Case Summary (G.R. No. 223822)
Facts of the Case
On December 8, 2003, Fermida entered into a contract with Ultra Mar to construct a warehouse for a total price of PhP1,734,740. During the project, various modifications were made at Ultra Mar's request, including changes to the roof coverage and additional work. Following completion on January 17, 2004, Fermida issued a billing statement that excluded costs for these variations. Despite performing repairs upon request due to Ultra Mar's dissatisfaction with the work quality, Ultra Mar refused payment, claiming deficiencies and failure to provide necessary documentation. Subsequently, Fermida filed a complaint for collection against Ultra Mar.
Procedural History
The Regional Trial Court (RTC) ordered an ocular inspection of the construction site and scheduled a pre-trial conference, which encountered several postponements due to Ultra Mar's counsel's motions. Ultimately, Ultra Mar failed to appear or file a pre-trial brief, leading the RTC to declare it in default and allow Fermida to present evidence ex parte. Ultra Mar later attempted to lift the default order, citing its counsel's health issues as the reason for non-compliance. The RTC denied these motions, asserting that such failures warranted Fermida's advance with the case.
RTC Decision
On October 7, 2004, the RTC ruled in favor of Fermida, ordering Ultra Mar to pay PhP1,106,000.38, along with interest and other fees. Ultra Mar's attempts for reconsideration were rejected, leading to an appeal to the Court of Appeals (CA). The CA found no error in the RTC's handling of the case and upheld the decision, ruling that Fermida had satisfactorily established its claims.
Court of Appeals Findings
The CA's evaluation reaffirmed Fermida's assertion that the construction agreement was fulfilled despite Ultra Mar's contention of defective work. The independent engineer's reports highlighted completion issues but also addressed that the 10% retention from contract payments was mitigated by a Surety Bond secured by Fermida. The CA modified the RTC order, affirming Fermida's entitlement to payment while allowing Ultra Mar to retain the 10% retention amount pending any defects correction.
Issues on Appeal
Ultra Mar’s petition to the Supreme Court focused on alleged reversible errors by the CA regarding the default order and arguing that its counsel's negligence should excuse its non-compliance with pre-trial obligations. The petitioner maintained that it had a valid case and meritorious defenses that were not considered due to its default status.
Ruling of the Court
The Supreme Court ultimately ruled against Ultra Mar, affirming th
...continue readingCase Syllabus (G.R. No. 223822)
Case Background
- The case revolves around a Petition for Review under Rule 45, challenging the Decision dated July 28, 2009, and Resolution dated February 9, 2010, of the Court of Appeals (CA) in CA G.R. CV No. 86540.
- The CA affirmed with modifications the Decision dated October 7, 2004, of the Regional Trial Court (RTC), which ordered Ultra Mar Aqua Resource, Inc. (Ultra Mar) to pay Fermida Construction Services (Fermida) for construction costs related to a warehouse.
Facts of the Case
- On December 8, 2003, Fermida entered into a Contract Agreement with Ultra Mar for constructing a warehouse in Wawandue, Subic, Zambales, with a contract price of PhP 1,734,740.
- Variations to the original construction plan were made at Ultra Mar's request, including adjustments to the roof coverage, drainage canal, painting, and electrical work.
- Upon completion of the Project on January 17, 2004, Fermida sent a Billing Statement excluding variation costs.
- Fermida secured a Surety Bond to cover a 10% retention for defects in materials and workmanship and executed a Contractor’s Affidavit confirming all claims and obligations were settled.
- Ultra Mar expressed dissatisfaction with Fermida's work, leading to repairs undertaken by Fermida and subsequent Billing Statements sent to Ultra Mar.
- Ultra Mar refused payment, citing allegations of Fermida's failure to submit necessary reports, substandard work, and project delays.
- Fermida filed a Complaint for Collection of Sum of Money with Prayer for Injunction before the RTC.