G.R. No. L-16258 - San Diego vs. Sayson

Bartolome San Diego (petitioner) and Eligio Sayson (respondent) entered into an agreement in November 1954 for the construction of a building located at 1200 Arlegui, Farnecio, Quiapo, Manila.
The agreed contract price was P15,000.00 based on plans approved by the city engineer.

During construction, modifications were made to the approved plans. These included changes such as:

Increasing the width of the building from 13.80 meters to 14.30 meters;
Changing the party wall from hollow block to reinforced concrete;
Constructing a mezzanine that was not originally included in the contract;
Altering the stairs by constructing them and then ordering their removal;
Enlarging partitions, including raising the second-floor partitions and converting single walls into double walls;
Replacing wooden flooring with reinforced concrete in Section 22;
Adding eaves despite the City Engineer's initial disapproval; and
Plastering walls and ordering ceilings which were not provided for in the original plan.

Respondent Sayson claimed that these extra works entailed additional labor expenses amounting to P6,840.31.
Sayson sought recovery of the additional cost in addition to the original contract price, arguing that the extra work performed came at his additional expense of time, effort, and material.

San Diego contended that even if extra work was performed, he was not liable to pay the additional sum since the provisions of Article 1724 of the Civil Code, which governs construction contracts, did not permit an increase in price unless:

He argued that without such written authorization, his obligation was limited to the original contract sum.

The Court of First Instance of Manila ruled in favor of respondent Sayson, ordering San Diego to pay the additional labor cost of P6,840.31, with interest from September 10, 1956, plus an additional P500 for attorney’s fees and costs.
The Court of Appeals affirmed the decision, holding that:

The alterations executed by Sayson at San Diego’s instruction (and which benefited the building) were outside the scope of the original approved plans;
The absence of a written agreement for the changes should not prevent the contractor from recovering the additional costs incurred; and
The extra work, though not specified in the contract, entitled Sayson to additional compensation.

Whether the modifications and additional work performed by Sayson, mandated by San Diego’s instructions, qualify for recovery of additional costs under the construction contract.

Did the extra work, which deviated from the approved designs, obligate San Diego to pay beyond the initial contract sum?
Can recovery for such work be granted without a subsequent written amendment to the contract?

Is Article 1724 to be read as merely an extension of the Statute of Frauds or does it constitute a substantive condition precedent for claiming additional compensation?
Considering the legislative intent to prevent litigation and misunderstandings, must the contractor secure written authorization for any alterations in order to claim extra payment?

Whether the contractor’s claim is barred by the absence of written confirmation, despite the fact that he performed the work at the behest of the owner.
Whether principles of justice and equity favor the contractor’s compensation for the benefits derived from the modifications.