SECOND DIVISION

[G.R. No. 183872. November 17, 2014.]

OWEN PROSPER A. MACKAY , petitioner, vs . SPOUSES DANA

CASWELL and CERELINA CASWELL , respondents.

DECISION

DEL CASTILLO , J : p

This Petition for Review on Certiorari 1 assails the April 30, 2008 Decision 2 of the
Court of Appeals (CA) in CA-G.R. SP No. 97146 which granted the Petition for Review 3
led therewith, reversed and set aside the October 31, 2006 Decision 4 of the Regional
Trial Court (RTC), Branch 70, Iba, Zambales in Civil Case No. RTC-2426-I, and reinstated the
June 29, 2006 Decision 5 of the Municipal Trial Court (MTC), San Narciso, Zambales in Civil
Case No. 538. The MTC Decision dismissed petitioner Owen Prosper A. Mackay's (Owen)
claims against respondents spouses Dana Caswell and Cerelina Caswell (the Caswells)
and ordered him to pay the latter P46,205.00 representing the expenses they incurred for
the recti cation of the defective work he did for them. The Petition also assails the July 24,
2008 Resolution 6 of the CA denying Owen's Motion for Reconsideration 7 thereto.
Factual Antecedents
In their search for someone who could provide electrical installation service in their
newly built home in San Narciso, Zambales, the Caswells asked the sole distributor of
electricity in the area, Zambales II Electric Cooperative (Zameco II), thru its sub-o ce
manager, Engr. Victor Pulangco (Engr. Pulangco), how much its service for the installation
would be. Engr. Pulangco quoted an estimate of P456,000.00.
However, the Caswells hired Owen who offered to do the job for only P250,000.00.
With the help of Cesar Badua (Badua) and Albert Galeng, Owen claimed that the installation
was completed and ready for power service connection as of August 1998. By then, the
Caswells had paid him P227,000.00.
At Cerelina Caswell's (Cerelina) request, Zameco II inspected the installation work
and tested the distribution transformers. 8 The inspection showed the following defects
as specified in Engr. Pulangco's letter dated August 11, 1998: 9
I. For A-5 Construction

a. No guying

b. Improper use of deadend materials for neutral line

c. Lack of armor tape

d. Lack of clamp loop deadend materials

e. No locknuts on all bolts. EDATSI

II. For A-2 construction

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 a. Improper use of materials for pole top pin

b. Lack of pole top pin

c. No guying

d. Improper use of materials for neutral line

e. Wrong phasing of pole top pin

f. Lack of armor rod (single & double support)

III. For Grounding:

a. [Substandard] grounding wire

b. Wrong installation of pole grounding wire

c. Lack of grounding rods

V. Tapping Point:

Lack of use cut-out with lightning arrester combination at the tapping point.

VI. For Transformer Installation:

Wrong distance of the transformer from the neutral line. 10

Because of the de ciencies and other incomplete requirements, Zameco II refused

to provide energization to the Caswell home. The Caswells thus looked for Owen but he
could not be found. Hence, they were constrained to ask Zameco II to correct all the
problems it found. After the single phase distribution system was completed in
accordance with the standard specifications of Zameco II in January 1999, 11 only then did
the Caswells finally have electricity.
On September 4, 1998, the Caswells executed a Joint A davit 12 to charge Owen
and his group of swindling them of P227,000.00. The Caswells alleged that Owen and his
group misrepresented themselves to be people from the National Power Corporation
(NAPOCOR). By reason of the misrepresentation, the Caswells suffered damage as the
electrical installation made were replete with de ciencies such that no electricity can
properly ow to their house. This led to the ling of an Estafa case under Article 315
paragraph 2 (a) of the Revised Penal Code 13 against Owen, docketed as Criminal Case No.
RTC-2533-I. 14 However, on ground of reasonable doubt, Owen was acquitted on May 15,
2003. 15
Still unpaid for the remaining P23,000.00 for his installation work, Owen in turn led
a Complaint 16 for Collection of Sum of Money with Damages against the Caswells before
the MTC, docketed as Civil Case No. 538. TcHCIS

