Case Digest (G.R. No. 188027)
Facts:
In Swire Realty Development Corporation v. Specialty Contracts General and Construction Services, Inc. and Jose Javellana, G.R. No. 188027, decided on August 9, 2017, the petitioner Swire Realty Development Corporation filed a complaint for sum of money and damages against the respondents Specialty Contracts General and Construction Services, Inc., represented by its President Jose Javellana, for breach of contract. The parties entered into an Agreement on December 27, 1996, where the respondents undertook to perform waterproofing works on Swire's condominium project, the Garden View Tower, for Php 2,000,000.00 to be completed within 100 calendar days, or by April 6, 1997. Payment terms included 20% down payment and the balance through monthly progress billings, subject to 10% retention and 1% withholding tax. The Agreement also allowed penalties for delays and set forth conditions for release of retention funds. The respondents allegedly failed to complete the works fully,
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Case Digest (G.R. No. 188027)
Facts:
- Parties and Nature of the Case
- Petitioner Swire Realty Development Corporation (Swire) filed a Complaint for Sum of Money and Damages against respondents Specialty Contracts General and Construction Services, Inc. (Specserv), represented by Jose Javellana, Jr.
- The complaint arose from breach of an Agreement to Undertake Waterproofing Works (the Agreement) dated December 27, 1996, wherein Specserv agreed to perform waterproofing works on Swire’s Garden View Tower condominium project for Php 2,000,000.00.
- The period of performance was 100 calendar days from the Agreement execution or until April 6, 1997. Payment terms were 20% down payment and 80% through monthly progress billings, subject to a 10% retention fee and 1% withholding tax.
- Scope and Terms under the Agreement
- The Agreement included comprehensive waterproofing works covering specific areas, including the Swimming Pool (234.20 sq.m.), as detailed under Article I.
- It provided penalties for delay and the release of retention fee within 90 days after acceptance of completed work.
- Article VII of the Agreement stipulated procedures for Change Orders in case of deviations or additional works.
- Trial Court Proceedings and Decision
- The RTC, Branch 224, Quezon City, rendered judgment on July 9, 2004, ordering respondents to pay:
- Php 400,000.00 as actual damages representing advanced funds without completion of waterproofing works;
- Php 124,931.40 representing contract price paid to Esicor for unfinished works of Specserv;
- Php 100,000.00 as attorney’s fees.
- The respondents’ motion for reconsideration was denied by the RTC on October 25, 2004.
- Court of Appeals (CA) Proceedings and Decision
- On February 24, 2009, the CA reversed the RTC ruling, recognizing additional works performed by respondents and computed the balance due as Php 157,702.06 plus legal interest of 6% per annum from October 10, 1997 until fully paid.
- The CA’s computation was:
- Original contract cost: Php 2,000,000.00
- Accomplishment rate: 90% = Php 1,800,000.00
- Additional works: Php 57,702.06
- Total due: Php 1,857,702.06
- Less: Advances and paid billings totaling Php 1,660,000.00
- Less: Penalty for 10% incomplete work at Php 40,000.00
- Balance due: Php 157,702.06
- Swire’s motion for reconsideration before the CA was denied on May 25, 2009.
- Petition for Review on Certiorari
- Swire filed the petition before the Supreme Court alleging:
- The CA misappreciated facts ruling that additional works were not included in the Agreement’s scope despite clear evidence to the contrary;
- The CA ignored evidence of actual damages suffered by Swire due to breach;
- The RTC’s findings, being factual and supported by evidence, should be final and conclusive.
- Respondents maintained that the Supreme Court could not review the CA’s factual findings.
Issues:
- Whether the Supreme Court can review the factual findings of the Court of Appeals in a petition for review on certiorari under Rule 45.
- Whether the waterproofing of the swimming pool constitutes additional work outside the scope of the Agreement for which respondents are entitled to compensation.
- Whether the petitioner is entitled to actual damages, penalty, and attorney’s fees considering respondents’ alleged breach.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)