Case Digest (G.R. No. 194507)
Facts:
Federal Builders, Inc. v. Foundation Specialists, Inc., G.R. Nos. 194507 and 194621, September 08, 2014, Supreme Court Third Division, Peralta, J., writing for the Court.On August 20, 1990, Federal Builders, Inc. (FBI) contracted Foundation Specialists, Inc. (FSI) as subcontractor to construct the diaphragm wall, capping beam, and guide walls of the Trafalgar Plaza in Makati for P7,400,000, with a 20% downpayment and progress billings every 15 days, payable within one week of presentation. Disputes arose over alleged defects and noncompletion, and on January 9, 1992 FSI sued FBI in the Regional Trial Court (RTC) of Makati for P1,635,278.91 (Billings Nos. 3 and 4), interest, moral and exemplary damages, and attorney’s fees, alleging 97% completion and refusal to pay.
FBI answered, counterclaimed and alleged FSI completed only 85%, performed defective work, abandoned the site, and caused delays; FBI sought compensation for remedial works. After trial the RTC, in a Decision dated May 3, 2001, ruled for FSI: it ordered FBI to pay P1,024,600 (Billings 3 and 4) less P33,354.40, plus 12% legal interest from August 30, 1991, awarded P279,585 for undelivered cement, P200,000 attorney’s fees, and denied FBI’s counterclaim.
On appeal, the Court of Appeals (CA) in a Decision dated July 15, 2010 affirmed the RTC but removed the P279,585 cement award for lack of supporting receipts and reduced attorney’s fees to P50,000; the CA sustained the 12% interest award. Both parties moved for reconsideration but were denied, and both filed separate Rule 45 petitions with this Court. FSI’s petition (G.R. No. 194621) was dismissed by the Court on February 21, 2011 as late-filed. FBI’s petition ...(Subscriber-Only)
Issues:
- May the Court disturb the RTC’s factual findings—affirmed by the CA—that FSI substantially performed and is entitled to payment for Billings 3 and 4 despite FBI’s allegations of defective work and abandonment?
- Was the imposition of 12% per annum legal interest from August 30, 1991 on the award for Billings 3 and 4 proper, or should a different rate and accrual date apply?
- Should FBI’s counterclaim for P8,582,756.29...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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