Owen alleged that out of the P250,000.00 contract price for the installation of an
electrical line, the Caswells have only paid him P227,000.00. He thus wanted to recover
from the Caswells the remaining balance of P23,000.00, as well as damages on account of
sleepless nights, serious anxiety and social humiliation he suffered due to the Caswells'
malicious filing of estafa case against him.
The Caswells, on the other hand, maintained that Owen is not entitled to any money.
They pointed out that Owen failed to nish the job and walked out of the contract. Hence,
they are the ones entitled to reimbursement of expenses incurred to correct Owen's
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 defective work. As proof of their expenses, the Caswells submitted as evidence a) Engr.
Pulangco's handwritten receipt of P15,400.00 as partial payment for the materials needed
to correct the de ciencies in Owen's installation work; 17 b) an undated Sales Invoice No.
2029 issued by Peter A. Eduria Enterprises itemizing nine electrical materials, Dana
Caswell (Dana) bought, their quantities, and the total price of P53,805.00.00 * 18 and; c) a
list of all the materials obtained for Zameco's corrective work with the corresponding unit
prices, labor cost and the total price charged. 19
Owen and Badua testi ed that they recti ed all the discrepancies that Zameco II
found. After the corrections, Owen informed Engr. Pulangco that the Caswell home was
ready for electrical connection. He did not know what Engr. Pulangco did next. Owen
likewise asserted that he even reminded Cerelina to submit to Zameco II all the
documentary requirements for power connection. 20
Ruling of the Municipal Trial Court
Finding the contract entered into by the parties to be a contract for a piece of work,
the MTC relied upon Article 1715 of the Civil Code, viz.:
The contractor shall execute the work in such a manner that it has the
qualities agreed upon and has no defects which destroy or lessen its value or
tness for its ordinary or stipulated use. Should the work be not of such quality,
the employer may require that the contractor remove the defect or execute another
work. If the contractor fails or refuses to comply with this obligation, the employer
may have the defect removed or another work executed, at the contractor's cost.

The MTC held that since it was proven that the work of Owen suffers from
de ciencies, the Caswells, pursuant to the above-quoted provision, have the right to
require him to remove the defect or execute another work. It did not give credence to
Owen's claim that he corrected the de ciencies for lack of evidence to substantiate the
same. The MTC likewise held that the Caswells had no chance to demand from Owen the
removal of the defect or the execution of another work as he was then nowhere to be
found. On the other hand, the Caswells' evidence clearly showed that they caused the
Zameco II people to rectify the defects for which they spent P69,205.00. DCaEAS

By virtue of Article 1167 21 of the Civil Code, the MTC ruled that the said P69,205.00
should be borne by Owen. From the P69,205.00, the said court then deducted the
P23,000.00 Owen was seeking to collect from the Caswells. The dispositive portion of the
MTC's June 29, 2006 Decision 22 reads:
WHEREFORE, viewed from all the foregoing, judgment is hereby rendered in
favor of the [Caswells] and against [Owen] as follows:

1. Dismissing [Owen's] claims for lack of merit, and

2. Ordering [Owen] to pay the [Caswells] the amount of P46,205.00
representing the rectification cost.
SO ORDERED. 23

Owen appealed to the RTC.

Ruling of the Regional Trial Court
In a Decision 24 dated October 31, 2006, the RTC reversed and set aside the MTC
Decision. The RTC opined that the Caswells should have rst led a judicial action for
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 speci c performance where there could have been an exhaustive determination of the
quality and acceptability of Owen's installation work. By immediately resorting to the
service of Zameco II, the Caswells never afforded Owen the opportunity to correct the
de ciencies in accordance with Article 1715 of the Civil Code. It noted Cerelina's
testimony during the trial before the MTC where she was asked if she confronted Owen
about the un nished work. She answered that Owen did not come to her so she went to
Zameco II when she could no longer wait for electricity. 25
Furthermore, the RTC was convinced that Owen kept up his end of the bargain as
shown by Engr. Pulangco's testimony on cross-examination that even without replacing
the fuse cut-out connection, electricity will still ow smoothly and will function in the
Caswell home. 26
Opining that Owen must be given what is actually due him, the RTC disposed of the
case as follows:
WHEREFORE, the decision of the Municipal Trial Court of San Narciso is
reversed and set aside and judgment is hereby rendered as follows:

