Case Digest (G.R. No. 176162)
Facts:
National Power Corporation v. Court of Appeals and Engineering Construction, Inc., G.R. Nos. L-47379 and L-47481, May 16, 1988, Supreme Court Third Division, Gutierrez, Jr., J., writing for the Court.
Plaintiff-respondent Engineering Construction, Inc. (ECI) entered into a contract on August 4, 1964 with the National Waterworks and Sewerage Authority (NAWASA) to construct the 2nd Ipo-Bicti Tunnel and appurtenant works, to be completed within 800 calendar days from notice to proceed. The project had two major phases: a 7-kilometer tunnel (already completed by September 1967) and the outworks at both tunnel ends; after finishing tunnel excavation at the Bicti site, ECI transferred equipment to the Ipo site to complete remaining work.
On November 4, 1967 typhoon “Welming” struck Central Luzon. Because reservoir levels at the Angat Dam (near Ipo) rose rapidly, National Power Corporation (NPC) opened the spillway gates to prevent overtopping. Floodwaters rushing from the dam hit ECI’s installations at the Ipo site, destroying or washing away stockpiled materials, camp facilities, equipment and permanent structures.
ECI sued NPC for damages. The trial court awarded compensatory (actual) damages, consequential damages (including alleged crane rental and an alleged lost bonus from NAWASA), exemplary damages, and attorney’s fees. The Court of Appeals affirmed liability and the award of P675,785.31 as actual damages, but reduced consequential damages sharply (accepting only a one-month crane rental of about P19,200), eliminated the P120,000 bonus claim and exemplary damages for lack of gross negligence, and reduced attorney’s fees from P50,000 to P30,000.
NPC filed a petition (G.R. No. L-47379) asking the Court to set aside the Court of Appeals’ finding of liability, contending the flooding was an act of God/force majeure. ECI filed a cross-petition (G.R. No....(Subscriber-Only)
Issues:
- Was NPC exempt from liability under the doctrine of force majeure, or was it liable for damages because its negligence concurred with the typhoon’s effects?
- Did the Court of Appeals correctly reduce consequential damages (including the crane rental and the alleged P120,000 bonus) and reduce attorney’s fees?
- Was the elimination of exemplary damages proper because NPC’s conduct did not amou...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
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Doctrine:
- (Subscriber-Only)