52.

] NPC vs CA GRL-47379 161 SCRA 334 (1988)

FACTS
- ECI executed a contract with NAWASA on Aug. 4, 1964, to construct the 2nd IpoBicti Tunnel in Norzagaray, Bulacan, complete it within 800 calendar days from the date the Contractor receives the formal notice to
proceed and to furnish all tools, labor, equipment, and materials needed. The construction of the tunnel covered an area that
included the Ipo river where the Ipo Dam (Angat Hydro-electric Project and Dam) of defendant NPC is located.
- On Nov. 4, 1967, typhoon Welming struck the project area and bringing with it heavy rains and causing water in the reservoir of
Angat Dam to rapidly rise, reaching the danger level of 212 m above sea level. Thus to prevent overflow, NPC caused the opening
of the spillway gates. The opening of the gates caused an extraordinary large volume of water to rush out, hitting the installations
and construction works of ECI. Effectively washing away, damaging or destroying its stockpile of materials and supplies, camp
facilities, permanent structures and accessories.
- The Court of Appeals sustained the findings of the trial court that the maintainers of the dam opened the gates when the typhoon
was already at its height, when they knew full well that it was far safer to open them gradually. The court also found that NPC had
known of the coming of the typhoon 4 days prior to it actually hitting the area. Thus, the trial court and the appellate court found NPC
negligent and held liable for the damages. Petitioner NPC contends that this CA decision is erroneous on the ground that the
destruction and loss of ECIs equipment and facilities were due to force majeure, that the heavy rains brought about by the typhoon
was an extraordinary occurrence that they could not have foreseen.
- On the other hand, ECI assails the CAs reduction of the consequential damages awarded by the trial court from P 333,200 to P
19K on the grounds that the appellate court had no basis in concluding that ECI acquired a new Crawler-type crane and therefore, it
only can claim rentals for the temporary use of the leased crane for a period of one month; and that the award of P 4K a day or P
120K a month bonus is justified since the period limitation on ECI's contract with NAWASA had dual effects, i.e., bonus for earlier
completion and liquidated damages for delayed performance; and in either case at the rate of P 4K daily. Thus, since NPC's
negligence compelled work stoppage for a period of one month, the said award of P 120K is justified.

ISSUES
1. WON respondent CA erred in holding NPC liable for damages
2. WON CA erred in reducing the consequential damages from P 333,200 to P
19,000
3. WON CA erred in eliminating exemplary damages
4. WON CA erred in reducing attorneys fees from P 50K to P 30K
HELD
1. No. Even though the typhoon was an act of God or force majeure, NPC cannot escape liability because its negligence was the
proximate cause of the loss and damage.
Ratio As held in Juan Nakpil & Sons v. CA, the act of God doctrine requires that the act must be occasioned exclusively by the
violence of nature and human agencies had no part therein. When the effect is found to be in part the result of the participation of
man, whether it be active intervention, neglect or failure to act, the whole occurrence is humanized and therefore removed from the
rules applicable to the acts of God.
- Furthermore, this is question of fact which properly falls within the jurisdiction of the CA and will not be disturbed by this Court
unless it is clearly unfounded.
Ratio Findings of fact of the CA are generally final and conclusive upon the SC. It is settled that the SC is not a trier of facts. It is
not supposed to weigh evidence and will generally not disturb findings of fact when supported by substantial evidence.
2. No. From the findings of the appellate court, while there was no categorical statement or admission on the part of ECI that it
bought a new crane to replace the damaged one, a sales contract was presented to the effect that the new crane would be delivered
to it by Asian Enterprises within 60 days from the opening of the letter of credit at the cost of P 106,336.75. The offer was made by
Asian Enterprises a few days after the flood. Comparing the amount for a brand new crane and paying the alleged amount of P 4K a
day as rental for the use of a temporary crane, which use petitioner ECI alleged to have lasted for a period of one year, thus, totaling
P
120K plus the fact that there was already a sales contract between it and Asian Enterprises, there is no reason why ECI should opt
to rent a temporary crane for a period of one year. The appellate court also found that the damaged crane was subsequently
repaired and reactivated and the cost of repair was P 77K. Therefore, it included the said amount in the award of compensatory
damages, but not the value of the new crane. We do not find anything erroneous in the decision of the appellate court that the
consequential damages should represent only the service of the temporary crane for one month. A contrary ruling would result in the
unjust enrichment of ECI.
- The P 120K bonus was also properly eliminated as the same was granted by the trial court on the premise that it represented ECI's
lost opportunity "to earn the one month bonus from NAWASA." The loss or damage to ECI's equipment and facilities occurred more
than 3 years or 1,170 days after the execution of the contract, long after the stipulated deadline (within 800 calendar days) to finish
the construction.
No bonus, therefore, could have been possibly earned by ECI at that point in time. The supposed liquidated damages for failure to
finish the project within the stipulated period or the opposite of the claim for bonus is not clearly presented in the records of these

petitions. It is not shown that NAWASA imposed them.

3. No. The appellate court found that there was no bad faith on the part of NPC and that neither can its negligence be considered
gross.
Ratio As was held in Dee Hua Liong Electrical Equipment Corp. v. Reyes, exemplary damages cannot be awarded to private
respondent because petitioner is not shown to have acted in a wanton, fraudulent, reckless or oppressive manner.
4. No. There are no compelling reasons to set aside the appellate courts finding that the latter amount suffices for the services
rendered by ECIs counsel. Disposition Petitions are both dismissed for lack of merit