Case Digest (G.R. No. 229262) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In H.S. Pow Construction and Development Corp. v. Shaughnessy Development Corporation (G.R. No. 229262, July 7, 2021), petitioner H.S. Pow Construction and Development Corp. (HSPCDC), a builder engaged in roads, drainage, water distribution and steel reservoir works, entered into a P10,500,000.00 construction contract in September 2001 with Shaughnessy Development Corporation (SDC) for subdivision improvements at Summerfield Subdivision in Taytay, Rizal. The contract required commencement within ten days of notice to proceed and completion in 180 days, inclusive of all materials, labor, supervision and bonding. Work began May 21, 2002, and during construction HSPCDC performed variation orders worth P552,829.75 approved by SDC’s president and built three duplex units beyond the original scope. By March 3, 2003, the road network was finished but SDC withheld payment of P766,556.46 and later the entire balance of P2,122,704.55 despite extrajudicial demands. On April 4, 2005, HSPCDC Case Digest (G.R. No. 229262) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Contractual Engagement
- On September 2001, H.S. Pow Construction and Development Corporation (HSPCDC) entered into a Construction Contract with Shaughnessy Development Corporation (SDC) for P10,500,000.00, inclusive of materials, labor, overhead, bonds, and VAT; with no escalation clause; work to commence within 10 days from notice to proceed and complete within 180 days.
- Construction began May 21, 2002; SDC approved variation orders costing P552,829.75; SDC also instructed HSPCDC to build three duplex units outside original scope.
- Performance, Billing, and Demand
- By March 3, 2003, road network was complete; HSPCDC submitted progress billing of P766,556.46 (Jan 10–Mar 3, 2003); SDC deferred payment and made no response to follow‐up letters.
- On November 11, 2003, HSPCDC sent a Summary of Account demanding P2,122,704.55 (main contract balance P1,081,584.80; duplex units P488,290.00; variation orders P552,829.75); SDC refused payment.
- Trial Court and Appeals
- HSPCDC filed Complaint in RTC Quezon City (Civil Case No. Q-05-55081) for P2,122,704.55 plus 12% interest, attorney’s fees, and damages; SDC counterclaimed for P1,078,067.80 (completion expenses, penalties, exemplary damages, litigation costs).
- RTC (Oct 29, 2010) awarded HSPCDC P44,270.94 (main contract), P552,829.75 (variations), P488,290.00 (duplex), 10% attorney’s fees, and 12% interest from finality; CA (Aug 16, 2016) reversed, awarded SDC P362,781.72 (well-drilling), P359,503.80 (water tank), P1,050,000.00 (delay) against HSPCDC, and HSPCDC P2,069,874.80 against SDC, with 6% interest; SC granted HSPCDC’s petition in part (July 7, 2021).
Issues:
- Did the CA err in directing HSPCDC to pay SDC P362,781.72 for well-drilling and P359,503.80 for the elevated water steel tank?
- Did the CA err in holding HSPCDC liable for P1,050,000.00 in delay penalties?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)