Title
Pascua vs. G and G Realty Corp.
Case
G.R. No. 196383
Decision Date
Oct 15, 2012
Construction dispute: contractor completed project despite delays from owner's additional works; Supreme Court ruled owner must pay balance under quantum meruit, reversing appellate court.

Case Digest (G.R. No. 176535)
Expanded Legal Reasoning Model

Facts:

  • Contract and Construction Project
    • On October 15, 1999, petitioner Robert Pascua, doing business as Tri-Web Construction, and respondent G & G Realty Corporation entered into a contract for the construction of a four-storey commercial building and a two-storey kitchen with dining hall.
    • Petitioner undertook to provide all materials, labor, technical expertise, and supervision, while respondent was to pay the contract price of Eleven Million One Hundred Thousand Pesos (₱11,100,000.00).
  • Additional Works and Change Orders
    • During construction, respondent required petitioner to perform several additional works and change orders not covered by the original contract.
    • Respondent instructed petitioner to prioritize these additional works, causing a temporary halt in the construction of the main four-storey building.
    • These additional works included the construction of a roof deck, installation of aluminum windows, insulation, narra parquet, additional lights, doors, comfort rooms, and air conditioning units, all within the same project area.
  • Project Completion and Dispute
    • Petitioner completed construction in 2000, albeit behind the scheduled turnover date.
    • The parties conducted a punch list to address minor repairs; petitioner complied and completed all punch list requirements.
    • Despite completion, respondent refused to pay the outstanding contract balance, prompting petitioner to file a Complaint for Sum of Money with Damages before the Regional Trial Court (RTC) of Pasig City.
  • Trial Court Decision
    • The RTC ruled in favor of petitioner, holding that the delay was reasonable and caused by respondent’s additional works and change orders.
    • The court awarded petitioner:
      • The remaining balance of the contract price, less government permits and taxes shouldered by respondent, subject to proof;
      • Attorney’s fees of ₱50,000.00; and
      • Costs of suit.
    • The court rejected the imposition of penalties for late completion, finding that respondent did not dispute the additional works and that petitioner was not at fault for any shortages in labor supply.
  • Court of Appeals Proceedings
    • On appeal, the Court of Appeals (CA) affirmed the RTC decision with modifications, deleting the award for attorney’s fees and ordering payment of the remaining balance less penalties and incidental expenses related to violations cited by BFP and Maynilad as well as government permit costs.
    • Upon respondent’s motion for reconsideration, the CA reversed itself and ruled in favor of respondent, finding that petitioner’s delay was due to acceptance of two other repair contracts and thus ordered petitioner to pay penalties and refund a portion of payments to respondent.
  • Petition to the Supreme Court
    • Petitioner filed a petition for review under Rule 45 contesting the CA’s Amended Decision, alleging errors in fact-finding, misappreciation of evidence, erroneous admission of hearsay evidence, and incorrect legal conclusions.
    • Petitioner maintained that the delay was caused by respondent’s additional works and change orders and that respondent was liable for the unpaid contract balance.

Issues:

  • Whether the petitioner is entitled to the payment of the outstanding balance of the contract price despite the delay in project completion.
  • Whether the delay was caused by petitioner’s undertaking of other repair contracts or by respondent’s additional works and change orders under the original project.
  • Whether the factual findings of the trial court, which were favorable to the petitioner, should be accorded weight and upheld.
  • Whether the Court of Appeals erred in reversing its earlier decision and ruling based on hearsay evidence and misappreciation of the evidence.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)

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