PNR v. Kanlaon (G.R. No. 182967; April 6, 2011)
CASE DIGEST: PHILIPPINE NATIONAL RAILWAYS, Petitioner, v. KANLAON CONSTRUCTION ENTERPRISES CO., INC.,Respondent. (G.R. No. 182967; April 6, 2011). FACTS: In July 1990, PNR and Kanlaon entered into contracts for the repair of three PNR station buildings and passenger shelters.By November 1990, Kanlaon alleged that it had already completed the three projects. On 30 June 1994, Kanlaon sent a demand letter to PNR requesting for the release of the retention money. However, PNR denied Kanlaon’s demand because of the Notices of Suspension issued by the Commission on Audit (COA). Thus, forcing Kanlaon to file a complaint for collection of sum of money plus damages against PNR. In its amended complaint, Kanlaon even impleaded the COA. In its answer, PNR admitted the existence of the three contracts but alleged that Kanlaon did not comply with the conditions of the contract. Moreover, they alleged that Kanlaon did not complete the projects. Thus, they did not have any unpaid balance. In a