- Petitioner
- Southstar Construction
- Respondent
- Philippine Estates Corporation
- Citation
- G.R. No. 218966
- Court
- Supreme Court
- Division
- Third Division
- Ponente
- Gaerlan, J.
- Decided
- August 1, 2022
Summary
This civil case involved disputes over three construction agreements between Southstar Construction and PHES for projects in Jaro Estates, Iloilo City, totaling P7,728,931.84. Southstar completed all projects in October 2005 but PHES refused to pay balances of P2,452,672.17, claiming incomplete work and delay. The Supreme Court partially granted Southstar's petition, ruling that PHES must pay contract balances since Article 4.3 only permits retention of 10% retention money, not refusal of full payment. PHES' certificate of completion for Eunice Units constituted acceptance and waiver of defects. However, Southstar was liable for liquidated damages totaling P444,904.00 for delays in two projects, calculated at 0.1% per day as contractually stipulated. The Court dismissed PHES' counterclaim for an unrelated Cebu project as a permissive counterclaim requiring separate docket fees. The decision clarifies the distinction between retention rights and payment obligations in construction contracts, emphasizing that contractual acceptance waives subsequent objections and that express contractual delay provisions create automatic liability without need for demand.