G.R. No. 162608 ; July 26, 2010
ADRIAN WILSON INTERNATIONAL ASSOCIATES, INC., Petitioner, vs. TMX PHILIPPINES, INC., Respondent.

FACTS

Petitioner Adrian Wilson International Associates, Inc. (AWIA) was engaged by respondent TMX Philippines, Inc. (TMX) to provide architectural and engineering services for the construction of a watch assembly plant in Cebu. The agreement included construction administration duties to guard against defects. After construction completion in 1980, TMX discovered significant cracks and beam deflections in the roof structure five years later. AWIA attributed the defects to construction errors by the contractor, specifically poor concrete pouring during rainfall, as noted in a 1979 site report. TMX, however, obtained opinions from other firms which concluded the defects stemmed from AWIA’s design errors in load calculations.
TMX undertook corrective measures, installing 118 steel lally columns and temporarily halting operations from December 1-18, 1985, during which it paid its employees on forced leave. It then sued AWIA for damages, seeking reimbursement for the shoring expenses (₱2,385,499.00) and employee salaries (₱1,546,084.00) paid during the work stoppage. The Regional Trial Court found AWIA partly liable but reduced the shoring expenses on a pro-rata basis, finding only 11 columns necessary, and denied the claim for employee salaries, ruling they were not a direct consequence of the design defect.

ISSUE

Whether the Court of Appeals erred in affirming AWIA’s liability and in awarding TMX the full amount of salaries paid to its employees during the corrective work period as actual damages.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. On the issue of actual damages for employee salaries, the Court upheld the award. The legal logic is anchored on the principle of adequate compensation for proven pecuniary loss under Article 2199 of the Civil Code. TMX adequately demonstrated through payroll records that it paid its employees during the forced shutdown necessitated by the urgent corrective construction. This expense was a direct and natural consequence of the structural defects caused by AWIA’s design deficiencies. The Court rejected AWIA’s argument that the salaries were not recoverable, ruling that the temporary closure was a reasonable and necessary measure to address the safety hazards, making the wage payments a foreseeable result of the breach. The amount was sufficiently proven with specificity, thus qualifying as actual damages. The modification by the Court of Appeals, ordering AWIA to pay the ₱1,546,084.00 for salaries, was therefore correct, as the claimant is entitled to compensation commensurate with the loss duly proven to have been suffered.