Chua Tiong Tay v. Honorable Court of Appeals
REITERATIONFacts
The Antecedents: Petitioner Chua Tiong Tay (Chua) and private respondent Goldrock Construction & Development Corporation (Goldrock) entered into a Memorandum of Agreement (MOA) for the construction of a 12-door apartment building for P1.8 Million. An Addendum and Amendment increased the cost to P2,060,000.00 and stipulated that construction would be under the supervision of an architect, civil engineer, or electrical engineer designated by Chua, whose decision would be final and binding. Construction began on March 28, 1980. Goldrock executed additional work orders not specified in the original agreement, including converting the mezzanine to a second floor, extending the ground floor, finishing exterior walls with pebble wash, and increasing the length of second-floor comfort rooms. The certificate of occupancy was delivered to and accepted by Chua on December 16, 1980. Procedural History: Goldrock sued Chua on June 20, 1983, to recover P330,442.00 for the cost of additional works, plus liquidated damages and attorney's fees, alleging Chua's payments were inadequate. Chua claimed the additional works were unauthorized, that Goldrock was liable for penalties due to delay, and that defects in the building necessitated additional costs for him, which should be deducted. The trial court initially ruled in favor of Goldrock, ordering Chua to pay P229,201.72 plus interest and attorney's fees. Upon partial reconsideration, the trial court modified its decision, ordering Chua to pay P809,401.72 plus interest and attorney's fees. Chua appealed to the Court of Appeals, which affirmed the trial court's decision in toto. Chua's motion for reconsideration was denied, leading to the present petition for review. The Petition: Petitioner Chua seeks reversal of the Court of Appeals' decision, primarily on the grounds that the additional works were unauthorized and that Goldrock was liable for penalties due to delay and for refusing to repair defects.
Issue(s)
Whether the additional works performed by Goldrock were authorized and binding upon Chua. Whether Goldrock is liable for liquidated damages due to delay in the completion of the project. Whether Chua is entitled to deduct the cost of repairs for alleged defects from the amount due to Goldrock.
Ruling
The petition is denied. The decision of the Court of Appeals affirming the trial court's decision in favor of Goldrock Construction & Development Corporation is affirmed.
Ratio Decidendi
On the authorization of additional works: The Court held that the factual findings of the lower courts regarding the authorization of additional works were binding and could not be reviewed on appeal, as there were no exceptional circumstances warranting such review. The Court noted that Stipulation No. 7 of the MOA provided that any deviation, alteration, or addition made by the owner would incur additional expenses borne by the owner. Furthermore, the Addendum stipulated that construction would be under the supervision of an engineer designated by Chua, whose decision would be final and binding. The Court found that the project supervisor, Joey Gozum, likely signed the project amendments upon prior consultation with Chua, especially considering the substantial costs involved. The Court also reasoned that it would be foolhardy for Goldrock to undertake such alterations without assurance of payment, and these modifications were to Chua's advantage. Therefore, Chua was bound by the additional works on equitable considerations. On the issue of delay and liquidated damages: The Court agreed with the Court of Appeals that there was no unreasonable delay in the completion of the construction. The 240-day period for completion was to be reckoned from the issuance of the building permit, which was March 26, 1980, and released on March 28, 1980. The Court found that Chua erroneously used an earlier date and the certificate of occupancy as the completion date. Even with correct reckoning, the delay was minimal. Crucially, Change Order No. 1 explicitly granted an additional thirty (30) days to the original contract time. Considering this additional time, and the time required for other project amendments, the project completion could not be considered unduly delayed. On the claim for reimbursement for repairs: The Court found no merit in Chua's claim for reimbursement for repairs. The Court of Appeals correctly held that there was nothing in the written agreements obligating Goldrock to bear these expenses. The trial court noted that Chua failed to show he had seasonably presented this claim to Goldrock and that the repairs were effected almost three months after he took possession. The trial court was inclined to believe that the repairs might have become necessary due to damages attributable to the occupant's use of the building, rather than defects from construction.
Main Doctrine
The factual findings of the trial court and the Court of Appeals are generally final and conclusive and may not be reviewed on appeal, except under specific exceptional circumstances such as grave abuse of discretion or misapprehension of facts.