Case Digest on Obligations and Contracts: Accessory Contract - Stronghold Insurance Company Inc. v. Spouses Rune and Lea Stroem G.R. No. 204869
Stronghold Insurance Company Inc. v. Spouses Rune and Lea Stroem G.R. No. 204869, [January 21, 2015] Facts: Spouses Stroem entered an Owners-Contractor Agreement with Asis-Leif & Company, Inc. (ALCI) represented by Cynthia Asis-Leif for the construction of a two-storey house on their lot. ALCI secured a performance bond in the amount of P4.5M from Stronghold Insurance Company (SIC) whereby the latter and ALCI bound themselves solidarily to pay the Stroem spouses the agreed amount in the event the construction is not completed. ALCI failed to finish the project on time despite repeated demands and the Spouses Stroem rescinded the agreement and hired an independent appraiser to evaluate the progress of the construction project. They later filed a complaint for breach of contract with damages against ALCI and SIC. Only SIC was served with summons. The RTC ruled in favor of the Spouses Stroem and ordered SIC to pay damages. SIC argued that the RTC should have dismissed th...