H.S. Pow Construction v. Shaughnessy Development Corporation

Summary

This commercial dispute arose from a P10.5 million construction contract between HSPCDC and SDC for subdivision infrastructure in Taytay, Rizal. HSPCDC completed the road network but failed to finish well-drilling and elevated water tank, claiming SDC's failure to secure permits and provide adequate power. SDC counterclaimed for delay penalties and completion costs. The RTC favored HSPCDC, awarding payment for completed work and variation orders while finding no delay. The CA reversed, imposing mutual obligations with offsetting and delay penalties. The Supreme Court partially granted HSPCDC's petition, affirming liability for abandoned work under Civil Code Article 1167 but deleting delay penalties, finding that SDC's continuous plan changes and additional work instructions contributed to project delays. The decision emphasizes comprehensive evidence evaluation and contractor protection when owners contribute to delays.