G.R. No. 159279 ; July 11, 2006
GUEVENT INDUSTRIAL DEVELOPMENT CORPORATION, petitioner, vs. PHILIPPINE LEXUS AMUSEMENT CORPORATION, respondent.

FACTS

Respondent Philippine Lexus Amusement Corporation leased petitioner Guevent Industrial Development Corporation’s warehouse for storing video machines. On September 25, 1994, heavy rains flooded the area, damaging the machines. Respondent, relying on a report from its commissioned adjuster, United Adjustment Company (UAC), claimed the flooding was caused by clogged drainage pipes within petitioner’s private road and demanded damages. Petitioner refused, contending the flood resulted from the clogged public drainage system of Mandaluyong City and that respondent was contractually obligated to insure the machines against such risks.
The Regional Trial Court (RTC) dismissed the complaint, ruling petitioner was not negligent. It found petitioner regularly maintained its private drainage and had repeatedly requested the city to clean the public sewers. The RTC held the flooding was a fortuitous event. The Court of Appeals reversed, giving credence to the UAC report and finding the clogging of petitioner’s internal drainage caused the flood, thus holding petitioner liable.

ISSUE

The core issues are whether the flooding was due to a fortuitous event or petitioner’s negligence, and whether petitioner is liable for damages.

RULING

The Supreme Court granted the petition and reinstated the RTC decision, absolving petitioner from liability. The Court, exercising its power to review factual findings when appellate and trial court conclusions conflict, found the Court of Appeals erred in relying on the UAC report. The report lacked explanation of its methodology and UAC’s qualifications, and it was not an impartial investigation as it was commissioned by the respondent.
Conversely, petitioner presented credible evidence, including daily maintenance reports and barangay certifications, proving it regularly declogged its private drainage and that the area was perennially flooded due to the defective public drainage system. Petitioner also demonstrated persistent requests to the city government for sewer rehabilitation. The Court thus concluded the primary cause of the flooding was the poor condition of the public drainage, not petitioner’s private pipes.
Legally, a lessor’s obligation to maintain the premises in tenantable condition does not extend to maintaining public infrastructure, which is an impossible obligation. Since petitioner was not negligent in maintaining its own drainage and the flood was primarily due to an external public cause beyond its control, it cannot be held liable for damages. The failure of respondent to insure the machines as stipulated was noted but was not determinative of petitioner’s liability, which was found non-existent.