G.R. No. L-8080 - Belleza vs. Zandaga

In mid‐1998, spouses Dana and Cerelina Caswell (the Caswells) sought an electrical installation for their newly built home in San Narciso, Zambales. Zameco II, the local electric cooperative, estimated the cost at ₱456,000.00. Owen Prosper A. Mackay (Owen) offered to perform the work for ₱250,000.00.
Owen, assisted by Cesar Badua and Albert Galeng, claimed completion of the installation by August 1998 and received ₱227,000.00 from the Caswells. He informed Cerelina to coordinate with Zameco II for inspection and connection.

On August 11, 1998, Engr. Victor Pulangco of Zameco II inspected the installation and identified multiple defects, including: improper guying and deadend materials, lack of armor tape and clamp loops, missing locknuts, incorrect pole top pins and phasing, grounding deficiencies, absence of a fuse cut‐out with lightning arrester at the tapping point, and improper transformer positioning.
Zameco II refused energization. The Caswells searched for Owen to correct the work, but he disappeared. In January 1999, they commissioned Zameco II to rectify all deficiencies at their own expense (₱69,205.00) and finally secured electrical service.

On September 4, 1998, the Caswells executed a joint affidavit accusing Owen of estafa (Criminal Case No. RTC-2533-I), alleging misrepresentation as National Power Corporation personnel. Owen was acquitted for reasonable doubt on May 15, 2003.
Owen then filed a collection suit (MTC Civil Case No. 538) for the ₱23,000.00 unpaid balance and damages for malicious prosecution. The Caswells counterclaimed reimbursement of their ₱69,205.00 rectification costs, submitting Engr. Pulangco’s ₱15,400.00 receipt and a ₱53,805.00 sales invoice from Peter A. Eduria Enterprises.

The MTC (June 29, 2006) held Owen liable under Articles 1715 and 1167 of the Civil Code, dismissed his claims, offset ₱23,000.00 from the rectification cost, and awarded the Caswells ₱46,205.00.
The RTC (October 31, 2006) reversed, granted Owen ₱23,000.00 plus moral (₱25,000.00), exemplary (₱20,000.00) damages, counsel fees (₱30,000.00), and costs.
The CA (April 30, 2008) reinstated the MTC, ruling the Caswells had substantially complied with the demand requirement under Article 1715 and that Owen’s refusal made further demand futile. Its denial of reconsideration was issued July 24, 2008.

Did Owen fulfill his obligation under Article 1715 of the Civil Code to execute defect‐free work?
Did the Caswells validly demand rectification of defects, entitling them to reimbursement of correction costs?

Does Owen’s acquittal in the estafa case affect the civil liability for defective work?
Are the Caswells’ receipts (handwritten and sales invoice) admissible and sufficient proof of their actual rectification expenses?
Was the RTC correct in requiring a specific performance suit and awarding moral, exemplary damages, and attorneys’ fees instead of applying the contractual remedy under Article 1715?