contractual Relationship
- On August 26, 1995, Diesel Construction Co., Inc. (Diesel), as Contractor, and UPSI Property Holdings, Inc. (UPSI), as Owner, executed a Construction Agreement for interior architectural works on floors 14–16 of UPSI Building 3 Meditel/Condotel Project, Manila.
- Contract price: PhP 12,739,099; payment by progress billing; performance bond posted by FGU Insurance Corp.
- Project Scope and Timeline
- Original prosecution period: August 2–November 8, 1999 (90 days); later moved to August 21–November 20, 1999.
- Liquidated damages for unjustifiable delay: 1/5 of 1% of total Project cost per calendar day.
- Project Administration
- Contract oversight by Grace S. Reyes Designs, Inc. (interior design/architecture), D.L. Varias & Associates (Construction Manager), Ryder Hunt Loacor, Inc. (Quantity Surveyor).
- Change orders and extensions: Diesel sought extensions for manual hauling of materials, delayed marble supply, various change orders, and shower assembly delay; UPSI disapproved some extensions and assessed liquidated damages via progress payment deductions.
- Dispute and Arbitration
- March 16, 2000: Diesel declared Project completed; UPSI refused acceptance, withheld 10% retention, and unpaid balance.
- Diesel filed before CIAC for unpaid balance and damages; UPSI counterclaimed for completion expenses and affirmed liquidated damages deductions.
- CIAC Decision (Dec. 14, 2001)
- Ordered UPSI to pay Diesel PhP 4,027,861.60 (PhP 3,661,692.60 unpaid balance; PhP 366,169 attorney’s fees); dismissed UPSI counterclaim; assessed UPSI arbitration costs PhP 298,406.03.
- CA Decision and Resolution
- CA (Apr. 16, 2002) modified CIAC: allowed UPSI liquidated damages PhP 1,309,500; granted Diesel unpaid balance PhP 2,441,482.64 minus damages; dismissed attorney’s fees; split arbitration costs; discharged FGU.
- CA Resolution (Aug. 21, 2002) reduced liquidated damages to PhP 1,146,519; held UPSI liable to Diesel PhP 2,515,173.64 with interest.
- Supreme Court Proceedings
- Diesel (G.R. No. 154885) and UPSI (G.R. No. 154937) separately petitioned under Rule 45; consolidated by SC Resolution (Mar. 17, 2003).
Issues:
- Issues raised by Diesel (G.R. No. 154885)
- Whether the CA had jurisdiction to review qualifications of CIAC tribunal members and nullify its findings.
- Whether the CA could annul CIAC’s fact‐finding when it substitutes its own conjectural opinion.
- Whether the CA’s findings are contrary to those of the CIAC tribunal.
- Issues raised by UPSI (G.R. No. 154937)
- Whether CA’s denial of additional completion expenses is void for being against record evidence.
- Whether CA’s finding of only 45 days’ delay is void for contradicting contractual stipulations.
- Whether CA’s resolution on reconsideration is void for not rectifying errors.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)