SBTC vs CA

Security and Trust Company and R. Manhit vs CA and Ferrer
G.R. No. 117009. 11 Oct 1995.
Petition to review and reverse the decision of the CA
Padilla, J.:

Facts: Ferrer was contracted by the SBTC to construct a bldg in Davao. The contract provided that it be finished within 200 working days, it was finished upon stipulated time but additional expenses were incurred amounting to 300k on top of the original cost, these expenses were made known to SBTC and timely demands for the payment of the increased cost were done by Ferrer to SBTC, the latter only recommended that the verified cost is 200k. SBTC contend that in the contract, should there be any increase in the expenses, the “owner shall equitably make the appropriate adjustment on mutual agreement of both parties.” Ferrer filed for damages and the trial court ruled in his favor, the defendants were ordered to pay. On appeal, CA affirmed the tc’s decision.

Issue: WON SBTC is liable for damages and payment of the additional expenses.

Held: CA decision AFFIRMED.

Ratio: Art. 22 states that, “Every person who through an act or performance by another or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him.”
It is not denied that private respondent incurred additional expenses in constructing petitioner bank’s bldg due to a drastic and unexpected in construction cost. Hence, to allow petitioner bank to acquire the constructed bldg at a price far below its actual cost would undoubtedly constitute unjust enrichment for the bank to the prejudice of Ferrer, such cannot be allowed by law.

*Ash