CASE DIGEST: Pascua vs. G & G

G.R. No. 196383 : October 15, 2012

ROBERT PASCUA, doing business under the name and style TRI-WEB CONSTRUCTION, Petitioner, v. G & G REALTY CORPORATION, Respondent.



Robert Pascua (Pascua), doing business under the name and style Tri-Web Construction, and G & G Realty Corporation (G & G) entered into a contract for the construction of a four-storey commercial building and two-storey kitchen with dining hall. Under the contract, Pascua would provide all the materials and labor. In turn, G & G would pay the amount of Eleven Million One Hundred Thousand Pesos (P11,100,000.00).

During the course of the construction project, G & G required Pascua to undertake several additional works and change order works which were not covered by their original contract. Pascua complied accordingly. Subsequently, Pascua was able to finish the construction of the four-storey building and two-storey kitchen with dining hall, albeit behind the scheduled turnover date. Pascua demanded for the payment of the contract price but G & G refused to pay.

Thus, Pascua filed a Complaint for Sum of Money with Damages before the RTC. The RTC ruled in favor of Pascua. On appeal, the CA overturned the RTC.

ISSUE: Whether or not Pascua is entitled to the payment of the outstanding balance of the contract price?

HELD: The Court finds the petition meritorious.

CIVIL LAW: reciprocal obligation; unjust enrichment

Apropos, Dieparine, Jr. v. Court of Appeals states that "a construction contract necessarily involves reciprocal obligations, as it imposes upon the contractor the obligation to build the structure subject of the contract, and upon the owner the obligation to pay for the project upon its completion."

Pursuant to the aforementioned contractual obligations, petitioner completed the construction of the four-storey commercial building and two-storey kitchen with dining hall. Thus, this Court finds no legal basis for respondent to not comply with its obligation to pay the balance of the contract price due the petitioner.

What's more, in Heirs of Ramon Gaite v. The Plaza, Inc., this Court held that "under the principle of quantum meruit, a contractor is allowed to recover the reasonable value of the thing or service rendered in order to avoid unjust enrichment. Quantum meruitmeans that in an action for work and labor, payment shall be made in such amount as the plaintiff reasonably deserves. To deny payment for a building almost completed and already occupied would be to permit unjust enrichment at the expense of the contractor."