Case Digest (G.R. No. 108172-73)
Facts:
Continental Cement Corporation v. Asea Brown Boveri, Inc., BBC Brown Boveri, Corp., and Tord B. Erikson, G.R. No. 171660, October 17, 2011, the Supreme Court First Division, Del Castillo, J., writing for the Court.Petitioner Continental Cement Corporation (CCC) contracted respondents Asea Brown Boveri, Inc. (ABB) and BBC Brown Boveri, Corp. to repair a 160 KW Kiln DC Drive Motor under Purchase Orders Nos. 17136–17137 in July 1990. The repair work was supervised, respondents say, by Tord B. Eriksson (an ABB vice‑president). The contract documents included General Conditions (including Clause 7 limiting liability and excluding consequential damages) attached to ABB’s letter of offer.
After repeated unsuccessful repairs and repeated test failures in October and November 1990 and March 1991, CCC alleged it suffered production losses, labor and crane rental costs, penalties for delay, and interest; it filed a complaint for sums and damages on October 23, 1991 in Branch 101 of the Regional Trial Court (RTC) of Quezon City, docketed Civil Case No. Q‑91‑10419. CCC claimed loss of production amounting to P10,600,000.00 (among other items) and sought attorney’s fees; respondents defended that Clause 7 of the General Conditions excluded liability for consequential damages and that CCC had been bound by those General Conditions by virtue of accepting ABB’s purchase offer.
The RTC (Judge Pedro T. Santiago) rendered judgment on August 30, 1995 in favor of CCC, rejecting respondents’ limited‑liability defense because respondents failed to prove CCC received the General Conditions; the RTC awarded production loss, labor and crane rental, and attorney’s fees. On appeal, the Court of Appeals (CA) reversed in a Decision dated August 25, 2005, applying the exculpatory Clause 7 and ruling that there is no implied warranty for repair work sufficient to make respondents liable for production loss; it dismissed the complaint. The CA denied reconsideration by Resolution dated February 16, 2006.
CCC filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeki...(Pro-only)
Issues:
- Whether the Court of Appeals gravely erred in applying the terms of the General Conditions of Purchase Orders Nos. 17136 and 17137 to exculpate respondents from liability in this case.
- Whether the Court of Appeals erred in applying the concepts of implied warranty and warranty against hidden defects of the New Civil Code to exculpate respondents from contractual obli...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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