The trial court found that constructing a deep well was not part of the agreement between the parties based on the contract proposals submitted. The Court of Appeals reversed this finding. The Supreme Court reinstated the trial court's decision, finding that the contract proposals clearly did not include constructing a deep well. However, the Supreme Court upheld the Court of Appeals' ruling that the petitioner was obligated to reconstruct the windmill within the one-year warranty period after it collapsed, unless it could prove the collapse was due to a typhoon which would qualify as a force majeure exempting it from liability.
The trial court found that constructing a deep well was not part of the agreement between the parties based on the contract proposals submitted. The Court of Appeals reversed this finding. The Supreme Court reinstated the trial court's decision, finding that the contract proposals clearly did not include constructing a deep well. However, the Supreme Court upheld the Court of Appeals' ruling that the petitioner was obligated to reconstruct the windmill within the one-year warranty period after it collapsed, unless it could prove the collapse was due to a typhoon which would qualify as a force majeure exempting it from liability.
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The trial court found that constructing a deep well was not part of the agreement between the parties based on the contract proposals submitted. The Court of Appeals reversed this finding. The Supreme Court reinstated the trial court's decision, finding that the contract proposals clearly did not include constructing a deep well. However, the Supreme Court upheld the Court of Appeals' ruling that the petitioner was obligated to reconstruct the windmill within the one-year warranty period after it collapsed, unless it could prove the collapse was due to a typhoon which would qualify as a force majeure exempting it from liability.
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In finding for plaintiff, the trial court held that the
Republic of the Philippines
construction of the deep well was not part of the SUPREME COURT windmill project as evidenced clearly by the letter Manila proposals submitted by petitioner to respondent. 2 It FIRST DIVISION noted that "[i]f the intention of the parties is to include the construction of the deep well in the project, the same should be stated in the proposals. G.R. No. 117190 January 2, 1997 In the absence of such an agreement, it could be JACINTO TANGUILIG doing business under the safely concluded that the construction of the deep name and style J.M.T. ENGINEERING AND well is not a part of the project undertaken by the GENERAL MERCHANDISING, petitioner, plaintiff." 3 With respect to the repair of the windmill, vs. the trial court found that "there is no clear and COURT OF APPEALS and VICENTE HERCE JR., convincing proof that the windmill system fell down respondents. due to the defect of the construction." 4 The Court of Appeals reversed the trial court. It ruled that the construction of the deep well was BELLOSILLO, J.: included in the agreement of the parties because This case involves the proper interpretation of the the term "deep well" was mentioned in both contract entered into between the parties. proposals. It also gave credence to the testimony of respondent's witness Guillermo Pili, the proprietor of Sometime in April 1987 petitioner Jacinto M. SPGMI which installed the deep well, that petitioner Tanguilig doing business under the name and style Tanguilig told him that the cost of constructing the J.M.T. Engineering and General Merchandising deep well would be deducted from the contract proposed to respondent Vicente Herce Jr. to price of P60,000.00. Upon these premises the construct a windmill system for him. After some appellate court concluded that respondent's negotiations they agreed on the construction of the payment of P15,000.00 to SPGMI should be applied windmill for a consideration of P60,000.00 with a to his remaining balance with petitioner thus one-year guaranty from the date of completion and effectively extinguishing his contractual obligation. acceptance by respondent Herce Jr. of the project. However, it rejected petitioner's claim of force Pursuant to the agreement respondent paid majeure and ordered the latter to reconstruct the petitioner a down payment of P30,000.00 and an windmill in accordance with the stipulated one-year installment payment of P15,000.00, leaving a guaranty. balance of P15,000.00. His motion for reconsideration having been denied On 14 March 1988, due to the refusal and failure of by the Court of Appeals, petitioner now seeks relief respondent to pay the balance, petitioner filed a from this Court. He raises two issues: firstly, complaint to collect the amount. In his Answer whether the agreement to construct the windmill before the trial court respondent denied the claim system included the installation of a deep well and, saying that he had already paid this amount to the secondly, whether petitioner is under obligation to San Pedro General Merchandising Inc. (SPGMI) reconstruct the windmill after it collapsed. which constructed the deep well to which the windmill system was to be connected. According to We reverse the appellate court on the first issue but respondent, since the deep well formed part of the sustain it on the second. system the payment he tendered to SPGMI should The preponderance of evidence supports the finding be credited to his account by petitioner. Moreover, of the trial court that the installation of a deep well assuming that he owed petitioner a balance of was not included in the proposals of petitioner to P15,000.00, this should be offset by the defects in construct a windmill system for respondent. There the windmill system which caused the structure to were in fact two (2) proposals: one dated 19 May collapse after a strong wind hit their place. 