Case Digest (G.R. No. 130721)
Facts:
Romago Electric Co., Inc. v. Honorable Court of Appeals, Soledad C. Cac, Joephil Bien, Renato Cunanan and Delfin Inciong, G.R. No. 130721, May 26, 2005, Second Division, Chico-Nazario, J., writing for the Court. The petition is a Rule 45 petition for review on certiorari seeking reversal of the Court of Appeals decision of 31 July 1997 (and resolution of 16 September 1997) which affirmed the Regional Trial Court (RTC), Branch 19, Cauayan, Isabela, decision of 29 June 1990 in Civil Case No. 19-300 in favor of the private respondents for collection of money with damages.
In 1982, National Power Corporation (NPC) contracted with Romago Electric Co., Inc. (Romago) under Contract No. Sp80DLC-502 for erection and installation of 69 KV 3-phase transmission lines for P2,657,856.40. On 7 June 1982 Romago subcontracted the project to BICC Construction, an unregistered partnership composed of Soledad Cac, Delfin Inciong, Joephil Bien and Renato Cunanan, for P1,614,387.99. The subcontract expressly incorporated certain "Contract Documents"—including National Power Corporation's Specification No. Sp80DLC-502 and "any and all plans, drawings, and schedules prepared by National Power Corporation"—"as though fully written out and set forth herein insofar as they are not inconsistent with the terms thereof."
Among NPC's "Plans and Specifications" was paragraph GP-08 (Contract Price Adjustment), which provided for adjustments (additive or deductive) of contract price in specified circumstances and pursuant to official indices (as embodied in P.D. No. 454 as amended by P.D. No. 459). During construction NPC granted Romago a Contract Price Adjustment (CPA) in the amount of P250,778.65. BICC claimed entitlement to 70% of that CPA (P175,545.05) as its share under the subcontract.
Romago received the CPA from NPC after executing a sworn affidavit (by its VP for Finance, Eduardo Cruz) certifying absence of liens or encumbrances; Romago also paid P38,712.70 to Mariano Cac (authorized representative of BICC) per Cash Disbursement Voucher (CDV) No. 23162 dated 3 October 1983 described as "full payment of accounts including retention for various works at NPC-Isabela." BICC pressed further demands for payment of the CPA which Romago ignored; BICC (through Soledad Cac) then filed a complaint for collection of a sum of money with damages.
The RTC ruled on 29 June 1990 that the CPA inured to the benefit of the plaintiffs and ordered Romago to pay the CPA of P250,778.65 (excluding lawful taxes), interest from August 12, 1983 and attorney's fees. Romago appealed to the Court of Appeals. On 31 July 1997 the ...(Subscriber-Only)
Issues:
- Are the private respondents (BICC) entitled to share in the Contract Price Adjustment (CPA) granted by NPC to Romago under the subcontract as a matter of contract interpretation and incorporation by reference?
- Can the principle of equity be applied to grant the CPA to private respondents notwithstanding the subcontract’s terms?
- Did Romago’s Cash Disbursement Voucher No. 23162 and the payment of P38,712.70 to Mariano Cac operate to extinguish or release BICC’s claim to the CPA?
- Was Mariano Cac clothed with authority to renounce or waive BICC’s claims, including the CPA, by receiving the P38,712.70?
- If BICC is entitled to share in the CPA, is the proper amount P175,545.05 (...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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