[ G.R. No. 11433. December 20, 1916 ] 35 Phil. 826
[ G.R. No. 11433. December 20, 1916 ]
ARTHUR F. ALLEN, PLAINTIFF AND APPELLANT, VS. THE PROVINCE OF ALBAY AND THE PROVINCE OF AMBOS CAMARINES, DEFENDANTS AND APPELLEES. D E C I S I O N
TRENT, J.:
On February 25, 1913, the Director of Public Works, acting for the Provinces of Albay and Ambos Camarines, advertised for sealed proposals, to be opened March 15, 1913, for the construction of a re-enforced concrete bridge over the Agus River on the Albay-Ambos Camarines boundary. At the request of the plaintiff, the opening of the bids was postponed until March 20, on which date plaintiff submitted his bid to construct the proposed bridge for the sum of P30,690. On April 25, 1913, the Director of Public Works asked the provincial boards of Albay and Ambos Camarines for authority to contract with the plaintiff for the construction of the bridge. The boards passed the necessary resolutions of May 6 and the plaintiff was notified of their action on June 13. The formal contract was duly executed on June 26, 1913. The bridge was completed and accepted by the defendant provinces on April 1, 1914. The plaintiff was paid the contract price less P1,301.45, P325 being retained as liquidated damages at the rate of P25 per day from February 15, 1914, to March 31, 1914; P175.03 for expenses of inspection from November 1, 1913, to February 15, 1914; and P201.42 for the operation and maintenance of a ferry across the Agus River during the last mentioned period. This action was instituted for the purpose of recovering the amount of P1,301.45, P200 overcharges on steel not delivered, P2,000 for damages caused by the defendants’ delay, and P878 for extra work and material furnished on the bridge at defendants’ request. From a judgment in favor of the defendants dismissing the complaint on the merits, with costs, the plaintiff appealed and now urges that the trial court erred (1) in finding that the delay in completing the work under the contract in question was due to the fault and negligence of the plaintiff and not to that of the defendants; (2) in holding that the defendants were entitled to deduct from the contract price for the construction of the bridge (a) the sum of P925 as a penalty or liquidated damages, (b) the amount of P201.42 for the operation and maintenance of a ferry, and (c) the amount of F175.03 for expenses of inspection; and (3) in rendering judgment in favor of the defendants, dismissing the plaintiff’s complaint and not rendering judgment for the plaintiff for the amounts prayed for. The first and second alleged errors will be considered together.
The contract which was, as we have said, duly executed on June 26, 1913, provided in paragraph 4 for the completion of the bridge on or before the 1st day of September, 1913. And in paragraph 5 it was agreed that in the event that the necessary steel should be furnished by the provinces at ship side in Legaspi, a deduction from the contract price should be made of 11 centavos per kilo of steel thus delivered. The advertisement, instructions to bidders, general conditions, specifications, proposal, and plans were made a part of the contract.
The plaintiff in his proposal stated:
“All work contemplated by this contract is to be completed on or before four months after contractor furnishes sand and gravel.”
The provincial board of Albay in its resolution of May 6 stated that it had received a communication from the Director of Public Works to the effect that “Mr. Allen’s bid was the only one received for this work which the contractor agrees to finish in four months.” The time for the commencement of the work is not stated. The provincial board of Ambos Camarines in its resolution of May 6 stated, “All work to be completed on or before November 1, 1913.” In “Information to bidders,” which was made a part of the contract, it was provided that “the contractor will be required to complete the bridge and have same ready for traffic on or before September 1, 1913.” The Province of Ambos Camarines in its resolution of January 6, 1914, stated that the time for the completion of the bridge was intended to be November 1,1913, and the Province of Albay in its resolution of May 5, 1914, stated that, “granting the contention of the provincial board of Ambos Camarines, it was the intention of the parties to fix the original date for the termination of the work on November 1, 1913, although the original contract fixed September 1, 1913, * * * .” On December 1, 1913, F. T. James, acting on behalf of the plaintiff, addressed the following letter to the provincial board of the Province of Albay:
“December 1, 1913.
“GENTLEMEN: I have the honor to request that an extension of time be granted me for the construction of the Argos River Bridge.
“Immediately upon entering into contract with the Province of Albay on June 26, 1913, I ordered cement for the work, but due to the shortage in the Manila market at that time did not receive delivery until the middle of July, when same was shipped to Legaspi where it arrived four days later.
