GR 213229; (December, 2015) (Digest)
G.R. No. 213229, December 09, 2015
FILINVEST ALABANG, INC., PETITIONER, VS. CENTURY IRON WORKS, INC., RESPONDENT.
FACTS
Petitioner Filinvest Alabang, Inc. awarded contracts to respondent Century Iron Works, Inc. for metal works at a supermall, evidenced by an Agreement for Construction and supplemented by General Conditions. After project completion, respondent demanded payment of withheld sums: a retention fee balance of ₱40,880, an additional deduction of ₱227,500 allegedly for substandard work, and ₱1,123,708.68 for an additional scenic elevator enclosure. Petitioner refused, claiming the right to withhold the first two amounts due to defective workmanship and asserting that the lump-sum contract price of ₱29,000,000 precluded liability for the additional elevator absent a specific instruction.
Respondent filed a sum of money case. The Regional Trial Court (RTC) partially granted the claim, ordering payment of ₱227,500 plus interest, finding petitioner estopped from claiming damages after issuing a Certificate of Completion and Acceptance. However, it denied the other claims, ruling the contract was lump-sum, fixing petitioner’s liability. On appeal, the Court of Appeals (CA) modified the decision, ordering petitioner to pay all three amounts with interest.
ISSUE
Whether the CA correctly ordered petitioner to pay respondent the withheld amounts of ₱40,880, ₱227,500, and ₱1,123,708.68.
RULING
The Supreme Court denied the petition, affirming the CA. On the first two amounts, the Court upheld the factual finding that petitioner issued a Certificate of Completion and Acceptance. This act estopped petitioner from later asserting substandard workmanship to justify withholding the ₱40,880 retention fee and the ₱227,500 deduction. Under the doctrine of estoppel, a party cannot be permitted to falsify its own prior representation upon which another has relied.
Regarding the cost of the additional elevator enclosure, the Court found no error in the CA’s conclusion that the contract was not a strictly fixed lump-sum agreement. The evidence, including petitioner’s own communications and payment for related variations, demonstrated that the parties had agreed to this extra work. Holding petitioner liable prevents unjust enrichment, as it accepted and benefited from the additional structure. The petition raised questions of fact, which are not reviewable under Rule 45, as the findings of the RTC and CA were consistent and supported by evidence.