1. Ordering the defendants to pay unto the plaintiff the amount of Twenty
Three Thousand Pesos (P23,000.00) representing the balance of the price or
consideration for his services in the installation of electrical lines in the
defendants' home, with legal interest at the rate of six (6%) [per annum] from the
time of the filing of the complaint until it is fully paid;

2. Ordering the defendants to pay to the plaintiff moral damages in the

amount of TWENTY FIVE THOUSAND PESOS (P25,000.00) for their willful non-
compliance with their contractual obligation to the plaintiff, and exemplary
damages in the amount of TWENTY THOUSAND PESOS (P20,000.00) by way of
example or correction for the public good;

3. Ordering the defendants[,] spouses DANA and CERELINA CASWELL[,] to

pay attorney's fees to the plaintiff in the amount of THIRTY THOUSAND PESOS
(P30,000.00), the latter having been haled to court to enforce his contractual
rights;

[4.] Ordering the defendants to pay the costs of this suit.

SO ORDERED. 27 HIETAc

Refusing to accept the RTC judgment and heavily relying on the MTC Decision, the
Caswells elevated the case to the CA by way of a Petition for Review. 28
Ruling of the Court of Appeals
In its Decision 29 of April 30, 2008, the CA reinstated the MTC Decision. It reasoned:
The RTC opined that [the Caswells] should have given the contractor the
chance to rectify the aw in his work. To Our mind, however, the effort to
communicate with [Owen] effectively served as [the Caswells'] request for the
former to rectify the aws in the contracted work. In fact, [the Caswells'] act of
demanding that [Owen] secure the permit and to subject the transformer to testing
can already be construed as a substantial compliance with Article 1715. It must
be emphasized that it was [Owen's] refusal to secure the necessary permits and to
comply with the requirements of Zameco [II] as well as his refusal to
communicate with [the Caswells] that impelled the latter to le a case for estafa
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 against him. Had he been willing to make good his obligation, then it would not
have been necessary for [the Caswells] to le the said criminal case. Instead of
complying with his end of the bargain, [Owen] opted to le a case for collection of
sum of money with damages. Thus, any effort to require [Owen] either to rectify
his awed work or to remove the same would have been futile since [Owen's] act
of demanding payment through the said complaint showed his belief that his
work in the house was done.

Clearly, the RTC erred in stating that [the Caswells'] failure to le an action
for speci c performance led to the presumption that [Owen] performed his
obligations in accordance with their agreement. Said presumption could not have
prevailed in view of the nature of the contracted work, the ultimate goal of which
was to have electricity owing into [the Caswell] house. Thus, the thing speaks for
itself. Res ipsa loquitur. This, the RTC failed to consider. Therefore, this Court
finds the decision of the MTC more in accord with law and jurisprudence. 30

His Motion for Reconsideration 31 having been denied by the CA, 32 Owen argues in
this Petition for Review on Certiorari that: 1) he has done the installation job and that it was
not his duty but that of the Caswells to secure the necessary permits from Zameco II; 2)
his acquittal in the criminal case should have been considered; 3) there is no basis for the
award of the recti cation costs as the sales receipt for the alleged materials used is
inadmissible and; 4) the Caswells never demanded that he remove the defects or execute
another work in accordance with Article 1715 of the Civil Code. ACcDEa

