Case Digest (G.R. No. 170134)
Facts:
In December 1992, Angel V. Talampas, Jr. (petitioner), owner and general manager of AVTJ Construction, entered into a Contract for Site Development Works at Metrogate Silang Estates with Moldex Realty, Inc. (respondent) to perform roadworks, earthworks, and site grading on respondent’s Cavite property for a contract price of ₱10,500,000, payable by progress billings. Respondent made a ₱500,000 down payment, and work commenced on January 14, 1993, with a 300-day completion period. On May 14, 1993, Engr. Almeida, project manager for respondent, ordered a one-week suspension due to a subdivision redesign; the suspension extended to three weeks. Petitioner wrote on June 1, 1993 seeking confirmation, and on June 16, 1993 received an antedated April 23, 1993 letter directing immediate termination “due to a business decision.” After demobilizing, petitioner formally demanded on August 18, 1993 ₱1,485,000 for equipment rentals during suspension and ₱2,100,000 for lost opportunity; respoCase Digest (G.R. No. 170134)
Facts:
- Parties and Contract
- Petitioner Angel V. Talampas Jr. is owner and general manager of AVTJ Construction.
- On December 16, 1992, he contracted with respondent Moldex Realty, Inc. to develop Metrogate Silang Estates subdivision:
- Scope: roadworks, earthworks, site‐grading; procurement of materials, labor, equipment.
- Contract price: ₱10,500,000, payable by progress billings; initial down payment of ₱500,000.
- Construction began January 14, 1993, with a 300‐day completion deadline.
- Suspension and Termination
- May 14, 1993: Respondent’s project manager ordered a one‐week suspension due to plan redesign; actual suspension lasted three weeks.
- June 1, 1993: Petitioner inquired about project continuation.
- June 16, 1993: Petitioner received an antedated April 23, 1993 letter from respondent terminating the contract for “business decision” and authorizing demobilization.
- Post‐termination Demands and Proceedings
- August 18, 1993: Petitioner demanded:
- ₱1,485,000 for equipment rentals (May 14–June 16, 1993).
- ₱2,100,000 (20% of contract price) as opportunity cost.
- November 5, 1993: Filed complaint for breach of contract and fraud (non‐disclosure of DAR conversion‐clearance status).
- September 9, 1999 RTC decision: Held respondent liable for breach and fraud; awarded rentals, unrealized profits, moral and exemplary damages, attorney’s fees, and double costs.
- June 27, 2005 CA decision: Reversed RTC; dismissed complaint (finding mutual termination and no fraud).
- October 21, 2005 CA resolution: Denied motion for reconsideration.
- June 17, 2015 SC decision: Granted petition; reversed CA; awarded equipment rentals and opportunity cost; denied moral/exemplary damages and attorney’s fees.
Issues:
- Did respondent unilaterally abrogate the contract without just cause, or was there mutual termination?
- Was respondent’s nondisclosure of the lack of DAR conversion clearance the real reason for stoppage/termination, or was it a “business decision”?
- Did respondent have a duty to disclose the conversion‐clearance status, and does nondisclosure constitute fraud?
- Is the development contract indivisible or divisible?
- Is petitioner entitled to the damages awarded by the RTC?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)