GR 199781; (February, 2013) (Digest)
G.R. No. 199781 ; February 18, 2013
LICOMCEN, INC., Petitioner, vs. ENGR. SALVADOR ABAINZA, doing business under the name and style “ADS INDUSTRIAL EQUIPMENT”, Respondent.
FACTS
Respondent Engr. Salvador Abainza was hired by Liberty Commercial Center, Inc. to undertake the supply, fabrication, and installation of air-conditioning ductworks at the LCC Central Mall in Naga City. During the project’s execution, petitioner LICOMCEN, Inc., a sister company of Liberty with identical incorporators and directors, ordered substantial revisions to the original plan. These changes included altering duct shapes, relocating equipment, and increasing system capacity, which necessitated additional labor, materials, and equipment. Respondent completed the work, including the revisions, and submitted accomplishment reports approved by the project consultant. Petitioner paid only the amount corresponding to the original contract, leaving a balance of P1,777,202.80 for the extra work. Despite repeated demands, petitioner refused payment, prompting respondent to file a collection suit.
The Regional Trial Court ruled in favor of respondent, ordering petitioner to pay the balance plus interest and attorney’s fees. The court found that petitioner, through its authorized representatives, ordered and approved the revisions, and the additional costs were duly substantiated. The Court of Appeals affirmed this decision. Petitioner then appealed to the Supreme Court, invoking Article 1724 of the Civil Code, which requires written authorization and written agreement on price for any extra work in a construction contract.
ISSUE
Whether petitioner can raise the defense of non-compliance with Article 1724 of the Civil Code for the first time on appeal.
RULING
The Supreme Court denied the petition and affirmed the lower courts’ decisions. The Court held that petitioner is barred from raising Article 1724 as a new defense on appeal. Under Section 1, Rule 9 of the Rules of Court, defenses not pleaded in the answer or a motion to dismiss are deemed waived. Petitioner never raised this legal provision during the trial court proceedings. Allowing a new theory on appeal would deprive the respondent of the opportunity to present contrary evidence, violating due process. Moreover, the factual findings of the trial court, affirmed by the Court of Appeals, established that petitioner’s authorized personnel ordered the revisions and that the additional costs were incurred and remain unpaid. The principle of quantum meruit applies, entitling respondent to just compensation for the additional work performed and accepted by petitioner. The defense under Article 1724, even if considered, is inapplicable as the contract was effectively modified by the parties’ conduct, and petitioner cannot unjustly enrich itself by accepting benefits without payment.