Our Ruling
We deny the Petition.
Owen failed to execute his work in such
a manner that it has no defects which
destroy or lessen its value or fitness for
its ordinary or stipulated use.
Owen insists that as far as he is concerned, he had done what was required of him.
i.e., the installation of electrical materials in the Caswell home. Anent the permits, he avers
that securing the same is not part of his work but is the responsibility of the Caswells.
Considering all the undisputed facts, the Court, however, nds that the Caswells
were not only after securing permits. They suffered other major problems as shown by
their narration in their Joint Affidavit, viz.:
5. That we think they were done in three days, that same week. The contact
man, Owen Mackay, had told us that he would take care of all permits. He asked
us to get a paper done for the permission on one piece of land. No permits were
shown to us. No ZAMECO authorization [was] ever shown to us. He went to
ZAMECO, to tell them it was ready [for connection]. ZAMECO did not connect
because: (1) no permits [were] requested or [were] given by ZAMECO; (2)
transformer allegedly brand new [and] had to run through testing laboratory.
Owen['s] group [neither] did the testing nor caused a testing; (3) complete
inspection of installation was [yet] to be done . . .; (4) no installation layout was
provided or presented to ZAMECO; (5) nobody [from Owen's group was] around
for 4-5 days to . . . talk about our problems. Owen called, sent word to [us] and we
have gone down (3) occasions at night to try to nd him. The three did [a]
vanishing act. Finally, [they came] to take the transformer for testing. [The] one
day testing told us by Pulangco turned into 1 1/2 weeks . . . . I had to go pick it up
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 myself at test complex. Brought the transformer home from Castillejos, August
[10,] 1998 with the test results. No response from the people who called
themselves NAPOCOR. After [chasing after] Owen Mackay . . . and [after] empty
promises we were referred to Atty. Pacis, [and] the rest is still unsettled; 33

These circumstances, together with the de ciencies enumerated in Engr. Pulangco's

August 10, 1998 letter, su ciently explain the delay in the energization of the Caswell
home. Engr. Pulangco's testimony that electricity will still work without replacing the fuse
cut-out connection is not enough to negate the fact that Owen's overall work is not
satisfactory.
Moreover, Owen, in contending that his acquittal in the estafa case should have been
a factor for a favorable decision in this civil case, relied on a remark by the RTC that
referred to an opinion mentioned in the judgment in the estafa case, i.e., that the delay in
supplying power to the Caswell home could possibly be due to the resentment harbored
by certain employees of Zameco II as they were not chosen to do the work. 34 A perusal,
however, of the judgment in Criminal Case No. RTC-2533-I 35 would show that this
statement is only a mere obiter. The RTC cannot hinge on this opinion as this is mere
conjecture. Notably, the Zameco II people were not even parties or witnesses in the estafa
case. SDEHCc

Suffice it to say that Owen's job was not only to finish the electrical installation work.
It was likewise his obligation to do quality work and to provide quality materials to ensure
that electricity would ow in the Caswell home. For the Caswells to avail of this utility, it is
de nitely expected that the electrical materials used should meet the technical
requirements for a service entrance as imposed by the only distributor of the electricity in
the area, Zameco II, so that the latter can supply residential electric service e ciently and
safely to the Caswells. However, as shown above, Owen failed to execute his work in such
a manner that it has no defects which destroy or lessen its value or tness for its ordinary
or stipulated use.
The CA correctly ruled that Caswells'
effort to communicate with Owen
effectively served as a demand to rectify
the latter's work.
Under Article 1715 of the Civil Code, if the work of a contractor has defects which
destroy or lessen its value or tness for its ordinary or stipulated use, he may be required
to remove the defect or execute another work. If he fails to do so, he shall be liable for the
expenses by the employer for the correction of the work. The demand required of the
employer under the subject provision need not be in a particular form. In the case at bar,
we agree with the CA that Owen was given the opportunity to rectify his work. Subsequent
to Zameco II's disapproval to supply the Caswells electricity for several reasons, the Court
gives credence to the latter's claim that they looked for Owen to demand a recti cation of
the work, but Owen and his group were nowhere to be found. Had Owen really been readily
available to the Caswells to correct any de ciency in the work, the latter would not have
entertained the thought that they were deceived and would not have been constrained to
undergo the rigors of ling a criminal complaint and testifying therein. Without doubt, the
Caswells exercised due diligence when they demanded from Owen the proper recti cation
of his work. As correctly held by the CA, the Caswells substantially complied with the
requirement of Article 1715 of the Civil Code, viz.:
To Our mind, however, the effort to communicate with [Owen] effectively served
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 as [the Caswells'] request for the former to rectify the aws in the contracted
work. In fact, [the Caswells'] act of demanding that [Owen] secure the permit and
to subject the transformer to testing can already be construed as a substantial
compliance with Article 1715. It must be emphasized that it was [Owen's]
refusal to secure the necessary permits and to comply with the requirements of
Zameco [II] as well as his refusal to communicate with [the Caswells] that
impelled the latter to le a case for estafa against him. Had he been willing to
make good his obligation, then it would not have been necessary for [the
Caswells] to le the said criminal case. Instead of complying with his end of the
bargain, [Owen] opted to le a case for collection of sum of money with
damages. Thus, any effort to require [Owen] either to rectify his awed work or
to remove the same would have been futile since [Owen's] act of demanding
payment through the said complaint showed his belief that his work in the
house was done. 36

