G.R. No. 212058 - STAR ELECTRIC CORPORATION, VS. R & G CONSTRUCTION DEVELOPMENT AND TRADING, INC..D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE, premises considered, judgment is herewith rendered in favor of plaintiff Star Electric Corporation and defendant R&G Construction Development and Trading, Inc. is ordered to pay plaintiff the amount of One Million One Hundred Fifty-Three Thousand Six Hundred Thirty-four pesos and Nine Centavos (Php1,153,634.09) representing the unpaid value of the service contract to the defendant company, with legal interest from demand; the amount of One Hundred Twenty Thousand Pesos (Php120,000) representing Attorney's fees and costs of suit. [23] Respondent then appealed to the CA. CA Decision By Decision dated July 17, 2013, [24] the CA reversed and set aside the RTC Decision and entered a new one dismissing petitioner's complaint and ordering the latter to pay respondent P540,009.75 as liquidated damages. The appellate court predicated its ruling on the following premises: petitioner's work was, indeed, defective and that the materials it installed in the building were substandard. On the other hand, respondent likewise violated its obligations under the Construction Contract when it entered into agreements with CP Giron and PTL Power without giving petitioner the opportunity to repair its defective work. Being both guilty of breach of contract, the CA declared that each party should bear its own loss. The CA held: What is clear was that the works performed by the plaintiff-appellee were defective and the materials it used were of poor quality leaving the defendant-appellant with no choice but to demand for the rectification of the same at plaintiff-appellee's expense and thereafter engaged the services of another contractor to remedy the defective works and finish the project as well. In fact, when defendant-appellant obtained the services of CP Giron Enterprises and PTL Power Corporation, it was charged Php558,730.00 and Php161,810.00, respectively, for the reworks, restorations, repairs, and rectifications these two sub-contractors had undertaken on the project. At any rate, we find that the defendant-appellant has its own share of breach of the Construction Contract. Like the plaintiff-appellee, it likewise failed to comply with its undertaking to afford the plaintiff-appellee the opportunity to rectify the defects in their works and proceeded instead to unilaterally hire another contractor to finish the project. In its letter dated September 24, 2004, plaintiff-appellee explained that it had tried to replace and correct immediately the works which defendant-appellant found unacceptable. Yet, the former found their efforts and works still way below their standard notwithstanding defendant- appellant's close monitoring. x x x x Using as yardstick the foregoing ruling, we are of the view that both parties committed breach of certain provisions in their Construction Contract and each shall bear their own loss. Thus, whatever collectible plaintiff-appellee has with defendant-appellant, the same shall be reasonably offset to the expenses the latte