Case Digest (G.R. No. 179817)
Facts:
In the case Spouses Roberto & Evelyn David and Coordinated Group, Inc. v. Construction Industry Arbitration Commission and Spouses Narciso & Aida Quiambao (479 Phil. 578, July 30, 2004), petitioner Coordinated Group, Inc. (CGI), a construction corporation, with spouses Roberto and Evelyn David as its President and Treasurer respectively, entered into a Design/Build Contract with respondents spouses Narciso and Aida Quiambao on October 7, 1997, for the design and construction of a five-storey concrete office/residential building in Tondo, Manila. The contract stipulated that CGI prepare the working drawings and construct the building for a total sum of P7,309,821.51, with an additional P200,000 for design costs. Completion was originally scheduled within nine months but was extended to November 15, 1998.
During construction, respondents discovered deviations and revisions from the approved plans by petitioner CGI without prior notice or consent, such as additional colum
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Case Digest (G.R. No. 179817)
Facts:
- Parties and Contract
- Petitioners: Spouses Roberto and Evelyn David, officers of petitioner corporation Coordinated Group, Inc. (CGI), engaged in construction business.
- Respondents: Spouses Narciso and Aida Quiambao, owners of land in Tondo, Manila.
- On October 7, 1997, respondents engaged CGI to design and construct a five-storey concrete office/residential building on their property through a Design/Build Contract.
- Contract terms included:
- CGI to prepare working drawings;
- Respondents to pay P7,309,821.51 for construction and P200,000 for design;
- Construction completion within nine months from securing building permit; initially scheduled by July 16, 1998, extended to November 15, 1998.
- Performance and Disputes
- Petitioners allegedly failed to follow agreed plans and specifications.
- Respondents demanded correction of errors, but petitioners did not act.
- Respondents rescinded the contract on October 31, 1998, after paying 74.84% of construction cost.
- Respondents hired another contractor to inspect and assess the unfinished project; findings revealed deviations and unauthorized plan revisions by petitioners.
- Arbitration Proceedings
- Respondents filed breach of contract case before Regional Trial Court (RTC) of Manila.
- Parties agreed to submit dispute to Construction Industry Arbitration Commission (CIAC).
- CIAC appointed Atty. Custodio O. Parlade as sole arbitrator; with assistance from Engr. Loreto C. Aquino.
- After hearings and site inspections, arbitrator rendered an award ordering petitioners to pay respondents P4,073,229.94 plus interest, rejecting petitioners’ claims, and holding petitioners jointly and severally liable.
- Court of Appeals and Supreme Court Action
- Petitioners appealed to the Court of Appeals, which affirmed the arbitral decision but deleted the award for lost rentals.
- Petitioners filed petition for review on certiorari before the Supreme Court, raising issues on unilateral rescission and corporate officers’ liability.
Issues:
- Whether the respondents had legal and factual basis to unilaterally rescind the Design/Build Contract against petitioners who purportedly substantially performed their obligations.
- Whether the petitioner-spouses Roberto and Evelyn David can be held jointly and severally liable with CGI, contrary to the doctrine of corporate juridical personality, given that they were merely officers of the corporation.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)