Jose v. Fidelity

VILLA-REAL, J.:

This appeal is taken by the defendant, the fidelity and Surety Company of the Philippine Islands from the judgment of the Court of First Instance of Manila ordering it to pay the plaintiff Hospicio de San Jose, represented by the Roman Catholic Archbishop of Manila, the amount of P12,800, with legal interest from December 23, 1927, the date on which the complaint was filed, with the costs. In support of the appeal, the appellant assigns the following alleged errors as committed by the court below in its judgment, to wit: 1. The lower court erred in awarding judgment upon the stipulated facts, in favor of plaintiff and against defendant.

2. The lower court erred in refusing to absolve defendant from plaintiff's complaint in accordance with the prayer of defendant's answer. 3.

The lower court erred in holding and concluding as a matter of law, upon the stipulated facts that the defendant was not relieved from its guaranty. 4. The lower court erred in concluding that plaintiff's action had not prescribed.

5. The lower court erred in denying defendant's motion for a new trial. When the case came up for trial the parties thereto submitted it to the trial court for judgment upon the following agreed statement of facts: AGREED STATEMENT OF FACTS Come now the parties, plaintiff and defendant, in the above entitled case, through their respective counsel, and to this Honorable Court respectfully submit the following facts to which they have agreed: I. That the plaintiff is a Catholic beneficent institution, duly organized and existing in the City of Manila, Philippine Islands and represented by the Roman Catholic Archbishop of Manila, a corporation sole duly organized and existing under and by virtue of the laws of the Philippine Islands: and the defendant is a corporation also organized and existing under and by authority of the laws of the Philippine Islands, with its principal place of business situated in the City of Manila, Philippine Islands, and engaged in surety business therein.

II. That one by the name of Romulo Machetti, who had been a building contractor in the City of Manila, had agreed with the plaintiff by virtue of a written contract executed on July 17, 1916, to build for the latter a concrete building composed of several "accesorias" to be designated by Nos. 97 and 121 on Calle Rosario, City of Manila, which building was to be construed in accordance with the plans and specifications set forth in the contract above mentioned, and under the technical supervision of the deceased, Don Arcadio Arellano and Arellano Brothers, architects.

The contract in question is attached hereto and made a part hereof as Exhibit A. III. That it was stipulated in Exhibit A the following: III. Mr. Romulo Machetti guarantees the exact and faithful fulfillment of the obligations contracted by him in the aforementioned "specifications"

with the security of the "Fidelity and Surety Co. of the Philippine Islands," up to the amount of twelve thousand eight hundred Philippine pesos (P12,800); it being understood that if Mr. Romulo Machetti well and faithfully fulfills the obligations contracted by him in the specifications and plans attached hereto, the guarantees herein given shall become null and void; otherwise, they shall continue in full force and effect. IV.

That the defendant guaranteed in manner following the faithful compliance by Romulo Machetti with the terms, conditions and stipulations set forth in Exhibit A.

MANILA, July 15, 1916 For value received we hereby guarantee compliance with the terms and conditions as outlined in the above contract. FIDELITY & SURETY CO. OF THE PHILIPPINE ISLANDS (Sgd.) OTTO VORSTER Vice-President Attest: (Sgd.) WM.

J. O'DONOVAN Secretary-Treasurer Said guaranty which appears at the foot of Exhibit A is referred to and made a part hereof as Exhibit A-1. V. That thereafter, and on or about the 19th day of October, 1916, plaintiff and Romulo Machetti entered into an additional contract in writing, which said contract is hereto attached and made a part hereof as Exhibit B, by virtue of which the said Machetti undertook and agreed to do and perform work and construction additional to that specified in Exhibit A, which consisted of building in connection with said "accesorias" certain "bodegas"

at the rear part of the "accesorias" to be erected or constructed under the contract Exhibit A, the same to be under the same supervision of the deceased Don Arcadio Arellano and Arellano Brothers, the architects aforementioned; the defendant above named did not become a party to said additional agreement Exhibit B as guarantor or otherwise. VI.

