G.R. No. 117190 . January 2, 1997.
JACINTO TANGUILIG doing business under the name and style J.M.T. ENGINEERING AND GENERAL MERCHANDISING, petitioner, vs. COURT OF APPEALS and VICENTE HERCE JR., respondents.

FACTS

Petitioner Jacinto Tanguilig agreed to construct a windmill system for respondent Vicente Herce Jr. for P60,000.00, with a one-year guaranty from completion and acceptance. Respondent paid P45,000.00, leaving a P15,000.00 balance. Petitioner sued to collect this balance. Respondent defended by claiming he paid the P15,000.00 to San Pedro General Merchandising Inc. (SPGMI), which constructed the deep well, asserting it was part of the system. Alternatively, he argued the balance should be offset due to defects, as the windmill collapsed after a strong wind.
Petitioner denied the deep well was included in the P60,000.00 contract, stating the price covered only the windmill assembly and installation. He also disowned liability for the collapse, attributing it to a typhoon, a force majeure event, and insisted the system was delivered and accepted in good condition.

ISSUE

1. Whether the contract to construct the windmill system included the installation of a deep well.
2. Whether petitioner is obligated to reconstruct the windmill after its collapse.

RULING

The Supreme Court reversed the Court of Appeals on the first issue but sustained it on the second. On the first issue, the Court held the deep well installation was not included. The contract must be interpreted from its clear terms. The two letter-proposals, particularly the accepted one dated May 22, 1987, described the windmill as suitable “for” a deep-well pump but did not itemize or include the construction of a deep well itself. The words “deep well” merely described the type of pump the windmill would operate, not an obligation to construct the well. The contract price covered only the specifically enumerated features. Therefore, respondent’s payment to SPGMI did not extinguish his P15,000.00 balance owed to petitioner.
On the second issue, the Court upheld the appellate court, ruling petitioner was liable to reconstruct the windmill under the one-year guaranty. The collapse was not due to force majeure. A “strong wind” is foreseeable where windmills are built and is necessary for their operation; it cannot be considered a fortuitous event that excuses liability. The new structure’s failure indicated an inherent defect, a breach of the guaranty. In reciprocal obligations, respondent was not in delay for non-payment because petitioner first failed to comply by delivering a defective system. Under Article 1167 of the Civil Code, petitioner must execute the reconstruction at his own cost.
The Court modified the decision: Respondent Herce must pay petitioner the P15,000.00 balance with legal interest. Petitioner Tanguilig must reconstruct the defective windmill system within three months under the one-year guaranty.