ELPIDIO S.

UY, doing business under the name and style EDISON DEVELOPMENT &
CONSTRUCTION, Petitioner, v. PUBLIC ESTATES AUTHORITY and the HONORABLE COURT OF
APPEALS, Respondents.

Facts:
 Respondent Public Estates Authority (PEA) was designated as project manager by the Bases Conversion
Development Authority (BCDA), primarily tasked to develop its 105-hectare demilitarized lot in Fort
Bonifacio, Taguig City into a first-class memorial park to be known as Heritage Park. PEA then engaged the
services of Makati Development Corporation (MDC) to undertake the horizontal works on the project; and
Uy, doing business under the name and style Edison Development and Construction (EDC), to do the
landscaping.
 PEA and EDC signed the Landscaping and Construction Agreement.
 EDC undertook to complete the landscaping works in four hundred fifty (450) days commencing on the date
of receipt of the notice to proceed.
 EDC received the notice to proceed on December 3, 1996; and three (3) days after, it commenced the
mobilization of the equipment and manpower needed for the project. PEA, however, could not deliver any
work area to EDC because the horizontal works of MDC were still ongoing. EDC commenced the landscaping
works only on January 7, 1997 when PEA finally made an initial delivery of a work area.
 PEA continuously incurred delay in the turnover of work areas due to the presence of squatters. The
contract period of 450 days was extended to 693 days.
 In view of the delay in the delivery of work area, EDC claimed additional cost from the PEA-PMO
amounting to P181,338,056.30.
 Uy alleged that he incurred additional rental costs for the equipment, which were kept on standby, and
labor costs for the idle manpower. He added that the delay by PEA caused the topsoil at the original
supplier to be depleted; thus, he was compelled to obtain the topsoil from a farther source, thereby
incurring extra costs. He also claims that he had to mobilize water trucks for the plants and trees which had
already been delivered to the site. Furthermore, it became necessary to construct a nursery shade to
protect and preserve the young plants and trees prior to actual transplanting to the landscaped area.
 The PEA-PMO evaluated the EDC's claim and arrived at a lesser amount of P146,484,910. The evaluation
of PEA-PMO was then referred to the Heritage Park Executive Committee (ExCom) for approval.
 The Performance Audit Committee (PAC) reviewed the progress report submitted by the works engineer
and noted that the EDC's landscaping works were behind schedule by twenty percent (20%). The PAC
considered this delay unreasonable and intolerable, and immediately recommended to BCDA the
termination of the landscaping contract. The BCDA adopted PAC's recommendation and demanded from
PEA the termination of the contract with EDC. In compliance, PEA terminated the agreement.
 PEA fully paid all the progress billings up to August 26, 1999, but it did not heed EDC's additional claims.
 Consequently, Uy filed a Complaint with the Construction Industry Arbitration Commission (CIAC)

CIAC:
Ruled in favor of Uy. Petitioner is directed to pay P27,930,018.11 with 12% interest per annum until full payment
of the awarded amount shall have been made.

CA:
Affirmed the decision of CIAC and denied motions submitted by respondent and petitioner.

Issue:

WON Uy is entitled payment at a higher price (He posits that PEA already admitted its liability, pegged
at P146,484,910.10. Thus, he faults the CA for awarding a lesser amount)

Ruling:

We meticulously reviewed the records before us and failed to discern any admission of liability on the part of PEA.
 By no stretch of the imagination can we consider this memorandum an admission of liability on the part of
PEA. First, nowhere in the memorandum does it say that PEA is admitting its liability. The evaluation
contained in the above memorandum is merely a verification of the accuracy of EDC's claims. As a matter of
fact, the evaluation is still subject for review by the project manager, whose decision on the matter requires
the approval of the Heritage Park Ex Com. Second, Messrs. Ignacio and Urcia had no legal authority to make
 admissions on behalf of PEA. Thus, even assuming that the evaluation contained in the memorandum was in
the nature of an admission, the same cannot bind PEA. Third, Uy filed his complaint with the CIAC because
PEA did not act on EDC's various claims. This supports our conclusion that PEA never admitted, but on the
contrary denied, whatever additional liabilities were claimed by Uy under the landscaping contract.
 Neither do we find any admission of liability on the part of PEA during the proceedings before the CIAC.
What was admitted by PEA was that PMO evaluated the claim at the lesser amount of  P146,484,910. The
admission of the evaluation made by PEA cannot translate to an admission of liability. There is simply no
basis for Uy to claim that PEA had admitted its liability.

We find a need to modify, by increasing, the award for standby equipment cost.

 CIAC found that PEA incurred delays in the turnover of work areas. Surely, on the days that EDC was waiting
for the turn over of additional work areas, it was paying rentals for the equipment on standby. Yet, CIAC
completely ignored these delays in determining the cost of equipment on standby.

Records establish that EDC promptly commenced the landscaping work on every area that was turned over.
EDC, in fact, shifted its equipment where there was an advance delivery, if only to minimize the additional
expenses incurred by reason of the long delays in the turnover of the other work areas. Thus, in addition to
the award of P19,604,132.06 for cost of idle time for equipment by reason of the reduction of scope of
work, Uy is entitled to the cost of idle time for equipment by reason of the delay incurred in the delivery of
work areas.

As to the awards of P2,275,721.00, for the cost of idle manpower, and P6,050,165.05, for the construction of the
nursery shade net area, we find no reason to disturb the same, as Uy never raised this issue in his petition.

Next, we resolve Uy's claims for costs for additional hauling distance of topsoil and for mobilization of water truck.

 Article 1724 of the Civil Code provides:

ART. 1724. The contractor who undertakes to build a structure or any other work for a stipulated price, in
conformity with plans and specifications agreed upon with the land-owner, can neither withdraw from the
contract nor demand an increase in the price on account of the higher cost of labor or materials, save when
there has been a change in the plans and specifications, provided:
(1) Such change has been authorized by the proprietor in writing;
(2) The additional price to be paid to the contractor has been determined in writing by both parties.

By this article, a written authorization from the owner is required before the contractor can validly
recover his claim. The evident purpose of the provision is to avoid litigation for added costs incurred by
reason of additions or changes in the original plan.

EDC did not secure the required written approval of PEA's general manager before obtaining the topsoil
from a farther source. Indisputably, Uy mobilized water trucks for the landscaping projects and, certainly,
incurred additional costs. But like his claim for additional cost of topsoil, such additional expenses were
incurred without prior written approval of PEA's general manager. Thus, he cannot claim payment for such
cost from PEA.

The written consent of the owner to the increased costs sought by the respondent is not a mere formal
requisite, but a vital precondition to the validity of a subsequent contract authorizing a higher or additional
contract price. Moreover, the safeguards enshrined in the provisions of Article 1724 are not only intended
to obviate future misunderstandings but also to give the parties a chance to decide whether to bind one's
self to or withdraw from a contract.

 Neither can we hold PEA liable based on solutio indebiti, the legal maxim that no one should enrich itself at
the expense of another. As we explained in Powton Conglomerate, Inc. v. Agcolicol,
the principle of unjust enrichment cannot be validly invoked by the respondent who, through his own act
or omission, took the risk of being denied payment for additional costs by not giving the petitioners prior
notice of such costs and/or by not securing their written consent thereto, as required by law and their
contract.
Uy cannot, therefore, claim from PEA the costs of the additional hauling distance of topsoil, and of the
mobilization of water trucks.