Choy v. Heredia
REITERATIONFacts
The Antecedents: On December 1, 1902, Go-Sitco and Genaro Heredia entered into a contract for the construction of two houses for P14,500 Mexican currency. On August 21, 1903, Go-Sitco, as attorney-in-fact for Go-Sitco, and Heredia signed a document acknowledging the completion of the houses. The document stated that P13,165 had been paid, leaving a balance of P1,335. It also noted an increase in materials amounting to P765, making a total of P2,100 due. Go-Sitco guaranteed the work and materials for three years, with an additional P400 payment if no damages arose from earthquakes or fire. Procedural History: On November 3, 1905, three years after the August 21, 1903 document, the plaintiff filed an action to recover the P2,100 and the P400 gratification. The lower court found that P1,000 had been paid after the contract, awarding P1,100 to the plaintiff but denying the P400 gratification. The defendant appealed. The Petition: The defendant appealed the lower court's decision.
Issue(s)
Whether the defendant's denial under oath of the execution of the document of August 21, 1903, should have been allowed as an amendment to his answer. Whether the execution of the document of August 21, 1903, was obtained by fraud or deceit. Whether the plaintiff was entitled to the P400 gratification.
Ruling
The Supreme Court affirmed the judgment of the lower court, ordering the defendant-appellant to pay the plaintiff-appellee P1,100, with costs against the appellant. The P400 gratification was denied.
Ratio Decidendi
On the amendment of the answer: The Court found it unnecessary to determine if the refusal to allow the amendment was error because the defendant admitted executing the document in his brief, albeit claiming fraud. The defendant could have presented evidence of deceit under his original answer. The Court noted that no evidence was presented to show fraud or deceit in the execution of the document, nor was any evidence ruled out by the court for this purpose. On fraud and deceit: The Court found no evidence that the execution of the document was obtained by fraud or deceit. The defendant had ample opportunity to examine the work before signing and his express acceptance without protest constituted an acknowledgment of substantial compliance with the contract. The fact that some materials used were not as specified did not prove fraud in the execution of the contract itself. On the P400 gratification: The Court held that the P400 was an additional payment contingent upon the guarantee period of three years being fulfilled without damage from earthquakes or fire. The plaintiff was entitled to the balance due on the original contract regardless of the guarantee's fulfillment. However, the plaintiff was not entitled to the P400 unless he proved compliance with the guarantee. The lower court found, based on the defendant's evidence, that the guarantee was not fulfilled, thus correctly refusing the P400. The defendant's failure to prove the guarantee was not fulfilled did not affect the plaintiff's right to the balance due on the original contract.
Main Doctrine
A party who accepts work without protest, after ample opportunity to examine it, is deemed to have acknowledged substantial compliance with the contract, and cannot later claim fraud or deceit based on defects that could have been discovered prior to acceptance. The right to recover the balance due on a contract is distinct from the right to recover additional payments contingent on a guarantee period, and failure to prove compliance with the guarantee does not affect the right to the balance.