CASE

Fort Bonifacio Development

Corporation vs. Judge Sorongon GR
No. 176703 May 8, 2009

FACTS

ISSUE

Petitioner entered into a trade contract with Maxco wherein

Maxco would undertake the structural and partial architectural
package of the BRCP 1. Later petitioner accused Maxco of delay
in completion of its work and sent the latter a notice of
termination.

Jurisdiction of CIAC

Liquidated Damages charged

against contractor

COJCOLDS and BTL entered into a Construction Contract6

(Contract) for the latters construction of the formers
The President of the Church of the
meetinghouse facility at Barangay Cabug, Medina, Misamis
Latter Day Saints vs. BTL
Change Orders/ Additional Works
Oriental (Medina Project). However, due to bad weather
Construction GR No. 176439 January
not charged against the
conditions, power failures, and revisions in the construction
15, 2014
developer
plans, among others, the completion date of the Medina Project
was extended.

Cost Overrun charged against

contractor

Respondent Insular engaged the services of Urban to construct

a six-storey building within a period not to exceed 365 days but
Urban Consolidated vs Insular Life GR
the construction was beset by several delays. When Urban
No. 180824 August 28, 2009
tendered the building for acceptance, Insular refused to accept
the same.

Filinvest, awarded to defendant Pacific the development of its

Filinvest vs. CA (Trial by Comissioner) residential subdivisions located at Payatas, Quezon City.
GR No. 138980 September 20, 2005 Notwithstanding three extensions granted by plaintiff to
defendant, the latter failed to finish the contracted works.

Liquidated Damages charged

against contractor

Liquidated Damages reduced

Liquidated Damages charged

against contractor

Liquidated Damages reduced

Liquidated Damages charged

against contractor

H.L. Carlos Construction vs. Marina

Properties Corp. GR No. 164614
January 29, 2004

Respondent MPC entered into a contract with HLC to construct

Phase III of a condominium complex called MARINA BAYHOMES
CONDOMINIUM PROJECT, within a period of 365 days. The
original completion date of the project was May 16, 1989, but it
Change Orders/ Additional Works
was extended to October 31, 1989 with a grace period until
charged against the developer
November 30, 1989.

HELD

% of work
completed

The CIAC has no jurisdiction over the case. The parties to a dispute must agree to submit the same to voluntary arbitration. EO 1008

1.) Delay not seriously disputed in the case 2.) Architect's recommendation binding. BTL sought 304 days, Architect only recommended 190 days. 3.) Still delayed despite extension
Article 1724 of the Civil Code governs the recovery of additional costs in contracts for a stipulated price (such as fixed lump-sum contracts), as well as the increase in price for any additional work
due to a subsequent change in the original plans and specifications. Based on the same provision, such added costs can only be allowed upon the: (a) written authority from the developer or project
owner ordering or allowing the written changes in work; and (b) written agreement of parties with regard to the increase in price or cost due to the change in work or design modification. Case law
instructs that compliance with these two (2) requisites is a condition precedent for recovery. The absence of one or the other condition thus bars the claim of additional costs. Notably, neither the
authority for the changes made nor the additional price to be paid therefor may be proved by any evidence other than the written authority and agreement as above-mentioned.
In these cases, records reveal that there is neither a written authorization nor agreement covering the additional price to be paid for the concrete retaining wall. This confirms the CAs finding that
the construction of the perimeter wall of the Medina Project, which is included in the original plans and specifications for the same, already subsumes the construction of the concrete retaining
wall.43 Accordingly, COJCOLDS should not pay the amount of P804,460.89 claimed by BTL as additional cost for the same.

98%

In similar regard, the COJCOLDS should not be held liable for the costs of the additional works taken under Change Order Nos. 8 to 12 amounting to P344,360.16 as claimed by BTL. As correctly
observed by the CA, BTL had, in fact, requested COJCOLDS to make the payments therefor directly to its suppliers in view of its financial losses in another project.44 Hence, considering that
COJCOLDSs payment to BTLs suppliers already covered the costs of said additional works upon its own request and to its own credit,45 BTL maintains no right to pursue such claim.

Due to BTLs delay which impelled COJCOLDS to terminate the Contract and subsequently hire the services of another contractor, i.e., Vigor, to finish the Medina Project, the Court equally agrees
with the CAs finding that COJCOLDS incurred a cost overrun of P526,400.00
At any rate, the period for completion for said change orders was already considered by the parties when they moved the deadline from June 30, 1991 to September 30, 1991. Also, the delay in the
construction of the building was caused by Urbans lack of necessary funds and its failure to facilitate the delivery of materials at the construction site as provided in the GCA.
Absence of bad faith on the part of Urban and the fact that the project was 97% complete at the time it was turned over to Insular. In addition, we noted that Insular is likewise not entirely
blameless considering that it failed to pay Urban P1,144,030.94 representing the balance of unpaid change orders and to return the retention money in the amount of P2,134,908.80, or a total of
P3,578,939.74. Had Insular released said amount upon demand, the same could have been used by Urban to comply with its obligation to purchase the needed construction materials and to
expedite the completion of the project.

97%

Pecorp did not finish project on date agreed upon

1.) there has been substantial compliance in good faith on the part of Pecorp which renders unconscionable the application of the full force of the penalty especially if we consider that in 1979 the
amount of P15,000.00 as penalty for delay per day was quite steep indeed. 2.) Nothing in the records suggests that Pecorps delay in the performance of 5.47% of the contract was due to it having
acted negligently or in bad faith. 3.) Finally, we factor in the fact that Filinvest is not free of blame either as it likewise failed to do that which was incumbent upon it, i.e., it failed to pay Pecorp for
work actually performed by the latter in the total amount of P1,881,867.66

94.53%

Did not finish project.

Evidence on record further reveals that MPC approved some change order jobs despite the absence of any supplementary agreement. In its Over-all Summary of Reconciled Quantities as of
September 6, 1989 (Annex C),[28] it valued petitioners valid claim therefor at P79,340.52. After noting that the claim had extremely been bloated, Atty. Laureta, in-house counsel for respondent
corporation, affirmed as valid the amount stated in the summary.[29]
Petitioner may have failed to show the construction memoranda covering its claim, but it inarguably performed extra work that was accepted by MPC. Hence, we will consider Annex C as the proper
valuation thereof.
Under the principle of quantum meruit, a contractor is allowed to recover the reasonable value of the thing or services rendered despite the lack of a written contract, in order to avoid unjust
enrichment.[30] Quantum meruit means that in an action for work and labor, payment shall be made in such amount as the plaintiff reasonably deserves.[31] To deny payment for a building almost
completed and already occupied would be to permit unjust enrichment at the expense of the contractor.[32]
The CA held that since Billing No. 24 did not include any claim for additional work, such work had presumably been previously paid for. This reasoning is not correct. It is beyond dispute that the
change orders and extra work were billed separately from the usual progress billings petitioner sent to MPC.

80.00%