“I had made previous arrangements to have this cement hauled to the bridge site by automobile truck, but when an attempt was made to do so in July, the recent rains so softened the road beyond Polangui that it was impossible to send a loaded truck over it with any assurance of safe arrival of the cargo of cement at Argos River in good condition. Therefore I was obliged to haul by truck to Ligao only and from there to Argos by carabao carts.
“The contractor in Ligao then began to haul cement and also the steel for the bridge. Shortly a quarantine on animals was put into effect in the town of Polangui, and the hauling had to stop, when I had had delivered at the bridge site only a few barrels of cement and a very small number of bars of steel for the piles. It was not until early in October, therefore, that sufficient steel and cement were delivered at the Argos River to warrant beginning work casting the piles. This work began however immediately this condition obtained and the sixty concrete piles were completed November 22.
“Due to the fact that the material in the Argos River, into which the piles must be driven, is exceptionally hard and of a very compact nature it is almost imperative that the piles have considerably more than the usual thirty days for ripening before driving, and of necessity I must wait at least until December 15 before handling even the first piles cast. My pile driver is being shipped to Nueve Caceres at present writing. I am obliged to send all my plant and balance of materials in by that port due to the fact that nobody in Albay is willing to attempt hauling heavy machinery over the road beyond Polangui for reasons best known to the honorable board, and it is only a question of hauling same from Nueva Caceres to Argos River as to the actual date of beginning driving.
“As was unforeseen, at the time of entering into contract for this bridge, I have been obliged to use two plants on my work in the Province of Bulacan where it was anticipated that one would be enough, due to the unusual conditions and delays from floods and typhoons, so I have not been able to ship my engine and driver so as to have it at Argos River on the date expected. Therefore, for these above-named reasons, I have the honor to request that I be granted an extension of time until February 15, 1914, to complete the Argos Bridge.
“Very respectfully.
“ARTHUR F. ALLEN, Contractor,
(Sgd.) “Per F. T. James.”
On May 5, 1914, the provincial board of the Province of Albay passed resolution No. 227, the pertinent parts of which are as follows:
* * * * * * *
“Whereas there exists pending a petition of the contractor for the extension of the termination of the work of the cited bridge until the 15th day of February, 1914;
* * * * * * *
“Resolved, That this board proposes an amicable settlement for the final settlement of this matter based upon the following conditions:
“Grant extension to February 15, 1914, providing the contractor will pay to the province the sum of P1,725.78, being the amount for extra cost for inspection expense, interest on loan, cost of ferry operation to February 15, and 37 days liquidated damages at P25 per day for the time between February 15 and April 1, 1914.
“Resolved further, That all previous resolutions of this board in regard to this matter which are in conflict hereof are hereby repealed.
“Resolved lastly, That copies of this resolution be furnished the district engineer, Albay, contractor Allen, provincial treasurer and provincial board of Ambos Camarines.”
On June 17, 1914, the provincial board of Albay passed resolution No. 383 which, after stating the reasons for the resolution, reads:
“Resolved, That the final payment to A. F. Allen for the construction of the Agus River Bridge be, and hereby is, authorized according to the contract, deducting the amount of Pl,301.45, same to cover inspection charges from November 1, 1913, to February 15, 1914, operation and maintenance of ferry from November 1, 1913, to February 15, 1914, and 37 days liquidated damages from February 15 to March 31, 1914, inclusive, Sundays and holidays excepted, at P25 per day.”
* * * * * * *
Copies of the above resolution were furnished the provincial treasurer and district engineer of Albay, the provincial board of Ambos Camarines, and the plaintiff.
The provincial board of Ambos Camarines, in its resolution No. 669 passed June 24, 1914, concurred in resolution No. 383 of the Province of Albay.
The provincial board of Ambos Camarines passed on January 6, 1914, resolution No. 50, the pertinent parts of which read as follows:
“The recorder presented copy of resolution No. 1114 of the provincial board of Albay, series of 1913, with accompanying papers, being the application of Mr. A. F. Allen for an extension of the contract time in which he is to complete the Agus Bridge (on the provincial boundary) and the recommendation of the Director of Public Works and the district engineer of Albay.
