Case Digest (G.R. No. 185664) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Linear Construction Corporation v. Dolmar Property Ventures, Inc. (G.R. No. 212327, November 17, 2021), Dolmar Property Ventures, Inc. (Dolmar) engaged Linear Construction Corporation (Linear) in 1998 to build the drainage system of Dolmar Golden Hills Subdivision in Marilao, Bulacan (Marilao Project) under two separate contracts. In 2003, the parties executed additional agreements for the Sta. Maria Project in Sta. Maria, Bulacan, fixing progress‐billing payments totaling ₱40,820,000.00, subject to an 8% retention until final written acceptance, submission of as‐built plans, and proof of non‐indebtedness. After Linear completed the Sta. Maria Project, it demanded ₱3,766,292.12 on June 7, 2007. Dolmar, however, withheld payment, asserting a self‐determined rectification cost of ₱6,379,935.00 for alleged defects in the Marilao Project discovered by its consultant, R.S. Caparros and Associates, and offset this against Linear’s retention money. Linear filed a collection suit in Case Digest (G.R. No. 185664) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Contracts and Obligations
- In 1998, Dolmar Property Ventures, Inc. (Dolmar) engaged Linear Construction Corporation (Linear) to build the drainage system of Dolmar Golden Hills Subdivision, Brgy. Loma De Gato, Marilao, Bulacan (Marilao Project), under separate Phase 1 and Phase 2 agreements.
- In 2003, Dolmar contracted Linear for the horizontal construction of the Dolmar Golden Hills Subdivision at San Vicente, Sta. Maria, Bulacan (Sta. Maria Project), covered by a service contract and two supplemental agreements, with a total contract price of ₱40,820,000.00. Payments were on progress billing less 8% retention; final retention payable within 45 days after final written acceptance upon proof of non-indebtedness and submission of as-built plans.
- Inspection, Defect Allegations, and Cost Estimates
- Dolmar’s manager, R.S. Caparros and Associates, conducted joint inspections of the Marilao Project without Linear’s representation and reported defects (missing pipes, layout discrepancies), notifying Linear in writing.
- Linear performed partial rectifications; R.S. Caparros issued cost estimates for full rectification at ₱6,379,935.00; Dolmar engaged Mr. Elpidio D. Agapito for interim repairs.
- Payment Demands and Dispute
- After completing the Sta. Maria Project, Linear demanded release of its retention money (initially ₱3,766,292.12, later adjusted to ₱3,823,997.96) and submitted requisite proofs.
- Dolmar withheld payment, asserting legal compensation by deducting the estimated Marilao rectification cost, resulting in an alleged balance owing by Linear of ₱2,613,642.88.
- Judicial Proceedings
- RTC Decision (22 Jan 2013, Mandaluyong RTC Branch 213, Civ. Case No. MC07-3385): ruled for Linear; awarded retention (₱3,823,997.96) with 12% interest, attorney’s fees, exemplary damages, and costs; held legal compensation elements unproven.
- CA Decision (29 Apr 2014, CA-G.R. CV No. 101201): reversed; applied legal compensation, offset retention against rectification cost, ordered Linear to pay Dolmar ₱2,555,937.04 with 6% interest, plus exemplary damages, attorney’s fees, and costs.
Issues:
- Should the petition be dismissed for Linear’s failure to strictly comply with Rule 45 procedural requirements?
- Was Linear’s claim over the Sta. Maria retention money ipso jure extinguished by legal compensation against Dolmar’s Marilao rectification-cost claim?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)