Case Digest (G.R. No. 213229)
Facts:
Filinvest Alabang, Inc. v. Century Iron Works, Inc., G.R. No. 213229, December 09, 2015, Supreme Court First Division, Perlas‑Bernabe, J., writing for the Court.In 1997–1998, petitioner Filinvest Alabang, Inc. awarded several contracts to respondent Century Iron Works, Inc., including a contract to supply and install metal works for Filinvest Festival Supermall for a lump sum price of P29,000,000, evidenced by an Agreement for Construction and accompanying General Conditions of Contract. After completing the work, respondent sought final payment, but petitioner withheld an aggregate of P1,392,088.68, itemized as: (a) balance of retention fee P40,880.00; (b) additional deduction claimed as damages for alleged substandard workmanship P227,500.00; and (c) cost of an additional scenic elevator enclosure P1,123,708.68. Respondent filed Civil Case No. 68850 before the Regional Trial Court (RTC) of Pasig City (assigned in San Juan) for sum of money with damages.
The RTC (Presiding Judge Leoncio M. Janolo, Jr.) in a Decision dated August 3, 2010 granted respondent’s claim only for P227,500.00 plus legal interest, finding that petitioner was estopped from asserting defective workmanship because it had issued a Certificate of Completion and Acceptance; the RTC denied recovery for the elevator enclosure on the ground that the subject contract was a fixed lump sum and thus petitioner’s liability was limited to the contract price. Respondent appealed to the Court of Appeals (CA).
The CA, in a Decision dated December 27, 2013 (CA‑G.R. CV No. 97025), affirmed the RTC in part but modified the judgment, ordering petitioner to pay respondent P227,500.00, P40,880.00, and P1,123,708.68, all with legal interest at 12% per annum from time of default. The CA agreed that the Certificate of Completion and Acceptance estopped petitioner from relying on alleged defective workmanship and found that the contract was not an absolute fixed lump sum because the General Conditions allowed extra works by official Site Instruction and valuation by Bill of Quantities; the CA relied on Site Instructions dated August 1, 1997 and January 23, 1998 and written cost br...(Subscriber-Only)
Issues:
- Did the Court of Appeals err in ordering petitioner to pay the balance of the retention fee of P40,880.00 to respondent?
- Did the Court of Appeals err in ordering petitioner to pay the additional deduction of P227,500.00 for claimed defective workmanship?
- Did the Court of Appeals err in ordering petitioner to pay P1,123,708.68 for the addition...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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