Ngo Sin Sing vs. Li Seng Giap & Sons, Inc.

The responsibility of two or more persons for a quasi-delict is solidary under Article 2194 of the Civil Code, but a judgment may determine the primary and secondary liability between joint tortfeasors, such that the party without proven negligence may be absolved of ultimate liability and the negligent party held solely responsible for the damages. A building owner who adds floors to an existing structure without reinforcing its foundation is guilty of contributory negligence, warranting a reduction of the damages award.

Petitioner spouses Ngo Sin Sing and Ticia Dy Ngo owned a lot at 745 Caballero St., Binondo, adjacent to the semi-concrete Li Seng Giap Building owned by respondent Li Seng Giap & Sons, Inc. In 1978, the petitioners contracted the services of Contech Construction Technology Development Corporation as their General Contractor for the construction of a 5-storey concrete building, the NSS Building, on their lot. The respondent's building had a history of structural modifications, having been originally constructed as a 2-storey building and later expanded to four storeys. Article 684 of the New Civil Code, which provides that no proprietor shall make such excavation upon his land as to deprive any adjacent land or building of sufficient lateral or subjacent support, and Article 2176 on quasi-delicts, together with Article 2194 on solidary liability, formed the legal backdrop for the dispute.

Petitioner spouses Ngo Sin Sing and Ticia Dy Ngo owned a lot at 745 Caballero St., Binondo, where they decided in 1978 to construct a 5-storey concrete building, the NSS Building, contracting the services of Contech Construction Technology Development Corporation as their General Contractor. Adjacent to their lot stood the semi-concrete Li Seng Giap Building, owned by Li Seng Giap & Sons, Inc. During the construction of the NSS Building, the respondent, through its general manager John T. Lee, received complaints from tenants about defects in the building: cracks appearing on the floors, a bent steel door, and concrete slabs of the walls falling apart. An inspection revealed that the excavation made by Contech on the petitioners' land was close to the common boundary, exposing the foundation of the LSG Building. As a gesture of goodwill, the petitioners assured the respondent that repairs would be undertaken by their contractor, and in December 1979, Contech announced that it had completed repairs on the LSG Building. Notwithstanding this assurance, more defects appeared — tilted floors, cracks in the columns and beams, and distorted window frames — and the respondent felt the building was no longer safe to occupy.

In 1981, the respondent consulted engineers E.S. de Castro Ph.D. and Associates, through Control Builders Corporation, to investigate the cause of the damages. The consultants concluded that the structural failure of the LSG Building resulted from differential settlement caused by the excavation during the construction of the NSS Building, and recommended the complete demolition of the building, estimated to cost about ₱8,021,687.00. The respondent demanded that the petitioners rebuild the LSG Building or pay the cost, which the petitioners refused, leading to the filing of a complaint for sum of money against the petitioners and Contech.

The evidence revealed that the LSG Building had a complex construction history. The building permit dated June 27, 1956 was for a 3-storey building, but this was amended on August 20, 1956 to a 2-storey building only. In 1966, the building was burned, and thereafter it was rebuilt with two floors added to the original 2-storey building. John T. Lee admitted on cross-examination that the 3rd and 4th storeys were built on the skeleton of the ground and 2nd floor which was burned, and that the foundation which was good to support only two floors remained the same and could not support the weight of the present 4-storey building. Edgardo Soriano, Civil Engineer from the Office of the City Engineers Manila, testified that there was a great possibility that the settlement may be progressive, and that the damages may be due to the defect in the foundation and not due to the excavation. The report of E.S. de Castro itself suggested that the 3rd and 4th floors be removed and use of the ground and second floors be retained, indicating that the additional floors could have overburdened the foundation's load-bearing capacity.

The trial court found that the defendants were negligent, as the excavation was near the common boundary and soil erosion would not have taken place if wood sheet piles were properly put in place along the common boundary. However, the trial court also found the plaintiff guilty of contributory negligence for adding two more floors without providing the necessary foundation and reinforcement, causing the building to sag. The trial court allocated the damages on a 50-50 ratio, ordering the defendants jointly and severally liable to pay ₱4,010,843.50. The Court of Appeals reversed the finding of contributory negligence and held the spouses and Contech solidarily liable for the whole amount of ₱8,021,687.00 with interest and attorney's fees. The petitioners appealed to the Supreme Court, arguing that no negligence was imputed against them, that the respondent's own negligence was the proximate cause of the damage, and that the award of attorney's fees was baseless.