That under the provisions of said contract Exhibit A, said Romulo Machetti had undertaken and agreed to complete the construction of said "accesorias" and deliver the same to plaintiff within the period of 150 working days, to be computed from the date of the said contract, that is from July 17, 1916, and under the supervisions of said agreement Exhibit B had undertaken to complete the said "bodega" and deliver the same to plaintiff within one month after the date stipulated by the parties for the completion and delivery of the "accesorias"

as provided in Exhibit A. VII. That subsequent to the execution of said Exhibit B and during the course of the construction of said "accesorias" and "bodega"

by said Machetti, he, the said Machetti, demanded of plaintiff an extension of 25 days within which to complete and deliver the said "accesorias" and "bodegas" in accordance with the terms and provisions of said contracts, on account of delay encountered in transporting and delivering sand and gravel to the construction premises, by reason of repair work being conducted by the Manila Electric Company on Calle Rosario in front of the "accesoria"

and "bodega" premises; that although plaintiff considered that said Machetti could not be delayed thereby for more than ten or twelve days, nevertheless acceded to the demand of said Machetti and agreed to said extension, in so far as the same pertained to the "accesorias" under the terms, conditions and provisions of said Exhibit A; that said "accesorias"

were not completed in accordance with the plans and specifications of Exhibit A or delivered to plaintiff so completed on the 16th day of February 1917, in accordance with the provisions of said contract Exhibit A as extended; that the "bodegas" were not completed in accordance with the plans and specifications of said contract Exhibit B or delivered to plaintiff on the 16th day of March, 1917, in accordance with the provisions of said Exhibit B; that in truth and in fact, as we discovered by plaintiff during the month of April, 1917, when the City Engineer went to inspect the work, prior to the issuance of his final certificate, said "accesorias" and said "bodegas"

were defective and not in accordance with the plans and specifications of said Exhibit A and B, and said Romulo Machetti in neglecting to complete and deliver said accesorias' and "bodegas" in accordance with the said contracts Exhibit A as extended and Exhibit B, acted in bad faith; that the construction works were so faulty that the City Engineer thereafter ordered the destruction of those parts thereon in contravention of the plans and specifications, and ordered the reconstruction of same in accordance with said plans and specifications. VIII.

That said extension of 25 days' time granted by plaintiff to said Romulo Machetti to perform the conditions and obligations of Exhibit A on his part to be done and performed was without the consent of defendant. IX. That during the month of April, 1917, the plaintiff herein secured the services of one William Odom, a contractor, to complete the reconstruction of said "accesorias"

and "bodegas" in accordance with the plans and specifications of said contracts; that said "accesorias" were finally completed and delivered unto plaintiff by said contractor, William Odom, 475 days from February 16, 1917, the last day as stipulated in Exhibit A as extended, that is to say, on the 8th day of June, 1918; that the "bodegas"

were completed and delivered by said William Odom unto plaintiff 475 days from March 16, 1917, the last day stipulated in Exhibit B, that is to say, on July 8th, 1918. X. That from time to time during the course of construction under the provisions of said contract Exhibit A as extended, plaintiff made payments to said Romulo Machetti thereunder, the prior to the expiration of the period for the completion of said contract exhibit A as extended, plaintiff, without the knowledge of defendant, paid unto said Romulo Machetti the full construction price; that from time to time during the construction under the provisions of Exhibit B, plaintiff made various payments unto Romulo Machetti, and on the 16th of March 1917, had completed all payments to be made by said plaintiff, except the sum of P4,976.08; That all the said payments were made by plaintiff under the impression and belief that the construction works were done in accordance with the plans and specifications set forth in Exhibit A and B on account of the certificates issued by the supervising architects.

XI. That on February 27, 1918, Romulo Machetti was declared insolvent by this Honorable Court in the matter of the Insolvency of Romulo Machetti, Case No. 15867. XII.

That on November 18, 1922, the plaintiff filed a claim in the above mentioned Insolvency case No. 15867, to recover the following sums, to wit: 1. For damages suffered by the plaintiff due to expenses incurred in correcting the faulty work done by Romulo Machetti on the "accesorias" described in contract Exhibit A, the correction having been done by Mr. Odom another contractor, and which correction was necessary on account of the negligence, malice and bad faith of said Romulo Machetti whose workmanship was not of the standard required .

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P52,669.98 For damages suffered by the plaintiff due to expenses incurred in correcting the faulty work done by Romulo Machetti on the "bodegas" described in Exhibit B, the correction having been done by Mr. Odom, another contractor, and which correction was necessary on account of the negligence, malice and bad faith of said Romulo Machetti whose workmanship was not of the standard required . .

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4,672.39 Total . . .

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