Furthermore, to require the Caswells to le an action for speci c performance, as

opined by the RTC, not only deprives them of hiring someone else to rectify the work, but
also defeats the very purpose of the contracted work, i.e., to immediately have electricity in
their home. In this situation, time is of the essence. EcATDH

For Owen's failure to provide quality

work, he is to reimburse the rectification
costs the Caswells had shouldered as the
latter's actual damages; the unpaid
compensation Owen is claiming shall be
set-off from the Caswells' monetary
claims supported by receipts.
The Court recognizes that in view of the substandard work done, the Caswells
necessarily incurred expenses by purchasing materials to nally get a supply of electricity
in their home.
One is entitled to an adequate compensation only for such pecuniary loss suffered
by him as he has duly proved. 37 "To justify an award of actual damages, there must be
competent proof of the actual amount of loss, credence can be given only to claims which
are duly supported by receipts." 38 The claimant must prove the actual amount of loss with
a reasonable degree of certainty premised upon competent proof and on the best
evidence obtainable. 39 In the case at bar, we give credence to the documents relied upon
by the CA and the MTC in arriving at the recti cation cost, i.e., a) Engr. Pulangco's
handwritten receipt of P15,400.00, to which he had testi ed before the court that he had
indeed received such amount and b) the Sales Invoice No. 2029 issued by Peter A. Eduria
Enterprises reflecting the total cost of P53,805.00.00. *
Notably, Owen assails the admissibility of the Sales Invoice, contending that said
document is insu cient to be a basis for computation of damages as the respective unit
price for each item enumerated therein are lacking. Furthermore, he attempts to highlight
that Peter A. Eduria Enterprises is a non-existing business establishment by submitting the
negative certi cation of a business name issued by the Department of Trade and Industry,
40 the certi cation of no record issued by Business Permit and License O ce of
Valenzuela City, 41 and the certi cation of non-registration of corporation/partnership by
the Securities and Exchange Commission. 42
The failure to indicate the unit price of each item in the sales invoice does not defeat
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 the claim of the Caswells for reimbursement. In most cases in the ordinary course of
business, sellers issue handwritten receipts that are perfunctorily lled out without
completely stating all the details of the purchase. This ' aw' should not be taken against
the Caswells. Besides, if the unit price per item is an issue, a perusal of Dana's separate list
43 will show the unit prices of the items in the sales invoice.TSIDEa

With regard to the documentary evidence Owen adduced in his attempt to show the
alleged non-existence of Peter A. Eduria Enterprises, the negative certi cations presented
however only highlight the probable liability of the store with the government for non-
compliance with business registration. Regardless of whether the latter had registered
itself as a business entity with the proper authorities, the documents Owen relies upon fail
to overcome the point of the receipt: that a sale of electrical items for installation had
transpired between the Caswells and the seller. With the relevant facts established that
Zameco II rejected the quality of Owen's work and that recti cations were made by
installing the necessary materials to meet the electric distributor's speci cations, the said
invoice cannot be considered as bereft of evidentiary value.
It must be noted en passant that Cerelina herself admitted that the contract price
agreed upon was the lump sum of P250,000.00, and that she only paid Owen P227,000.00,
4 4 while the dispositive portion of the MTC Decision stated that Owen's claims are
dismissed, the lower court implies that the P23,000.00 unpaid compensation he sought to
recover from the Caswells shall not be given directly to him, offsetting the said amount
from the recti cation cost that the Caswells had prayed for. In effect, under the
circumstances, we deem this fair and just to measure the actual damages due the
Caswells by reducing the cost they shouldered to repair the defects with the unpaid
amount of the contract price due Owen. CIaHDc

