Case Digest (G.R. No. 124899)
Facts:
Renato C. Salvador v. Court of Appeals, Maria Romayne Miranda and Gilbert Miranda, G.R. No. 124899, March 30, 2004, Supreme Court First Division, Carpio, J., writing for the Court.Petitioner Renato C. Salvador is a licensed contractor who entered into a written Development and Construction Contract (the Contract) with respondent Maria Romayne Miranda, through her attorney‑in‑fact Gilbert Miranda, for development of a 17,748 sq. m. property in Mariveles, Bataan into the Haven of Peace Memorial Park for a contract price of P3,986,643.50. Gilbert was authorized by Romayne under a general power of attorney dated April 15, 1990. Salvador agreed to complete the project in 180 working days (plus a 45‑day grace period). Paragraphs of the Contract expressly addressed changes, escalation for substantial increases in specified materials (paragraph 18), and that matters not stipulated would be included only by written agreement (paragraph 20). Salvador was contracted to supply materials (paragraph 3).
Work commenced in July 1990 after a 20% down payment of P797,328.70; Salvador submitted periodic billings that Gilbert paid. In December 1990 Salvador demanded additional sums beyond the Contract Price: (a) P39,000 (20% charge on P196,000 worth of filling materials respondents had purchased and delivered), (b) P637,862.96 as a 20% escalation on outstanding balances, and (c) P399,190.46 for alleged additional works. Salvador threatened to stop work if respondents would not accede; defendants paid P250,000 in anticipation of escalation and respondents asked Salvador for detailed supporting documents and receipts. Salvador submitted a 25 December 1990 computation applying a uniform 20% increase on outstanding balances, but he did not produce receipts showing increases in particular materials. Salvador ceased work on 14 January 1991 and later produced a DPWH notice dated 8 January 1991 (received by one of his engineers on 15 January 1991) ordering work stopped for lack of a building permit; Gilbert had a new contractor replace Salvador in March 1991.
On 31 January 1991 Salvador filed a complaint for collection and damages (or declaration of claim as lien). After trial, the Regional Trial Court (RTC), San Mateo, Rizal, Branch 76, rendered judgment on August 18, 1992 dismissing Salvador’s complaint and respondents’ counterclaims for insufficiency of basis, finding Salvador failed to prove entitlement to additional works, escalation, or the 20% charge on respondent‑supplied filling materials; the RTC suggested a proper accounting by the parties before a third party. Salvador appealed to the Court of Appeals (CA).
The Court of Appeals, in a decision dated April 30, 1996 (CA‑G.R. CV No. 39661), affirmed dismissal of Salvador’s complaint but reversed the RTC on the counterclaims, finding Salvador stopped work in bad faith and ordering Salvador to reimburse respondents P1,594,759.57 (respondents’ alleged completion costs less the admitted outstanding balance), plus P100,000 moral damages, P50,000 exemplary damages, and P20,000 attorneys’ fees. Salvador filed a ...(Subscriber-Only)
Issues:
- Did petitioner Salvador validly establish claims for (a) additional works performed and (b) escalation of the Contract Price, including the 20% charge on filling materials?
- Were respondents entitled to the counterclaim award and the CA’s damages (reimbursement for completion costs, moral and exemplary damage...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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