• Contributory Negligence of Respondent: Petitioners argued that the Court of Appeals committed grave reversible error in disregarding clear evidence on record that respondent LSG's own negligence was the proximate cause of the damage to its building, or at least amounted to contributory negligence warranting reduction of the award.
• Lack of Negligence on Petitioners' Part: Petitioners averred that there was no basis for holding them jointly and severally liable with Contech for the payment of damages, as no act or omission constituting negligence had been successfully imputed against them, and as owner of the property, it was their right to construct on their land and have it excavated.
• Contractual Provision on Third-Party Claims: Petitioners maintained that they had a contract with Contech wherein it was provided that all claims of third persons would be answered by the company, and that they should be released and relieved of any and all liabilities and responsibilities for third-party liabilities.
• Attorney's Fees: Petitioners argued that the Court of Appeals ordered them to pay attorney's fees in the amount of ten percent of the principal amount without any legal and factual basis.

• No Contributory Negligence: Respondent disagreed with the trial court's finding that it was guilty of contributory negligence, claiming that the LSG Building never exhibited any sign of structural distress from the time it was completely constructed in 1968, despite several earthquakes in Manila, and that the defects were experienced only when excavation and construction of the NSS Building started.
• Right to Property Invaded: Respondent reiterated its prayer in the complaint, claiming that its right to property was invaded or disturbed when excavation was done without sufficient lateral or subjacent support, and that the petitioners' liability as project owner should be shared with the contractor under Article 2194 of the Civil Code.

• Contributory Negligence: Whether the respondent was guilty of contributory negligence for adding floors to its building without reinforcing its foundation, warranting a reduction of the damages award.
• Solidary Liability of Petitioners: Whether the petitioners could be held jointly and severally liable with Contech for the damage caused by the excavation when no negligence was imputed against them.
• Determination of Ultimate Liability: Whether the Court could determine the primary and secondary liability between the petitioners and Contech as joint tortfeasors in the same judgment.
• Attorney's Fees: Whether the award of attorney's fees in the Court of Appeals decision was proper.

• Contributory Negligence: Yes. The respondent was guilty of contributory negligence for adding two floors to its building without reinforcing its foundation, and the award of damages was properly reduced on a 50-50 ratio, as the trial court had correctly ruled.
• Solidary Liability of Petitioners: Yes, but only as joint tortfeasors. Under Article 2194 of the Civil Code, the responsibility of two or more persons for a quasi-delict is solidary, and the petitioners and Contech were jointly liable as joint tortfeasors for the damage caused to the respondent.
• Determination of Ultimate Liability: Yes. A judgment may determine the ultimate rights of the parties on the same side as between themselves, such that questions of primary and secondary liability between joint tortfeasors may be determined, and since there was no proffered evidence of negligence on the part of the petitioners, Contech was ultimately liable and should answer for the cost of the damage.
• Attorney's Fees: No. The award of attorney's fees in the Court of Appeals decision was deleted, as the appellate court did not provide any basis whatsoever to justify the award.

• Contributory Negligence: The Supreme Court noted that in petitions for review, it does not normally review the factual findings of the courts below, but when the findings of the CA differ from those of the trial court, the Court will not hesitate to scrutinize the evidence on record. The trial court is in a better position to ascertain the facts of the case considering its peculiar opportunity to be in direct contact with the witnesses and the evidence presented. The records revealed that the LSG Building was constructed as early as 1956, originally as a 2-storey building, and in 1966, after being burned, it was rebuilt with two floors added to the original 2-storey building. John T. Lee admitted that the 3rd and 4th storeys were built on the skeleton of the ground and 2nd floor which was burned, and that the foundation which was good to support only two floors remained the same. The report of E.S. de Castro suggested that the 3rd and 4th floors be removed, showing that the additional floors could have overburdened the foundation's load-bearing capacity and contributed to the sagging of the building. Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has suffered, which falls below the standard to which he is required to conform for his own protection. Considering that respondent's negligence must have necessarily contributed to the sagging of the LSG Building, a reduction of the award was warranted, and the trial court's 50-50 allocation of damages was more in keeping with justice and equity.

• Solidary Liability of Petitioners: The requisites of quasi-delict under Article 2176 of the New Civil Code were attendant in the instant case: (a) there must be an act or omission; (b) such act or omission causes damage to another; (c) such act or omission is caused by fault or negligence; and (d) there is no pre-existing contractual relation between the parties. The tortious act was the excavation done without observing the proper safeguards. Although the trial court stated that the petitioner as land owner had every right to excavate on his own land, such right is not absolute as to deprive the adjacent owner of sufficient lateral support pursuant to Article 684 of the New Civil Code. The lower courts found that there was insufficient lateral or subjacent support provided on the adjoining lot when excavation was done on petitioners' land, and while there were wood sheet piles placed along the sides of the excavation, they were not properly braced to prevent a failure wedge. For the damage caused to the respondent, petitioners and Contech were jointly liable as they are joint tortfeasors, conformably with Article 2194, the responsibility of two or more persons who are liable for the quasi-delict is solidary. The Court cited Lafarge Cement Philippines, Inc. vs. Continental Cement Corporation for the principle that obligations arising from tort are, by their nature, always solidary, and that joint tortfeasors are jointly and severally liable for the tort which they commit.

