Case Summary (G.R. No. 212058)
Nature of the Case
This case involves a Petition for Review under Rule 45, challenging the decision of the Court of Appeals (CA) that reversed the Regional Trial Court (RTC) ruling in favor of the petitioner in a dispute over the collection of a monetary sum pursuant to a construction contract.
The Facts
In May 2002, the petitioner was contracted as a sub-contractor by the respondent for electrical, plumbing, and mechanical works related to the Grami Empire Hotel project, with a contract value of P2,571,457.21, payable through progress billing. The work began following the signing of the contract, after which the respondent made initial payments totaling P580,000. However, subsequent progress billings from the petitioner were met with refusal to pay by the respondent, which led the petitioner to suspend work. On September 21, 2002, the respondent issued a termination notice citing defective work and a claimed completion rate of only 23.13%.
Legal Proceedings Initiated
Following the termination notice, the petitioner filed a complaint on April 4, 2003, in the RTC demanding payment of P1,235,052.70 for unpaid progress billings. Throughout the case, the petitioner amended its claims multiple times, ultimately lowering the amount sought and presenting additional claims, including an unreceived final billing. Conversely, the respondent maintained that it had already compensated the petitioner adequately for the work completed, asserting that the services rendered did not meet acceptable quality standards.
RTC Decision
On November 16, 2009, the RTC ruled in favor of the petitioner, awarding it P1,153,534.09 plus legal interest and attorney's fees. The RTC dismissed the respondent's claims of defective work as unsubstantiated and noted that the respondent could not benefit from its claims of delay, as it had allowed the petitioner to continue work up until early November 2002.
CA Decision
The CA reversed the RTC's decision on July 17, 2013, declaring both parties in breach of the contract. It found the petitioner responsible for defective work and determined that the respondent also had obligations violated since it failed to allow the petitioner to rectify any defective work before hiring other contractors. Consequently, the CA ordered the petitioner to pay liquidated damages of P540,009.75 to the respondent.
Supreme Court's Ruling
The Supreme Court assessed whether the CA erred in reversing the RTC decision. It reiterated established jurisprudential exceptions that allow it to review factual issues where lower court findings are conflicting or neglected critical evidence. The Court found that the CA misapplied the legal principles surrounding breach of contract, particularly under Article 1192 of the Civil Code, asserting that the evidence did not substantiate the CA’s conclusion that both parties had equally breached the contract.
Insufficient Evidence of Fault
The Court highlighted that the respondent failed to meet the burden of proof regarding allegations of poor workmanship and inferior materials. The testimony provided lacked substantive evidence demonstrating that the petitioner’s work was indeed defective, and the respondent failed to properly reject defective materials at the time of delivery, which would have been standard operational practice.
Delay Attributable to Respondent
While acknowledging some delay attributed to the petitioner, the Court concluded that the primary cause of delay stemmed from modifications ordered by the respondent
...continue readingCase Syllabus (G.R. No. 212058)
Nature of the Case
- The case is a Petition for Review under Rule 45 of the Rules of Court.
- The petitioner, Star Electric Corporation, challenges the Decision of the Court of Appeals (CA) in CA-G.R. CV No. 95008.
- The CA's ruling reversed and set aside the Regional Trial Court (RTC) of Parañaque City's Decision, which had granted Star Electric Corporation's complaint for the collection of a sum of money against R & G Construction Development and Trading, Inc.
Facts of the Case
- In May 2002, Star Electric Corporation, functioning as a sub-contractor, entered into a Construction Contract with R & G Construction for the installation of electrical, plumbing, and mechanical works at the Grami Empire Hotel, with a contract value of P2,571,457.21.
- Payments were structured via the progress billing method, with an initial down payment of P500,000 and an advance payment of P80,000 made by R & G.
- Subsequently, R & G refused to pay for the progress billings despite multiple demands from Star Electric.
- On September 20, 2002, Star Electric notified R & G of its intent to halt work until payment was received but expressed willingness to terminate the contract while preserving its claim for payment.
- R & G responded on September 21, 2002, with a letter terminating the contract, citing poor workmanship and substandard materials as justifications.
- A series of correspondences ensued, with Star Electric asserting that delays were due to modifications in construction plans and requesting an independent appraisal of the completion status.
- Eventually, Star Electric filed a complaint o