Case Digest (G.R. No. 103372) Core Legal Reasoning Model
Facts:
In EPG Construction Company, Inc., and Emmanuel P. de Guzman v. Honorable Court of Appeals and University of the Philippines, the dispute arose from a contract entered in 1982 between petitioner EPG Construction Co., Inc. and the University of the Philippines (UP) for the construction of the UP Law Library Building, with a stipulated contract price of P7,545,000. The contract contained a guarantee clause wherein EPG warranted that the work completed and any change orders would conform to the plans and specifications, be free from defects, and required EPG to repair any defects discovered within one year from substantial completion and acceptance by UP. Additionally, EPG assumed liability for any structural defects causing the building to collapse within 15 years, in line with Article 1723 of the Civil Code. The building was formally accepted by UP on January 13, 1983, with a certification indicating satisfactory completion as per plans and specifications, recommending the relea
Case Digest (G.R. No. 103372) Expanded Legal Reasoning Model
Facts:
- Contractual Relationship and Project Details
- EPG Construction Co., Inc. (Petitioner) and the University of the Philippines (UP) entered into a contract for the construction of the UP Law Library Building for the stipulated price of P7,545,000.
- The contract included a guarantee clause requiring EPG to repair any defects for one year from the date of substantial completion and acceptance, and to be liable for collapse within 15 years due to defective construction or materials.
- Completion and Acceptance of Work
- The building was formally turned over by EPG to UP.
- UP issued a certificate of acceptance dated January 13, 1983, certifying that the work was completed satisfactorily and recommending release of retention to EPG.
- Discovery of Defects and Repair Offers
- Around July 1983, UP complained about six air-conditioning units on the third floor not cooling properly.
- EPG agreed to shoulder expenses for repairs amounting to P38,000 but did not proceed with the repair.
- UP repeated complaints; EPG offered to repair the system for P194,000. UP insisted repairs be free under the guarantee provision; EPG demurred.
- UP contracted another company to repair the defects for P190,000.
- Legal Proceedings
- UP demanded reimbursement and liquidated damages from EPG; demand was rejected.
- UP sued EPG and its president, Emmanuel P. de Guzman, in the Regional Trial Court (RTC).
- De Guzman’s motion to dismiss for lack of cause of action was denied.
- RTC ruled both defendants jointly and severally liable for actual damages (P190,000), liquidated damages (P50,000), attorney’s fees (P10,000), and costs.
- Petitioners appealed to the Court of Appeals (CA), which affirmed the RTC decision.
- Petitioners elevated the case to the Supreme Court, raising issues about estoppel, force majeure, and corporate personality.
Issues:
- Whether UP’s certificate of acceptance estops it from holding EPG liable for defects discovered after acceptance.
- Whether the defects in the air-conditioning system were caused by force majeure or a fortuitous event (specifically frequent brownouts).
- Whether Emmanuel P. de Guzman, as president of EPG, can be held solidarily liable with EPG Construction Co., Inc. for the damages awarded.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)