Case Summary (G.R. No. L-35721)
Summary of Claims
Weldon Construction Corporation filed a complaint against Manuel Cancio to recover P62,378.83 as a commission, amounting to ten percent (10%) of the total construction cost, and P23,788.32 for additional work. Cancio contested the claim, asserting that the building was completed for the agreed price of P600,000.00, which had already been fully paid.
Relevant Documents
The disagreement hinges on two documents: Exhibit "A," which outlined a proposed contract for supervision of construction asserting a ten percent commission, and Exhibit "5," a formal building contract established at a fixed price of P600,000. The building contract included specific terms regarding labor, materials, and the pricing structure.
Court of First Instance Ruling
The trial court ruled in favor of Weldon Construction, concluding that Exhibit "A" constituted a valid supervisory contract and ordered Cancio to pay the claimed commission.
Court of Appeals Decision
On appeal, the Court of Appeals reversed the trial court's decision, highlighting that the agreement was indeed a construction contract for a stipulated price as outlined in Exhibit "5." The appellate court's ruling emphasized that the parties had performed obligations under this binding contract and dismissed Weldon's claims while also awarding damages to Cancio.
Motion for Reconsideration and Legal Interpretation
Both parties filed motions for reconsideration. The appellate court upheld its previous decision, dismissing the plaintiff's claims entirely. The legal issue at hand involved determining whether the relationship was governed by the claimed supervisory agreement or by the formal construction contract for a stipulated price. The court outlined that the interpretation of contracts typically involves ascertaining the true intentions and agreed terms of the parties.
Analysis of the Contractual Relationship
The court examined the two outlined agreements, pointing out that Exhibit "A" was merely a proposal lacking formal acceptance by Cancio. The advance payment of P10,000.00 was not deemed as acceptance of the terms in Exhibit "A" since a subsequent proposal (Exhibit "4") for a stipulated price was submitted, leading to the execution of the formal building contract (Exhibit "5"). It was established that the construction occurred under the terms defined in Exhibit "5," which had signatures an
...continue readingCase Syllabus (G.R. No. L-35721)
Case Overview
- The controversy arose from the construction of the Gay Theater building located at the intersection of Herran and Singalong Streets in Manila.
- Petitioner, Weldon Construction Corporation, sought recovery of P62,378.83 as a commission (10% of the total construction cost) and P23,788.32 for additional works from private respondent Manuel Cancio.
- The basis of the claim was an alleged contract for supervision of construction between Cancio and Weldon Construction's predecessor, which the petitioner aimed to enforce.
Parties Involved
- Petitioner: Weldon Construction Corporation, a successor-in-interest of Weldon Construction, which was originally owned by Lucio Lee.
- Respondent: Manuel Cancio, owner of the Gay Theater building.
Claims and Counterclaims
- The petitioner claimed:
- A commission of 10% of the total construction cost based on an alleged contract of supervision (Exhibit "A").
- Additional costs for works performed beyond the original contract.
- The respondent countered that the building was constructed for a stipulated price of P600,000, which had already been fully paid.
Documents Presented
- Exhibit "A": A proposal for the supervision of the construction, stating the terms including a 10% commission and a revolving fund of P10,000 for construction costs.
- Exhibit "5": A building contract detailing the terms of construction at a fixed price of P600,000, which was signed by both parties.
Court Proceedings
- The Court of First Instance of Manila ruled in favor of the petitioner, supporting the existence of a contract for supervision and ordering the payment of the commission.
- The Court of Appeals reversed this decision, asserting that the agreement was a construction contract for a stipulated price (Exhibit "5").
Key Issues
- The