1 1987 which pegged the contract price at P87,000.00 Petitioner denied that the construction of a deep (Exh. "1"). This was rejected by respondent. The well was included in the agreement to build the other was submitted three days later, i.e., on 22 windmill system, for the contract price of May 1987 which contained more specifications but P60,000.00 was solely for the windmill assembly proposed a lower contract price of P60,000.00 (Exh. and its installation, exclusive of other incidental "A"). The latter proposal was accepted by materials needed for the project. He also disowned respondent and the construction immediately any obligation to repair or reconstruct the system followed. The pertinent portions of the first letter- and insisted that he delivered it in good and working proposal (Exh. "1") are reproduced hereunder — condition to respondent who accepted the same In connection with your Windmill System and without protest. Besides, its collapse was Installation, we would like to quote to you as attributable to a typhoon, a force majeure, which follows: relieved him of any liability. One (1) Set — Windmill used instead the conjunctions "and" or "with." Since suitable for 2 inches diameter the terms of the instruments are clear and leave no deepwell, 2 HP, capacity, 14 doubt as to their meaning they should not be feet in diameter, with 20 disturbed. pieces blade, Tower 40 feet Moreover, it is a cardinal rule in the interpretation of high, including mechanism contracts that the intention of the parties shall be which is not advisable to accorded primordial consideration 5 and, in case operate during extra-intensity of doubt, their contemporaneous and subsequent wind. Excluding cylinder pump. acts shall be principally considered. 6 An UNIT CONTRACT PRICE examination of such contemporaneous and P87,000.00 subsequent acts of respondent as well as the attendant circumstances does not persuade us to The second letter-proposal (Exh. "A") provides as uphold him. follows: Respondent insists that petitioner verbally agreed In connection with your Windmill system, that the contract price of P60,000.00 covered the Supply of Labor Materials and Installation, installation of a deep well pump. He contends that operated water pump, we would like to quote since petitioner did not have the capacity to install to you as the pump the latter agreed to have a third party do follows — the work the cost of which was to be deducted from One (1) set — Windmill the contract price. To prove his point, he presented assembly for 2 inches or 3 Guillermo Pili of SPGMI who declared that petitioner inches deep-well pump, 6 Tanguilig approached him with a letter from Stroke, 14 feet diameter, 1-lot respondent Herce Jr. asking him to build a deep well blade materials, 40 feet Tower pump as "part of the price/contract which Engineer complete with standard (Herce) had with Mr. Tanguilig." 7 appurtenances up to Cylinder We are disinclined to accept the version of pump, shafting U.S. adjustable respondent. The claim of Pili that Herce Jr. wrote International Metal. him a letter is unsubstantiated. The alleged letter One (1) lot — Angle bar, G.I. was never presented in court by private respondent pipe, Reducer Coupling, Elbow for reasons known only to him. But granting that Gate valve, cross Tee coupling. this written communication existed, it could not One (1) lot — Float valve. have simply contained a request for Pili to install a deep well; it would have also mentioned the party One (1) lot — Concreting who would pay for the undertaking. It strains materials foundation. credulity that respondent would keep silent on this F. O. B. Laguna matter and leave it all to petitioner Tanguilig to Contract Price P60,000.00 verbally convey to Pili that the deep well was part of the windmill construction and that its payment Notably, nowhere in either proposal is the would come from the contract price of P60,000.00. installation of a deep well mentioned, even remotely. Neither is there an itemization or We find it also unusual that Pili would readily description of the materials to be used in consent to build a deep well the payment for which constructing the deep well. There is absolutely no would come supposedly from the windmill contract mention in the two (2) documents that a deep well price on the mere representation of petitioner, pump is a component of the proposed windmill whom he had never met before, without a written system. The contract prices fixed in both proposals commitment at least from the former. For if indeed cover only the features specifically described the deep well were part of the windmill project, the therein and no other. While the words "deep well" contract for its installation would have been strictly and "deep well pump" are mentioned in both, these a matter between petitioner and Pili himself with the do not indicate that a deep well is part of the former assuming the obligation to pay the price. windmill system. They merely describe the type of That it was respondent Herce Jr. himself who paid deep well pump for which the proposed windmill for the deep well by handing over to Pili the amount would be suitable. As correctly pointed out by of P15,000.00 clearly indicates that the contract for petitioner, the words "deep well" preceded by the the deep well was not part of the windmill project prepositions "for" and "suitable for" were meant but a separate agreement between respondent and only to convey the idea that the proposed windmill Pili. Besides, if the price of P60,000.00 included the would be appropriate for a deep well pump with a deep well, the obligation of respondent was to pay diameter of 2 to 3 inches. For if the real intent of the entire amount to petitioner without prejudice to petitioner was to include a deep well in the any action that Guillermo Pili or SPGMI may take, if agreement to construct a windmill, he would have any, against the latter. Significantly, when asked why he tendered payment directly to Pili and not to petitioner, respondent explained, rather lamely, that fortuitous — unforeseeable nor unavoidable. he did it "because he has (sic) the money, so (he) On the contrary, a strong wind should be just paid the money in his possession." 