G.R. No. 147614 - H.L. CARLOS CONSTRUCTION, INC., VS. MARINA PROPERTIES CORPORATION, JESUS K. TYPOCO SR. AND TAN YU.D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE, the judgment appealed from is hereby REVERSED and SET ASIDE , and a new one entered DISMISSING the [petitioners] Complaint, AND PARTIALLY GRANTING THE [RESPONDENT-CORPORATIONS] COUNTERCLAIM, IN THAT THE [PETITIONER] IS DIRECTED TO PAY UNTO THE [RESPONDENT-CORPORATION] THE SUM OF P4,604,579.00 IN ACTUAL DAMAGES PLUS P3,549,416.00 AS AND FOR LIQUIDATED DAMAGES. [4] The Facts The facts of the case, summarized by the Court of Appeals (CA), are as follows: [Respondent] MARINA PROPERTIES CORPORATION (MPC for brevity) is engaged in the business of real estate development. On May 10, 1988, MPC entered into a contract [5] with [Petitioner] H.[L.] CARLOS CONSTRUCTION, INC. (HLC) to construct Phase III of a condominium complex called MARINA BAYHOMES CONDOMINIUM PROJECT, consisting of townhouses and villas, totaling 31 housing units, for a total consideration of P38,580,609.00, within a period of 365 days from receipt of Notice to Proceed. The original completion date of the project was May 16, 1989, but it was extended to October 31, 1989 with a grace period until November 30, 1989. [6] The contract was signed by Jovencio F. Cinco, president of MPC, and Honorio L. Carlos, president of HLC. On December 15, 1989, HLC instituted this case for sum of money against not only MPC but also against the latters alleged president, [Respondent] Jesus K. Typoco, Sr. (Typoco) and [Respondent] Tan Yu (Tan), seeking the payment of various sums with an aggregate amount of P14 million pesos, broken down as follows: a) P7,065,885.03 for costs of labor escalation, change orders and material price escalation; b) P2,000,000.00 as additional compensatory damages, exclusive of the cost of suit. c) P3,147,992.00 representing retention money allegedly withheld by MPC on HLCs Progress Billings as of January 1990, and d) P2,000,000.00 representing the value of construction materials allegedly withheld/detained by MPC. Traversing the allegations of the complaint, [respondents] filed separate answers, whereby the two individual [respondents] alleged that they are not parties to the Construction Contract and Amendatory Contract and are therefore not liable to HLC. [Respondent] MPC on the other hand alleged that the [petitioner] has no cause of action against it and that it (HLC) is not entitled to its various claims. MPC interposed a counterclaim in the aggregate sum of P68,296,227.14 for actual and compensatory damages, liquidated damages, unliquidated advances, and attorneys fees. [7] On May 15, 1997, the trial court [8] ruled as follows: [9] WHEREFORE, premises above considered, judgment is hereby rendered for [Petitioner] H.L. CARLOS CONSTRUCTION, INC. and as against [Respondents] MARINA PROPERTIES CORPORATION, TAN YU, and JESUS K. TYPOCO, SR., who are hereby ordered to pay, jointly and severally, the [petitioner], as follows: 1. the amount of P7,065,885.03, representing unpaid labor escalation costs, change orders and material price escalations, plus 12% in