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Ffcruz Vs Hrconstruction

FFCCI entered into a subcontract with HRCC for construction work on a viaduct project. HRCC submitted monthly progress billings to FFCCI for payment, but FFCCI refused to pay, arguing that HRCC failed to comply with the requirement for a joint measurement of completed work. The Supreme Court ruled that FFCCI had waived its right to demand joint measurements, as it had paid previous progress bills from HRCC without requiring them. By failing to enforce this requirement before, FFCCI could no longer use it as an excuse to withhold payment and was barred from contesting HRCC's valuations of completed work.

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266 views1 page

Ffcruz Vs Hrconstruction

FFCCI entered into a subcontract with HRCC for construction work on a viaduct project. HRCC submitted monthly progress billings to FFCCI for payment, but FFCCI refused to pay, arguing that HRCC failed to comply with the requirement for a joint measurement of completed work. The Supreme Court ruled that FFCCI had waived its right to demand joint measurements, as it had paid previous progress bills from HRCC without requiring them. By failing to enforce this requirement before, FFCCI could no longer use it as an excuse to withhold payment and was barred from contesting HRCC's valuations of completed work.

Uploaded by

Paula Gaspar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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F.F. CRUZ & CO., INC. vs.

HR CONSTRUCTION CORPORATION
G.R. No. 187521 March 14, 2012

Facts:

Sometime in 2004, FFCCI entered into a contract with the Department of Public Works and
Highways (DPWH) for the construction of the Magsaysay Viaduct, known as the Lower Agusan
Development Project. On August 9, 2004, FFCCI, in turn, entered into a Subcontract Agreement with
HR Construction Corporation (HRCC) for the supply of materials, labor, equipment, tools and
supervision for the construction of a portion of the said project called the East Bank Levee and Cut-
Off Channel in accordance with the specifications of the main contract. Pursuant to the Subcontract
Agreement, HRCC would submit to FFCCI a monthly progress billing which the latter would then
pay, subject to stipulated deductions, within 30 days from receipt thereof.

The parties agreed that the requests of HRCC for payment should include progress
accomplishment of its completed works as approved by FFCCI. Additionally, they agreed to conduct
a joint measurement of the completed works of HRCC together with the representative of DPWH
and consultants to arrive at a common quantity. Thereafter, HRCC commenced the construction of
the works pursuant to the Subcontract Agreement. However, before the project was completed,
HRCC pursuant to the arbitration clause in the subcontract agreement filed with the Construction
Industry Arbitration Commission a complaint praying that FFCI pay the overdue application plus
legal interests they have not paid. FFCCI maintained that HRCC failed to comply with the condition
stated under the Subcontract Agreement for the payment of the latters progress billings, i.e. joint
measurement of the completed works, and, hence, it was justified in not paying the amount stated
in HRCCs progress billings.

Issue:
Whether or not FFCCI is already barred from contesting HRCCs valuation of the completed
works having waived its right to demand the joint measurement requirement.

Ruling:
The Supreme Court held that FFCCI had waived its right to demand for a joint measurement
of HRCCs completed works under the Subcontract Agreement. Further, on account of its failure to
demand the joint measurement of HRCCs completed works, had effectively waived its right to ask
for the conduct of the same as a condition sine qua non to HRCCs submission of its monthly
progress billings. Basically, the instant issue calls for a determination as to which of the parties
respective valuation of accomplished works should be given credence. FFCCI claims that its
valuation should be upheld since the same was the result of a measurement of the completed works
conducted by it and the DPWH.

On the other hand, HRCC maintains that its valuation should be upheld on account of
FFCCIs failure to observe the joint measurement requirement in ascertaining the extent of its
completed works. FFCCI admits that in all three instances where it paid HRCC for its progress
billings, it never required compliance with the aforequoted contractual provision of a prior joint
quantification. Such repeated omission may reasonably be construed as a waiver by FFCCI of its
contractual right to require compliance of said condition and it is now too late in the day to so
impose it. Article 6 of the Civil Code expressly provides that rights may be waived unless the
waiver is contrary to law, public order, public policy, morals or good customs. The tribunal cannot
see any such violation in this case.

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