Title
Allen vs. Province of Albay
Case
G.R. No. 11433
Decision Date
Dec 20, 1916
A contractor sued for withheld payments after bridge construction delays; court ruled delays were his fault, upheld deductions, and dismissed his claims.
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Case Digest (G.R. No. 11433)

Facts:

  1. Contract Formation and Terms:

    • On February 25, 1913, the Director of Public Works, acting for the Provinces of Albay and Ambos Camarines, advertised for sealed proposals to construct a reinforced concrete bridge over the Agus River.
    • The plaintiff, Arthur F. Allen, submitted his bid on March 20, 1913, proposing to complete the bridge for P30,690.
    • The contract was executed on June 26, 1913, with the bridge to be completed by September 1, 1913. The contract included provisions for liquidated damages of P25 per day for delays.
  2. Delays and Extensions:

    • The plaintiff encountered delays due to shortages of cement, road conditions, and a quarantine on animals, which hindered the transportation of materials.
    • On December 1, 1913, the plaintiff requested an extension until February 15, 1914, citing these delays.
    • The provincial boards of Albay and Ambos Camarines passed resolutions granting the extension but imposed conditions, including deductions for inspection charges, ferry operation, and liquidated damages.
  3. Completion and Deductions:

    • The bridge was completed and accepted on April 1, 1914.
    • The plaintiff was paid the contract price minus P1,301.45, which included deductions for liquidated damages, inspection charges, and ferry operation costs.
  4. Plaintiff’s Claims:

    • The plaintiff filed a lawsuit to recover the deducted amount (P1,301.45), P200 for overcharges on steel, P2,000 for damages caused by the defendants' delay, and P878 for extra work and materials.

Issue:

  1. Delay in Completion:

    • Whether the delay in completing the bridge was due to the plaintiff’s fault or the defendants’ negligence.
  2. Deductions from Contract Price:

    • Whether the defendants were entitled to deduct:
      • P925 as liquidated damages.
      • P201.42 for ferry operation and maintenance.
      • P175.03 for inspection expenses.
  3. Plaintiff’s Claims:

    • Whether the plaintiff was entitled to recover:
      • P200 for overcharges on steel.
      • P2,000 for damages caused by the defendants' delay.
      • P878 for extra work and materials.

Ruling:

  1. Delay in Completion:

    • The court ruled that the delay in completing the bridge was primarily due to the plaintiff’s fault and not the defendants’ negligence.
  2. Deductions from Contract Price:

    • The court upheld the defendants’ right to deduct:
      • P925 as liquidated damages.
      • P201.42 for ferry operation and maintenance.
      • P175.03 for inspection expenses.
  3. Plaintiff’s Claims:

    • The court dismissed the plaintiff’s claims for:
      • P200 for overcharges on steel, as there was no evidence to support this claim.
      • P2,000 for damages caused by the defendants' delay, as the delay was not attributable to the defendants.
      • P878 for extra work and materials, as the alteration was not authorized in writing.

Ratio:

  1. Liquidated Damages:

    • The court held that the plaintiff was liable for liquidated damages due to the delay in completing the bridge. The contract explicitly stated that time was of the essence, and the plaintiff failed to complete the work by the agreed-upon date.
  2. Defendants’ Right to Deduct:

    • The court found that the defendants were entitled to deduct the amounts for inspection charges, ferry operation, and liquidated damages as per the contract terms and the resolutions passed by the provincial boards.
  3. Plaintiff’s Claims:

    • The court ruled that the plaintiff’s claims for overcharges, damages, and extra work were unsupported by evidence or were not in compliance with the contract terms, particularly the requirement for written authorization for alterations.
  4. Mutual Delays:

    • The court noted that even if both parties were responsible for delays, the plaintiff could not be held liable for liquidated damages unless specific damages were proven. However, in this case, the plaintiff’s delays were deemed the primary cause of the breach.


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