FINANCIAL BUILDING CORPORATION vs. RUDLIN INTERNATIONAL CORPORATION, BLOOMFIELD EDUCATIONAL FOUNDATION, INC., RODOLFO J. LAGERA, MA. ERLINDA J. LAGERA AND JOSAPHAT R. BRAVANTE, G.R. No. 164186, October 4, 2010; with accompanying case -- RUDLIN INTERNATIONAL CORPORATION, BLOOMFIELD EDUCATIONAL FOUNDATION, INC., RODOLFO J. LAGERA, MA. ERLINDA J. LAGERA AND JOSAPHAT R. BRAVANTE vs. FINANCIAL BUILDING CORPORATION, G.R. No. 164347, October 4, 2010.
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Considering that FBC had not completed the corrective/repair works in accordance with the Contract Documents and as approved or certified in writing by the Architect as to its completion, its demand for the payment of the final balance was premature. Under the Letter-Agreement dated June 5, 1986, final payment was subject to reconciliation of their accounts regarding the upgrading and downgrading done on the project. Obviously, this cannot be complied with unless FBC as the defaulting party completes the repair/corrective works for only then can the actual cost of additives and deductives be determined. In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. When the substandard waterproofing caused extensive damage to the school building, it was incumbent upon FBC to institute at its own expense the proper repairs in accordance with the guaranty-warranty stated in the Construction Agreement. Thus, Rudlin cannot be said to have incurred delay in the reconciliation of accounts, as a precondition for final payment; instead, it is FBC who was guilty of delay by its stubborn refusal to replace or re-execute the defective waterproofing of the subject school building.
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