GR 196383; (October, 2012) (Digest)
G.R. No. 196383 ; October 15, 2012
ROBERT PASCUA, doing business under the name and style TRI-WEB CONSTRUCTION, Petitioner, vs. G & G REAL TV CORPORATION, Respondent.
FACTS
Petitioner Robert Pascua entered into a construction agreement with respondent G & G Real TV Corporation for a commercial building and kitchen/dining hall. During the project, respondent required petitioner to undertake numerous additional and change order works, which necessitated the temporary halt of the original construction. Petitioner completed the project, albeit behind schedule, and fulfilled all punch-listed repair requirements. Respondent, however, refused to pay the outstanding contract balance.
The Regional Trial Court ruled in favor of petitioner, finding the delay reasonable and attributable to the respondent’s instructed additional works. The Court of Appeals initially affirmed this with modification but, upon reconsideration, reversed its stance. Its Amended Decision ruled against petitioner, holding that the delay was caused by petitioner’s acceptance of other unrelated contracts, thereby forfeiting his right to the unpaid balance and ordering him to pay penalties and refunds to the respondent.
ISSUE
Whether petitioner is entitled to payment of the outstanding balance of the contract price despite the project’s delayed completion.
RULING
Yes. The Supreme Court reversed the Court of Appeals’ Amended Decision and reinstated the trial court’s ruling. The legal logic is anchored on the reciprocal obligations in a construction contract and the principle of quantum meruit. The contract imposes on the contractor the obligation to build and on the owner the obligation to pay upon completion. The Court found that petitioner had completed the project. The cause of the delay was sufficiently proven to be the respondent’s own directives for additional and change order works, which were outside the original agreement and which petitioner was required to prioritize. The respondent did not effectively refute this. Consequently, petitioner cannot be penalized for a delay he did not cause. To deny payment after the contractor has completed the work and the owner has enjoyed its benefits would constitute unjust enrichment. Under the principle of quantum meruit, a contractor is entitled to recover the reasonable value of services rendered to prevent such inequity. Therefore, respondent is obligated to pay the remaining contract balance.