Case Digest (G.R. No. 212058)
Facts:
Star Electric Corporation v. R & G Construction Development and Trading, Inc., G.R. No. 212058, December 07, 2015, Supreme Court Third Division, Velasco Jr., J., writing for the Court.In May 2002, Star Electric Corporation (petitioner), as subcontractor, entered into a Construction Contract with R & G Construction Development and Trading, Inc. (respondent) to install electrical, plumbing, and mechanical works for the Grami Empire Hotel for P2,571,457.21, to be paid by progress billings; respondent paid an initial P500,000 downpayment and P80,000 advance. Construction commenced; petitioner submitted progress billings in August–October 2002 but respondent refused to pay subsequent billings despite repeated demands.
On September 20–21, 2002, after petitioner announced it would stop work pending payment and indicated willingness to terminate without prejudice to its claims, respondent formally terminated the contract alleging major defects (secondhand breakers, improper installations) and asserted that the downpayment already covered petitioner’s 23.13% completion. Petitioner replied on September 24, contesting defects, attributing delay to plan modifications, claiming at least 40% completion (including unused materials), proposing an independent appraiser, and asking to retrieve its tools and equipment.
Petitioner filed suit in the Regional Trial Court (RTC), Paranaque City, Branch 196, on April 4, 2003 for collection of P1,235,052.70 (later amended to P771,152.48, then to P1,269,734.05 to include a November 3, 2002 final billing), alleging unpaid progress billings and recovery of tools. Respondent counterclaimed for reimbursement of P558,730 and P161,810 for rectification works it caused to be performed by CP Giron Enterprises and PTL Power Corporation, alleging petitioner’s defective workmanship and delay.
The RTC, after trial, found for petitioner and ordered respondent to pay P1,153,634.09 with legal interest, attorney’s fees of P120,000, and costs (Decision dated November 16, 2009), concluding respondent’s defect allegations were self-serving, that respondent caused delays by ordering numerous changes, and that petitioner substantially performed up to November 3, 2002. Respondent appealed to the Court of Appeals (CA), CA-G.R. CV No. 95008.
The CA, in a Decision dated July 17, 2013 (authored by J. Sorongon), reversed the RTC, dismissed petitioner’s complaint, and ordered petitioner to pay respondent P540,009.75 as liquidated damages, reasoning...(Subscriber-Only)
Issues:
- Did the Court of Appeals err in reversing the RTC, finding both parties breached the Construction Contract, and ordering petitioner to pay respondent liquidated damages fo...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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