Tangco v. Court of Appeals
REITERATIONFacts
The Antecedents: Jose S. Marquez, an architect, entered into a contract with Rosalia S. De Tangco for the construction of a residential building for P45,000, with additional payment for extras. Marquez engaged Ricardo Suñga as a subcontractor to erect the building for P42,000, exclusive of extras, under Marquez's supervision. Mrs. Tangco was aware of Suñga's involvement. When the construction was nearing completion, Mrs. Tangco stopped all work and took possession of the building. Procedural History: Suñga claimed a balance of P400 from the original contract price and P5,920 for additional extra work. The Court of First Instance dismissed Suñga's complaint, ruling that Mrs. Tangco had no contractual obligation to Suñga as she was not privy to the subcontract. The Court of Appeals reversed this decision, holding Mrs. Tangco liable for the amounts claimed. The Appeal: Mrs. Tangco appealed to the Supreme Court via a petition for certiorari, arguing that she had no direct contractual obligation to Suñga. She admitted liability for P1,300 in extras but disputed the P5,920 claim for additional extra work, asserting it was not done at her instance or with her knowledge of expected payment. She also claimed to have paid P44,300, which, with P2,000 retained for unfinished work, offset the P45,000 contract price and P1,300 for extras.
Issue(s)
Whether Mrs. Tangco is liable to Suñga for the P400 balance of the original contract price. Whether Mrs. Tangco is liable to Suñga for the P1,300 worth of extras ordered by her. Whether Mrs. Tangco is liable to Suñga for the P5,920 worth of additional extra work.
Ruling
The Supreme Court affirmed the Court of Appeals' decision sentencing Mrs. Tangco to pay P400 and P1,300 with legal interest. However, it reversed the decision regarding the P5,920 claim for additional extra work, absolving Mrs. Tangco from this liability.
Ratio Decidendi
On Issue 1 (P400 balance): The Court affirmed the Court of Appeals' finding that Mrs. Tangco had paid a total of P41,000, and with the P300 credit for unfinished work (wainscoting), her total credit was P41,300. This, when subtracted from the P42,000 agreed upon between Marquez and Suñga, left a balance of P400 in Suñga's favor. The Court held that this finding of fact by the Court of Appeals was conclusive and binding on the Supreme Court in a petition for certiorari. On Issue 2 (P1,300 for extras): The Court found no error in the Court of Appeals' decision holding Mrs. Tangco liable for the P1,300 worth of extras. Mrs. Tangco herself admitted in her brief her obligation to pay for these extras, which were ordered by her. Therefore, this part of the judgment of the Court of Appeals was affirmed. On Issue 3 (P5,920 for additional extra work): The Court reversed the Court of Appeals' decision on this point. While the Court of Appeals found that this extra work was done, there was no finding that it was performed at Mrs. Tangco's instance or with her knowledge that she was expected to pay for it. The Court distinguished this from the P1,300 extras, which were explicitly ordered by Mrs. Tangco. The doctrine of quasi-contract, invoked by the Court of Appeals, was deemed inapplicable because the work was not shown to have been done for Mrs. Tangco's benefit under circumstances where she would be unjustly enriched without a basis for her liability. The Court emphasized the need for Mrs. Tangco's consent and knowledge of expected payment for such additional extra work.
Main Doctrine
A party not privy to a subcontract is generally not liable for its obligations. However, liability for extra work may arise if such work was performed at the owner's instance or with their knowledge and consent, with the expectation of payment. Findings of fact by the Court of Appeals are conclusive on the Supreme Court, but errors of law are subject to review.