G.R. No. 168074 - EMPIRE EAST LAND HOLDINGS, INC., VS. CAPITOL INDUSTRIAL CONSTRUCTION GROUPS, INC..DECISION - Supreme Court E-Library

Ruling

Accordingly, respondent's completion date of the project was fixed on January 21, 1998. [9] Prior to and during the construction period, changes in circumstances arose, prompting the parties to make adjustments in the initial terms of their contract. The following pertinent changes were mutually agreed upon by the parties: First , as the bulk excavation contractor refused to return to the project site, petitioner directed respondent to continue the excavation work; [10] Second , in addition to respondent's scope of work, it was made to perform side trimmings. Third, petitioner directed respondent to reduce the monthly target accomplishment to P1 million worth of work and up to one (1) floor only. [11] Fourth, the following were deleted from respondent's scope of work: a) Masonry works and all related items from 6 th floor to roof deck; b) All exterior masonry works from 4 th floor to roof deck; and c) Garbage chute. [12] Fifth , as a consequence of the deletion of the above works, the contract price was reduced to P62,828,826.53. [13] Sixth , the parties agreed: that the items of work or any part thereof not completed by the respondent as of February 28, 1999 should be deleted from its contract, except demobilization; the punch list items under respondent's scope of responsibility not yet made good/corrected as of the same period shall be done by others at a fixed cost to be agreed upon by all concerned; and respondent should be compensated for the cost of utilities it installed but were still needed by other contractors to complete their work. [14] Lastly , they agreed that a joint quantification should be done to establish the bottom line figures as to what were to be deleted from the respondent's contract and the cost of completing the punch list items which were deductible from respondent's receivables. [15] In view of the limitation on the target accomplishment to P1 million worth of work per month, respondent asked that the topping-off be moved to February 1999. Respondent likewise requested a price adjustment with respect to overhead and equipment expenses and legislated additional labor cost. These requests were not, however, acted upon by petitioner. [16] After the completion of the side trimmings and excavation of the building's foundation, respondent demanded the payment of P2,248,507.70 and P1,805,225.90, respectively. Instead of paying the amount, petitioner agreed with the respondent on a negotiated amount of P900,000.00 for side trimmings. [17] However, respondent's claim for foundation excavation was not acted upon. [18] During the construction period, petitioner granted, on separate occasions, respondent's requests for payroll and material accommodations. [19] On March 13, 1999, respondent submitted its final billing, amounting to P4,442,430.90 representing its work accomplishment and retention, less all deductions. On March 23, 1999, a punch list was drawn as a result of the joint inspection undertaken by the parties. Petitioner