GR 174387; DEC 9, 2015

BF CORPORATION, petitioner, v. WERDENBERG INTERNATIONAL CORPORATION, respondent.

Negligence
Facts: Petitioner and respondent entered into a Construction Agreement, under which petitioner would
construct for respondent a three-story building housing a meat processing plant and a showroom office in
Yakal Street, Makati City. The parties agreed on a contract price of P43,800.000.00 and a completion and
delivery date of Aprill 7, 1995. Due to several delays, however, petitioner turned over the building only on
August 15, 1995. Respondent did not accept the building asserting it had many deficiencies. Respondent
paid petitioner only P38,088,445.00. Thus, petitioner filed a complaint for sum of money against
respondent before the Pasig RTC for the balance of P4.771,221.59. In addition, petitioner prayed for the
payment of P141,944.93 representing expenses incurred due to work on respondent’s changes or
additional orders, and for a judgment that the liquidated damages claimed by respondent in the amount of
P3,066,000.00 was without basis

Issue: Whether or not petitioner is entitled to the payment of the construction as stated in Construction
Agreement

Held: The Court ruled in the negative. On trial, the court found several reasons why the construction did
not proceed as planned - necessary permits, unforeseen land conditions and poor workmanship caused
the delay. However, the Court did not attribute these causes solely to the petitioner. It held that both
parties were responsible for the delay caused by the excavation and earthworks. Thus even if petitioner
may be held liable for negligence in the performance of its obligation, Art. 1172 of the Civil Code provides
that such liability may be regulated by the courts according to the circumstances of the case. In the case
at bar, the extra soft conditions of the land was beyond the petitioner’s control. Since these caused an
unforesseen delay in the excavation stage, petitioner should be credited accordingly.

For this reason, the Court extended the delivery date of the building. However, the Court also
acknowledged the poor workmanship of petitioner due to the poor quality of the paint. Thus, the Court
deducted from petitioner’s entitlement the amount shouldered by respondent in re-painting the building.
Also, the Court ruled that respondent is entitled to a 10% retention fee.

The Court then calculated that the petitioner is entitled only P2,767,290.768 balance from respondent.