8 present in places where windmills are constructed, otherwise the windmills will not Can respondent claim that Pili accepted his payment turn. on behalf of petitioner? No. While the law is clear that "payment shall be made to the person in whose The appellate court correctly observed that favor the obligation has been constituted, or his "given the newly-constructed windmill successor in interest, or any person authorized to system, the same would not have collapsed receive it," 9 it does not appear from the record that had there been no inherent defect in it which Pili and/or SPGMI was so authorized. could only be attributable to the appellee." 13 It emphasized that respondent had in his Respondent cannot claim the benefit of the law favor the presumption that "things have concerning "payments made by a third person." 10 happened according to the ordinary course The Civil Code provisions do not apply in the instant of nature and the ordinary habits of life." 14 case because no creditor-debtor relationship This presumption has not been rebutted by between petitioner and Guillermo Pili and/or SPGMI petitioner. has been established regarding the construction of the deep well. Specifically, witness Pili did not testify Finally, petitioner's argument that private that he entered into a contract with petitioner for respondent was already in default in the the construction of respondent's deep well. If SPGMI payment of his outstanding balance of was really commissioned by petitioner to construct P15,000.00 and hence should bear his own the deep well, an agreement particularly to this loss, is untenable. In reciprocal obligations, effect should have been entered into. neither party incurs in delay if the other does not comply or is not ready to comply in a The contemporaneous and subsequent acts proper manner with what is incumbent upon of the parties concerned effectively belie him. 15 When the windmill failed to function respondent's assertions. These properly it became incumbent upon circumstances only show that the petitioner to institute the proper repairs in construction of the well by SPGMI was for the accordance with the guaranty stated in the sole account of respondent and that contract. Thus, respondent cannot be said to petitioner merely supervised the installation have incurred in delay; instead, it is of the well because the windmill was to be petitioner who should bear the expenses for connected to it. There is no legal nor factual the reconstruction of the windmill. Article basis by which this Court can impose upon 1167 of the Civil Code is explicit on this point petitioner an obligation he did not expressly that if a person obliged to do something fails assume nor ratify. to do it, the same shall be executed at his The second issue is not a novel one. In a long cost. line of cases 11 this Court has consistently WHEREFORE, the appealed decision is held that in order for a party to claim MODIFIED. Respondent VICENTE HERCE JR. is exemption from liability by reason of directed to pay petitioner JACINTO M. fortuitous event under Art. 1174 of the Civil TANGUILIG the balance of P15,000.00 with Code the event should be the sole and interest at the legal rate from the date of the proximate cause of the loss or destruction of filing of the complaint. In return, petitioner is the object of the contract. In Nakpil vs. Court ordered to "reconstruct subject defective of Appeals, 12 four (4) requisites must concur: windmill system, in accordance with the one- (a) the cause of the breach of the obligation year guaranty" 16 and to complete the same must be independent of the will of the within three (3) months from the finality of debtor; (b) the event must be either this decision. unforeseeable or unavoidable; (c) the event must be such as to render it impossible for SO ORDERED. the debtor to fulfill his obligation in a normal Padilla, Vitug, Kapunan and Hermosisima, Jr., manner; and, (d) the debtor must be free JJ., concur. from any participation in or aggravation of the injury to the creditor. Footnotes Petitioner failed to show that the collapse of 1 TSN, 20 December 1988, pp. 10-12. the windmill was due solely to a fortuitous 2 Exh. "A" and Exh. "1." event. Interestingly, the evidence does not disclose that there was actually a typhoon on 3 Rollo, p. 36. the day the windmill collapsed. Petitioner 4 Id., p. 37. merely stated that there was a "strong wind." But a strong wind in this case cannot be 5 Kasilag v. Rodriguez, 69 Phil. 217 (1939). 6 Art. 1371, New Civil Code; GSIS v. Court of Appeals, G.R. No. 52478, 30 October 1986, 145 SCRA 311; Serrano v. Court of Appeals, No. L-46357, 9 October 1985, 139 SCRA 179. 7 TSN, 13 April 1989, pp. 18-19. 8 TSN, 13 April 1989, p. 22. 9 Art. 1240, New Civil Code. 10 Arts. 1236 and 1237, New Civil Code. 11 Nakpil v. Court of Appeals, Nos. L- 47851, L-47863, L-47896, 3 October 1986, 144 SCRA 596; National Power Corporation v. Court of Appeals, G.R. Nos. L-47379 and 47481, 16 May 1988, 161 SCRA 334; National Power Corporation v. Court of Appeals, G.R. Nos. 103442-45, 21 May 1993, 222 SCRA 415. 12 See Note 11. 13 Rollo, p. 44. 14 Sec. 3, par. (y), Rule 131, Revised Rules of Evidence. 15 Art. 1169, last par., New Civil Code. 16 See CA Decision, p. 7; Rollo, p. 27.