“Being informed of the contents of said resolution and accompanying papers,
“On motion,
“The board resolved as follows:
* * * * * * *
“(b) As to any further extension, the facts alleged by contractor which must be basis of same, obstacles impeding the transport of his supplies, occurring within the Province of Albay, this board proposes to be guided by the recommendations of the board of Albay in the matter. However, as it does not appear that the contractor acquiesces and accepts the extension and conditions embodied in the resolution of the board of Albay, but on the contrary, Mr. James, representing the contractor being present, informs the board of Camarines that the contractor is not satisfied with the extension and conditions embodied in the before mentioned resolution of Albay, therefore this board abstains from concurring in resolution No. 1114 of Albay and suggests that, if the Albay board finds cause for extending the contract time past November 1, 1913, that the contractor’s concurrence and acceptance of such further extension be procured before forwarding for the concurrence of this board. Further this board believes that any arbitrary extensions (contractor not concurring or accepting conditions) or extensions ‘by grace’ could better and more properly be had upon completion of the bridge as a final adjustment of the matter.
“Approved unanimously.”
Resolution No. 1114 of the provincial board of Albay, series 1913, referred to in resolution No. 50 of the provincial board of Ambos Camarines, was not presented during the trial in the court below and forms no part of the record of this case.
The provinces, exercising their right under the contract, furnished all the steel at shipside in Legaspi. The steel was received by the contractor on the following dates: 27,056 kilos on July 26, 1913; 3,636 kilos on August 4, 1913; and 7,890 kilos on September 1, 1913. The bridge site is 51.7 kilometers from Legaspi.
The first question to be determined is that relating to the time agreed upon for the completion of the bridge. Did the contracting parties fix September 1, 1913, as the date? On the one hand we have an explicit statement in the information to bidders that “the contractor shall commence the work herein contracted to be done in ample time to complete the contract within the time specified/1 In the contract it was expressly stipulated that the contractor must complete the work on or before the 1st day of September, 1913, or pay P25 a day as liquidated damages for every day thereafter. And James in his letter of December 1, after referring to the fact that the contract was signed on June 26, requested an extension of time for the completion of the work until February 15, 1914. While on the other hand, we have the statement of the plaintiff’s proposal to the effect that the work contemplated should be completed on or before four months after the contractor furnished gravel and sand; the statement of the provincial board of Albay that the contractor agreed to finish the bridge in four months; the same board’s later statement referring to the contention of the board of Ambos Camarines that it was the intention of the parties to fix the time on November 1, the two statements of the provincial board of Ambos Camarines to the effect that it understood that November 1 was the date agreed on; and the fact that the provinces deducted inspection expenses and expenses for the operation of the ferry from November 1.
It will thus be seen that the provinces did intend that the date for the completion of the work should be November 1 and not September 1. Such were the instructions to the Director of Public Works in consummating the contract, but the Director did not comply with these instructions as to the date for the termination of the work. He and the contractor agreed that the date should be September 1. Although this was not in accordance with the intention of the provinces, yet they (the provinces) subsequently ratified the contract by their own acts—furnishing the steel and making payments. The result is that the provinces obligated themselves through the Director of Public Works to furnish all the steel at ship side in Legaspi early enough to permit the contractor to complete the bridge by September 1. This the provinces did not do, as quite a large shipment of steel arrived in Legaspi on the very day agreed upon for the completion of the bridge. It may be true that the contractor could not have completed the bridge by September 1, if all of the steel had arrived in Legaspi immediately after the signing of the contract.
Even admitting that the true date for the completion of the bridge was November 1, yet the contractor could not have completed the work on or before that date on account of the quarantine established and enforced by the authorities. James, in his letter of December 1 asking for the extension of time, said, “The contractor in Ligao then began to haul the cement and also the steel for the bridge. Shortly a quarantine on animals was put into effect in the town of Polangui, and the hauling had to stop when I had had delivered at the bridge site only a few barrels of cement and a very small number of bars of steel for the piles.” And James in his testimony says, “Jaucian was unable to promptly deliver these materials at the Argus bridge site, due to a rinderpest quarantine placed, I think, by the Bureau of Agriculture on carabao and cattle passing on the interprovincial road between Ambos Camarines, Albay, and in all of the towns north of Ligao.” Jaucian in his deposition testified that he encountered difficulties in hauling materials for the bridge from Ligao to the Agus River; that the first difficulty was the quarantine placed upon animals in Polangui; that he had been delivering the materials for a week when the quarantine was ordered; that the quarantine, as he remembered, commenced in July and was removed in October or November; that the quarantine was uninterrupted during this time; and that it consisted in a definite or absolute prohibition against the passage of animals from kilometer 30 to kilometer 40. So it is conclusively established that the only way that the contractor had of moving the materials from Ligao to the bridge site was by means of animals and that this could not be done from sometime in July until October or November on account of the quarantine.
