De Castro v. Tamparong
REITERATIONFacts
The Antecedents: Mariano A. de Castro, a building contractor, entered into a contract with Casimiro Tamparong to build a residential house for P18,000, to be completed within 150 working days from August 1, 1937. The performance was guaranteed by Luzon Surety Co., Inc. for P4,500. Subsequently, for an additional P2,000, the contractor agreed to do extra work, guaranteed by the surety for P3,000. An extension of 60 working days was granted, making the completion date April 5, 1938, though the house was occupied in mid-May 1938. During construction, the contractor failed to supply materials and funds for artisans and laborers. Consequently, the owner was authorized to pay for payrolls and materials, with verification by the engineer in charge. The owner paid the stipulated price but the contractor failed to pay for materials and advanced funds. The owner sued the contractor and the surety company. Procedural History: The trial court rendered a judgment directing the defendants, jointly and severally, to pay the plaintiff P7,346.07, plus interest and costs. The defendants appealed to the Court of Appeals. The Petition: The Court of Appeals affirmed the trial court's decision. The petitioner (contractor) sought review by certiorari before the Supreme Court, alleging errors in the appellate court's findings regarding his failure to supply materials and funds, the acceptance of Exhibit P, and the rejection of Exhibit 9.
Issue(s)
Whether the petitioner violated the building contract by failing to supply materials and funds for labor. Whether Exhibit P was admissible as evidence. Whether Exhibit 9 should have been admitted. Whether the acceptance and occupation of the building by the owner constitute an acknowledgment of performance in accordance with the contract.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals. The Court found no reversible error in the appellate court's judgment.
Ratio Decidendi
On the alleged violation of the building contract: The Court held that the petitioner violated the contract by failing to supply materials and funds for labor, as evidenced by the owner's authorization to make payments for these items. The appellate court's use of the word "send" was interpreted as synonymous with "furnish" or "supply," accurately reflecting the contractor's omission. This failure on the part of the contractor was a violation of the contract, making both the contractor and the surety liable. On the admissibility of Exhibit P: The Court ruled that the admissibility of Exhibit P was a factual issue that had been debated and decided by the Court of Appeals based on witness testimony. Given that the record was partially destroyed and reconstituted, the Supreme Court was not at liberty to impute error to the appellate court's factual findings on this matter. On the rejection of Exhibit 9: Similar to the admissibility of Exhibit P, the rejection of Exhibit 9 was also considered a factual issue concerning the weight and value of documents and related testimonies. The Supreme Court deferred to the findings of the Court of Appeals on this point, as it was not a question of law. On acceptance and occupation as acknowledgment of performance: The Court clarified that the doctrine stating acceptance and occupation amount to acknowledgment of performance applies only when such acceptance is "without objection" or "without protest." In this case, the owner had protested and filed a complaint before occupying the building, thus negating the application of this doctrine. The owner's actions demonstrated a clear objection to the performance, not an acknowledgment of its compliance.
Main Doctrine
The acceptance and occupation of a building by the owner, without objection or protest, may amount to an acknowledgment of performance of the work in accordance with the contract. However, if the owner has protested and filed a complaint prior to occupation, this doctrine does not apply.