Case Digest (G.R. No. 161083)
Facts:
On August 4, 1964, Engineering Construction, Inc. (ECI), as the winning bidder, contracted with the National Waterworks and Sewerage Authority (NAWASA) to build the Second Ipo–Bicti Tunnel, Intake and Outlet Structures, and appurtenant works in Norzagaray and Bicti, Bulacan, with an 800-day completion period from notice to proceed. By September 1967, ECI had finished the seven-kilometer tunnel and began transferring equipment from the Bicti to the Ipo site, where some outworks remained. On November 4, 1967, Typhoon “Welming” struck Central Luzon, causing heavy rains that raised the Angat Dam reservoir at 60 centimeters per hour. National Power Corporation (NPC), operator of the dam, delayed opening its spillway gates until the storm’s peak, resulting in a sudden release of water that devastated ECI’s camp facilities, materials, equipment, permanent structures, and supplies at the Ipo site. ECI brought suit in the trial court, which awarded actual damages of ₱675,785.31, consequ
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Case Digest (G.R. No. 161083)
Facts:
- Contract and Project
- On August 4, 1964, Engineering Construction, Inc. (ECI) executed a contract with the National Waterworks and Sewerage Authority (NAWASA) to construct the 2nd Ipo‐Bicti Tunnel, Intake and Outlet Structures, and Appurtenant Features in Norzagaray, Bulacan, to be completed within 800 calendar days from notice to proceed.
- The work comprised two major phases: (a) a 7-kilometer tunnel excavation through Norzagaray mountain from the Ipo River to Bicti, and (b) the outworks at both tunnel ends.
- Progress of Construction
- By September 1967, ECI had completed the tunnel excavation (Phase I); some outworks at the Bicti end remained under construction. Equipment no longer needed at Bicti was moved to the Ipo site for remaining works.
- On November 4, 1967, Typhoon “Welming” struck Central Luzon. Heavy rains caused the Angat Dam reservoir’s water level to rise at 60 cm per hour, reaching 212 m above sea level. To avert overflow, NPC opened the spillway gates in a single, forceful operation.
- Damage and Trial Court Judgment
- An extraordinary volume of water surged through the gates, devastating ECI’s camp facilities, stockpiled materials, equipment, permanent structures, and accessories at the Ipo site.
- The trial court awarded ECI:
- Compensatory damages – ₱675,785.31 (camp facilities, equipment/parts, materials, structures)
- Consequential damages – ₱333,200.00 (crane rentals and unrealized contract bonus)
- Exemplary damages – amount unspecified
- Attorney’s fees – ₱50,000.00
- Court of Appeals Decision
- Affirmed liability of NPC for negligence in opening spillway gates at typhoon’s peak, despite force majeure argument.
- Sustained compensatory damages at ₱675,785.31.
- Reduced consequential damages to ₱19,200.00 (one-month crane rental rate of ₱40/hour × 16 hours/day × 30 days), noting ECI had contracted to purchase a new crane (₱106,336.75) and repaired the old one (₱77,000.00).
- Eliminated the ₱120,000.00 bonus (loss occurred 1,170 days after contract deadline).
- Deleted exemplary damages (no gross negligence).
- Reduced attorney’s fees to ₱30,000.00.
Issues:
- Whether NPC’s opening of the spillway gates during Typhoon Welming constitutes negligence that negates a force majeure defense.
- Whether the Court of Appeals erred in:
- Reducing consequential damages from ₱333,200.00 to ₱19,200.00.
- Eliminating the ₱120,000.00 bonus for early completion.
- Deleting exemplary damages.
- Reducing attorney’s fees from ₱50,000.00 to ₱30,000.00.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)