WHEREFORE, the instant petition is DENIED. The April 30, 2008 Decision and July
24, 2008 Resolution of the Court of Appeals in CA-G.R. SP No. 97146, which reinstated the
June 29, 2006 Decision of the Municipal Trial Court, San Narciso, Zambales, in Civil Case
No. 538, are AFFIRMED in toto. No costs.
SO ORDERED.
Carpio, Brion, Mendoza and Leonen, JJ., concur.

Footnotes
1. Rollo, pp. 9-24.
2. CA rollo, pp. 74-82; penned by Associate Justice Magdangal M. De Leon and concurred in by
Associate Justices Josefina Guevara-Salonga and Normandie B. Pizarro.
3. Id. at 2-14.

4. Id. at 24-30; penned by Judge Clodualdo M. Monta.

5. Id. at 15-23; penned by Judge Renier P. Concepcion.
6. Id. at 95-96.
7. Id. at 85-90.
8. Rollo, p. 156.

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 9. Id. at 76.
10. Id.
11. Id. at 152.

12. Id. at 66-67.

13. Article 315. Swindling (estafa). — Any person who shall defraud another by any of the
means mentioned hereinbelow shall be punished by:
xxx xxx xxx
4th. By arresto mayor in its medium and maximum periods if such amount does not exceed
200 pesos, provided that in the four cases mentioned, the fraud be committed by any of
the following means:

xxx xxx xxx

2. By means of any of the following false pretenses or fraudulent acts executed prior to or
simultaneously with the commission of the fraud:
(a) By using fictitious name, or falsely pretending to possess power, influence, qualifications,
property, credit, agency, business or imaginary transactions, or by means of other similar
deceits.
xxx xxx xxx

14. Rollo, pp. 68-69.

15. Id. at 46-61.
16. CA rollo, pp. 55-57.
17. Rollo, p. 181.

18. Id. at 182.

19. Id. at 183.
20. Id. at 120-121.
21. Article 1167. If a person obliged to do something fails to do it, the same shall be executed at
his cost.
This same rule shall be observed if he does it in contravention of the tenor of the obligation.
Furthermore, it may be decreed that what has been poorly done be undone.
22. CA rollo, 15-23.
23. Id. at 23.
24. Id. at 24-30.

25. Id. at 27-28.

26. Id. at 29.
27. Id. at [unpaginated]-30.
28. Id. at 2-14.
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 29. Id. at 74-82.
30. Id. at 80-81.
31. Id. at 85-90.
32. Id. at 95-96.

33. Rollo, p. 67.

34. CA rollo, p. 29. The RTC said, "As opined by the Presiding Judge of Branch 71 of this Court
in the case where the plaintiff was acquitted of the crime of estafa, the delay in tapping
or connection of power line to the house of the defendants could possibly be due to the
resentment harbored by certain employees of ZAMECO in not having been awarded the
project of electrical installation in the house of the Caswells at the price offered by
them."

35. Rollo, pp. 60-61.

36. CA rollo, p. 80.
37. CIVIL CODE, Article 2199.
38. Viron Transportation Company, Inc. v. Delos Santos, 399 Phil. 243, 255 (2000).

39. G.Q. Garments, Inc. v. Miranda, 528 Phil. 341, 358 (2006).
40. Rollo, p. 94.
41. Id. at 95. N.B. The invoice indicates that Peter Eduria Enterprises' address is located at #41
Silangan Park, Marulas, Valenzuela City.
42. Id. at 96.
43. Id. at 183.
44. See MTC Decision, CA rollo, pp. 15-23.

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