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  • Federal Builders Inc Vs Foundation Specialists

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    Angelo Navarro
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    The Supreme Court denied Federal Builders Inc.'s petition and affirmed the Court of Appeals' decision with modification. The Court found that Foundation Specialists Inc. had completed 97% of the contracted work for the construction of a plaza, and any defects were due to Federal Builders' failure to deliver necessary cement on time. While Federal Builders claimed Foundation Specialists' work was incomplete, records showed the lack of cement was the cause. Therefore, the Court ordered Federal Builders to pay Foundation Specialists the outstanding amount of P1,024,600 plus interest for the completed construction work.

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    Obligations and Contracts

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    2. Federal Builders Inc vs Foundation Specialists

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    The Supreme Court denied Federal Builders Inc.'s petition and affirmed the Court of Appeals' decision with modification. The Court found that Foundation Specialists Inc. had completed 97% of the contracted work for the construction of a plaza, and any defects were due to Federal Builders' failure to deliver necessary cement on time. While Federal Builders claimed Foundation Specialists' work was incomplete, records showed the lack of cement was the cause. Therefore, the Court ordered Federal Builders to pay Foundation Specialists the outstanding amount of P1,024,600 plus interest for the completed construction work.

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    © All Rights Reserved
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    123 views1 page

    Federal Builders Inc Vs Foundation Specialists

    Uploaded by

    Angelo Navarro
    The Supreme Court denied Federal Builders Inc.'s petition and affirmed the Court of Appeals' decision with modification. The Court found that Foundation Specialists Inc. had completed 97% of the contracted work for the construction of a plaza, and any defects were due to Federal Builders' failure to deliver necessary cement on time. While Federal Builders claimed Foundation Specialists' work was incomplete, records showed the lack of cement was the cause. Therefore, the Court ordered Federal Builders to pay Foundation Specialists the outstanding amount of P1,024,600 plus interest for the completed construction work.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 1

    Federal Builders Inc. vs Foundation Specialists Inc.

    G.R. No. 194507


    9/8/2014

    Facts:
     Federal (FBI) and Foundation (FSI) entered into an agreement wherein Foundation, as subcontatractor, built parts of
    a Trafalgar Plaza in Makati amounting to P7.4M. Federal was to pay 20% of the contract price as downpayment and
    the remaining balance, to be paid every 15 days and payable not later than 1 week from billinbg.
     FSI filed for sum of money complaint against FBI before RTC Makati seeking to collect P1,635,278.91, which
    represented billings 3 & 4 with interest and damages. FSI claims that FBI refused to pay said amount despite
    demands and its completion of 97% of the works.
     FBI countered that FSI only completed 87% and failed to finish its work and abandoning it. FBI maintains that due to
    FSI’s inadequacy, the project is now delayed.
     RTC ruled in favor of FSI and ordered FBI to pay FSI as FBI’s claim lacked factual basis.
    o Pay FSI P1.4M in said billings plus interest;
    o Pay P279k for the undelivered cement cost;
    o Pay 200k in lawyer fees; and
    o Cost of suit.
     CA affirmed the RTC. It held that FSI failed to prove how the cement cost was not supported by actual receipts. Both
    parties filed an MR but to no avail hence the case was elevated to the SC
     FSI argues that the CA should not have removed the P279k payment for the undelivered cement cost and since it
    was undisputed that FBI failed to deliver the said cement.
     FBI countered that the CA erred in awarding the P1.4M of said billings and the imposed interest. However, SC denied
    FSI’s petition as it was belatedly filed.

    Issue: Whether FBI was correct in not paying FSI’s alleged incomplete work - NO

    Rulings:
     Per records, FSI had indeed completed 97% of its contracted work as well any defects. These defects and the
    remaining 3% incomplete work was due to FBI’s negligence of failure to deliver the cement needed for the project.
     The cement was needed to construct a capping beam but records showed that though FSI had repeatedly requested
    FBI for said cement, it was not delivered hence the capping beam was not constructed due to the failure to deliver
    said cement by FBI. Though the design was revised, no proof was shown that such revision required less cement
    than what was previously agreed upon.
     It can deduced that the defects FBI complained of, which were not only anticipated by the parties, having stipulated
    alternative plans to remedy the same, are also attributable to the very actions of FBI.
     Accordingly, considering that the alleged defects in FSI’s contracted works were not so much due to the fault or
    negligence of the FSI, but were satisfactorily proven to be caused by FBI’s own acts, FBI’s claim of ₱8,582,756.29
    representing the cost of the measures it undertook to rectify the alleged defects must necessarily fail.
     FBI admitted that it paid P6M based on its evaluation and it FSI did not impose any objection.
     WHEREFORE, premises considered, the instant petition is DENIED. The Decision and Resolution, dated July 15, 2010
    and November 23, 2010, respectively, of the Court of Appeals in CA-G.R. CV No. 70849 are hereby AFFIRMED with
    MODIFICATION. Federal Builders, Inc. is ORDERED to pay Foundation Specialists, Inc. the sum of Pl ,024,600.00
    representing billings 3 and 4, less the amount of ₱33,354.40, plus interest at six percent (6%) per annum reckoned
    from August 30, 1991 until full payment thereof.

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