H. O’LEARY, PLAINTIFF AND APPELLEE, VS. MACONDRAY & CO., INC., DEFENDANT AND APPELLANT.

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STATEMENT

It is alleged that on January 30, 1920, the plaintiff, who is a resident of
Manila, and the defendant, a domestic cor- poration, made the following
agreement:

“MACONDRAY & CO.”

“Manila, P. I.”

“Through G. H. Hayward.

“SIRS: Appertaining to the residence to be erected for your firm in Pasay,
for which I have been requested by G. H. Hayward to submit a proposition, I have
the honor to state that I have examined the plans and site and would undertake
the work and complete the building in accordance with the plans and
instructions, and under the supervision of the said architect for the amount of
the actual cost plus twelve and one-half per cent (12½%).

“Payments to be made monthly on statements supported by vouchers, approved
and certified to by the architect. “ft is understood that time is an important
provision, and with due consideration therefor materials suitable for the work
are to be purchased in such quantities and at such times as may appear to be,to
your best interest.

That plaintiff commenced the construction of the building under the
supervision of the architect, and continued the work thereon until near its
completion, and kept and performed all the terms and provisions of the contract
by him to be kept and performed, and that pursuant to such agreement he paid out
for labor and materials the sum of P20,287.03, which was the actual cost; and
that the defendant is indebted to him in the further sum of P2,535.83, being 12½
per cent of the actual cost of such labor and materials, and for and on account
of his services and superintendence of the building, and he prays judgment for
P22,822.86, with interest from the filing of the complaint and costs.

In its second amended answer, after admitting the making of the contract and
the formal allegations of the complaint, the defendant denies all other material
allegations, and, as a special defense, alleges that, through plaintiff’s
negligence in the construction of the building and the purchase of materials,
the defendant was damaged in the sum of P32,624.25, as specified in seven
different counterclaims. It is then alleged that the plaintiff was indebted to
the Luneta Motor Company in the sum of P702.49, and to the Insular Lumber
Company in the sum of P9,766.23, both of which claims are assigned to the
defendant, and it prays judgment against the plaintiff for the total of all of
such claims amounting to P43.092.97.

The parties entered into a stipulation as to certain exhibits, and upon such
issues, the trial court rendered judgment in favor of the plaintiff for
P12,201.99, with legal interest from the filing of the complaint and costs, from
which the defendant appeals, contending that the court erred in allowing
interest from the filing of the complaint, and in its computation and as to the
duplicated item of the Tuason & Sampedro bill, in refusing to receive
evidence of the rental value of the house, in failing to make special findings
of fact, and in failing to find that the delay caused in the completion of the
house was caused by plaintiff’s negligence, in finding for the plaintiff on
defendant’s second counterclaim for damages in the sum of P797, in finding for
the plaintiff on defendant’s third counterclaim for damages in the sum of
P5,440.11, and in finding for the plaintiff on defendant’s fourth counterclaim
for damages in the sum of P13,407.25, the amount of the alleged increase in the
cost of labor caused by plaintiff’s negligence.

JOHN, J.:

Plaintiff’s cause of action is founded upon the contract above quoted, the
making of which defendant admits. By its express terms, plaintiff says that he
“would undertake the work and complete the building in accordance with the plans
and instructions, and under the supervision of the said architect for the amount
of the actual cost plus twelve and one-half per cent (12½%).” Payments are to be
made on monthly statements accompanied by vouchers to be approved and certified
by the architect. It then recites:

“It is understood that time is an important provision, and with due
consideration therefor materials suitable for the work are to be purchased in
such quantities and at such times as may appear to be to your best
interest.”

To say the least, the contract was very loosely drawn. No date is specified
in which the building is to be completed, and time is not made the essence of
the contract. It is true that the materials were to be purchased in such
quantities and at such times as may appear to be to the defendant’s
interest.

The defense is founded upon the theory that the labor was not furnished and
that the materials were not purchased for its best interest. There is no claim
or pretense of fraud, or that the plaintiff was dishonest. In its final
analysis, defendant’s counterclaims are founded upon plaintiff’s mistakes and.
errors of judgment in the employment of labor and the purchase of materials.

Assuming that there were mistakes and errors of judgment only, the plaintiff
would not be liable for them under the contract. The fact that the price of
lumber or of labor went up or down, or was cheaper at a certain time, would not
make the plaintiff liable for a breach of contract, so long as he was exercising
his best judgment and acting in good faith.

It will be noted that the materials were to be purchased “in such quantities
and at such times as may appear to be to your best interest.” That vested in the
plaintiff a discretionary power as to the time and manner for the purchase of
materials, for which he would not be liable for honest mistakes or errors of
judgment. The same thing is true as to the employment of labor. It is true that
the contract recites “that time is an important provision.” But it does not say
when the building is to be completed, or that time is of the essence of the
contract. In other words, under the terms of the contract, the employment of
labor, the purchase of materials and the completion and construction of the
building were all matters which were largely left to the discretion of the
plaintiff, for which he would not be liable for honest mistakes or errors of
judgment.

Pending the trial the judge of the lower court made a personal inspection of
the building and of the labor and materials used in its construction, and upon
all of such questions, we agree with the trial court.

Although this action is founded upon contract, the amount of plaintiff’s
claim was vigorously disputed. In fact the defendant claimed judgment against
the plaintiff for a much larger amount. Upon such a state of facts, and under
recent decisions of this court, plaintiff is only entitled to interest from the
date of the judgment, and defendant’s first assignment of error must be
sustained. It also appears that a clerical error was made in computing 12½ per
cent on P1,772.14, and that the amount which should be deducted was P221.52 and
not P22.15, as found by the trial court. Correcting this error, the amount of
plaintiff’s judgment should be P12,002.63.

The judgment of the lower court will be modified, and instead of P12,201.99,
the amount of plaintiff’s judgment will be P12,002.63, which will draw interest
at the rate of 6 per cent per annum from the first day of August, 1923, the date
of the judgment in the lower court. In all other respects, the judgment is
affirmed, with costs in favor of the appellant in this court. So ordered.

Araullo, C. J., Street, Avancena, Ostrand, and Romualdez,
JJ., concur.