Marshall, the district engineer who represented the provinces during the construction of the bridge, testified that the plans called for the piles of the bridge to be 11 meters long; that the contract was signed on this basis; that after the contract had been signed Von Schmelling, the former district engineer, was down there and in a verbal conversation it was decided that instead of casting the piles 11 meters long they should be cast 9 meters long, thereby saving something like 13 cubic meters of concrete; that on October 11 or 12 there came a flood and the water rose about 15 centimeters higher than the extreme high water shown in the original plans; that it was thereafter agreed to raise the caps on the piles 42 centimeters higher; and that the raising of the bridge was outside of the original specifications. The testimony of this witness is corroborated on this point by both the plaintiff and James.
The plaintiff, through his agent, requested an extension of time until February 15, 1914, within which to complete the bridge, but the parties did not agree upon the extension. From the resolution of the provincial board of Ambos Camarines, dated January 6, 1914, it appears that Albay imposed certain conditions in consideration for the extension, which were rejected by the plaintiff.
We must, therefore, conclude that the provinces waived the contract time, whether it were September 1 or November 1, by their failure to deliver the steel promptly, by reason of having placed the strict quarantine on animals and on account of the change in the plans subsequent to October 12, and that the waiver operated to eliminate the definite date from which to assess liquidated damages; and though the plaintiff, in continuing the work, was obligated to complete the same within a reasonable time, the liquidated damage clause was not thereby restored and made applicable to an unreasonable time. Where strict performance on the part of the contractor is prevented or waived by the other party, a claim by such party of fines and penalties for delay or failure cannot be sustained. (District of Columbia vs. Camden Iron Works, 181 U. S., 453.) The same rule applies in cases containing liquidated damage clauses. (United Engineering and Contracting Co. vs. U. S., 47 Ct. Cls., 489 [1912].) If it be true that the plaintiff contractor was responsible for a large number of days of delay and the provinces for only a few of the days thereof, yet, under such circumstances, we cannot “apportion” such delay between the contracting parties and hold the contractor liable in liquidated damages for the number of days delayed by him in completing the bridge. (Jefferson Hotel Co. vs. Brumbaugh, 168 Fed. Rep., 867 and cases cited therein; Willis vs. Webster, 37 N. Y. Sup., 354; Mosler Safe Co. vs. Maiden Lane Safe Dep. Co., 199 N. Y., 479; 37 L. R. A., (N. S.) 363, decided in 1910.) The result is that the provinces are limited to such damages which they may have suffered on account of an unreasonable delay on the part of the plaintiff in completing the bridge, if there were, in fact, an unreasonable delay. It would seem, however, that as the plaintiff asked for an extension on December 1, sometime after the quarantine had been raised and also after the change in the plans had been made, until February 15, 1911, he should have finished the work on or before the latter date and all time thereafter would constitute an unreasonable delay. However this may be, the provinces have proven no actual damages resulting after February 15. It is true that they deducted P175.03 for inspection charges, but this was done for such inspection prior to February 15, and the same is true of the item of P201.42 for the maintenance of a ferry. Certainly there was no unreasonable delay prior to February 15. Consequently, the provinces had no right to withhold the P1,301.45.
The plaintiff sought to recover, in addition to the amount withheld, P200 overcharges on steel, P2,000 for damages caused by the defendants’ delay, and P878 for extra work and material furnished at defendants’ request. While it is true that the question whether the plaintiff is entitled to recover these amounts is raised by the third assignment of error, yet no specific reference is made in the plaintiff’s brief to said amounts, counsel saying nothing more than, “It is respectfully submitted that appellant is entitled to a reversal of the decision of the Court of First Instance, and to an order for judgment in accordance with the prayer of his complaint.” We have examined the record, however, and find that the evidence is not sufficient to warrant an affirmative holding that the plaintiff is entitled to recover these items or either of them.
For the foregoing reasons the judgment appealed from is reversed and judgment will be entered in favor of the plaintiff and against the defendants for the sum of P1,301.46, with legal interest from April 1, 1914. No costs will be allowed in this instance. So ordered.
Torres, Johnson, and Carson, JJ., concur. Araullo, J., concurs in the result. Moreland, J., see dissenting opinion.