Case Digest (G.R. No. 248495)
Facts:
This is Engr. Ruben Y. Yu, doing business under the name and style Ryu Construction v. Heirs of Manuel Sia, represented by Mayor Rosemarie H. Sia, G.R. No. 248495, July 06, 2022, the Supreme Court First Division, Zalameda, J., writing for the Court.On 18 March 2002, Ryu Construction, represented by Engr. Ruben Y. Yu (Ruben), and the Heirs of Manuel Sia, represented by Rosemarie H. Sia (Rosemarie; collectively respondents), entered into a lump-sum Construction Contract to build a four‑storey commercial building (a hotel) in Legazpi City for PHP 9,842,240.00. The contract provided for an advance payment of PHP 3,000,000.00 and progress billings, with final payment conditioned upon remittance of an occupancy permit.
Ruben alleges he completed and turned over the building in 2003 but that respondents refused to pay the remaining balance of PHP 448,240.00; he filed suit on 27 July 2006 for collection of that balance. Rosemarie admitted nonpayment but refused release of the balance because full occupancy was not issued and alleged defects — specifically undersized guest rooms in the 3rd and 4th floors — that violated the minimum requirements of Presidential Decree No. 1096 (PD 1096), the National Building Code. A 2009 Inspection Report by the Office of the City Engineer listed air‑space and ventilation deficiencies and modifications contrary to firewall openings. Ruben allegedly failed to act on the report.
Respondents engaged Architect Leo Del Rosario and contractor J‑Squared Construction to renovate the problematic floors in 2013 at a cost of PHP 1,576,163.86; a certificate of occupancy for the third and fourth floors was thereafter issued in 2014. Ruben filed an amended complaint in 2012 naming other heirs, but the RTC dropped them in 2013 and kept Rosemarie as the lone defendant.
After trial, the Regional Trial Court (RTC), Branch 2, Legazpi City, rendered judgment on 8 August 2016 in favor of Ruben: it ordered defendants to pay PHP 448,240.00 plus legal interest, attorney’s fees of PHP 25,000.00, and costs, finding that Ruben complied with the contract, that the building was accepted in 2003, and that the non‑issuance of a full occupancy permit could not be attributed to Ruben since the rooms were built according to the approved plans and the ventilation issue could be remedied without contractor liability.
On appeal, the Court of Appeals (Eighth Division) reversed by Decision dated 29 March 2019: it ordered Ruben to reimburse Rosemarie PHP 1,127,923.86 for renovation costs, awarded moral and exemplary damages and attorney’s fees, and held that Rosemarie was justified in hiring others to correct defects; the CA found Ruben should have known the plans did not comply with PD...(Subscriber-Only)
Issues:
- Did the Court of Appeals seriously err in reversing the RTC’s decision and finding that Ruben is not entitled to his monetary claims, such that the parties are in pari delicto and therefore barred from obtaining relief again...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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