• Determination of Ultimate Liability: The Court found basis to re-examine the disposition as to the liability of the petitioner in light of the judgment rendered holding the petitioner and Contech jointly and severally liable and giving the right to the petitioner to be reimbursed. Citing Citytrust Banking Corporation vs. Court of Appeals, the Court stated that a judgment may determine the ultimate rights of the parties on the same side as between themselves, such that questions of primary and secondary liability between joint tortfeasors may be determined. Rather than invite the definite prospect of the petitioners filing an action later on seeking reimbursement from the party primarily liable, which in this case is Contech, it would be more in keeping with the principles of expediency and the policy against multiplicity of suits to make a direct adjudication in this regard. Considering that there was no proffered evidence of negligence on the part of the petitioners, the inescapable conclusion was that Contech was ultimately liable and should answer for the cost of the damage. The facts showed that Contech's negligence was the proximate cause of the damage, as construction is a field requiring technical expertise, and the petitioners, as ordinary laymen, would understandably have no knowledge at all about the technical aspect of constructing a building. The petitioners had every right to rely on the warranties and representations of their contractor. The Court also noted that Contech remained silent, as if accepting its fate of liability, and did not present evidence to controvert the parties' assertions, and the decision holding it liable had become final and executory. The trial court also pointed out that Contech fell short of its responsibility as contractor by failing to insure its work against possible risks, such as acquiring a Contractor All Risk (CAR) insurance policy and/or Erection All Risk (EAR) insurance policy.

• Attorney's Fees: The award for attorney's fees in the CA decision was deleted, as the appellate court did not provide any basis whatsoever to justify the award.

• Quasi-Delict (Article 2176, Civil Code) — Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. The requisites are: (a) there must be an act or omission; (b) such act or omission causes damage to another; (c) such act or omission is caused by fault or negligence; and (d) there is no pre-existing contractual relation between the parties. All requisites were attendant in this case, the tortious act being the excavation done without observing proper safeguards.

• Solidary Liability of Joint Tortfeasors (Article 2194, Civil Code) — The responsibility of two or more persons for a quasi-delict is solidary. Obligations arising from tort are, by their nature, always solidary, and each joint tortfeasor is not only individually liable for the tort in which he participates, but is also jointly liable with his co-tortfeasors. Joint tortfeasors are not liable pro rata; the damages cannot be apportioned among them, except among themselves.

• Contributory Negligence — Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has suffered, which falls below the standard to which he is required to conform for his own protection. Where the injured party's negligence contributed to the damage, a reduction of the award is warranted.

• Determination of Primary and Secondary Liability Between Joint Tortfeasors — A judgment may determine the ultimate rights of the parties on the same side as between themselves, such that questions of primary and secondary liability between joint tortfeasors may be determined. This permits the determination of the entire controversy in a single action, avoiding multiplicity of suits.

• Lateral and Subjacent Support (Article 684, Civil Code) — No proprietor shall make such excavation upon his land as to deprive any adjacent land or building of sufficient lateral or subjacent support. While a landowner has every right to excavate on his own land, such right is not absolute as to deprive the adjacent owner of sufficient lateral support.

• "Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has suffered, which falls below the standard to which he is required to conform for his own protection." — This passage defines the doctrine of contributory negligence applied by the Court to reduce the respondent's damages award, citing Valenzuela v. Court of Appeals.

• "To be adding additional floors to the original 2-storey of plaintiff's building and depending merely on the skeleton of the ground and second floors for its third and fourth floors without touching or reinforcing that building's bottom line or foundation are already manifestive of some negligence or ignorance on the part of said building owner (plaintiff)." — This quotation from the trial court, adopted by the Supreme Court, establishes the basis for the finding of contributory negligence on the part of the respondent.

• "No proprietor shall make such excavation upon his land as to deprive any adjacent land or building of sufficient lateral or subjacent support." — This provision of Article 684 of the New Civil Code was the controlling rule for determining that the excavation, though conducted on the petitioners' own land, was tortious because it deprived the adjacent building of sufficient lateral support.

• "In order to avoid a multiplicity of suits, and to place it in the power of the defendant to get a determination of an entire controversy in a single action, statutory provision is made whereby, if the rights of the defendants as between themselves are determinable in an action, the whole matter may be disposed of in the judgment of such action, instead of leaving the defendants to litigate independently after the judgment has been entered in the main action." — This passage from Weiner v. Mager & Throne, Inc., et al. supports the Court's authority to determine the primary and secondary liability between the petitioners and Contech in the same judgment.

• Lafarge Cement Philippines, Inc. vs. Continental Cement Corporation, G.R. No. 155173, November 23, 2004, 443 SCRA 522 — Cited as controlling authority for the principle that obligations arising from tort are, by their nature, always solidary, and that joint tortfeasors are jointly and severally liable for the tort which they commit, each liable as principals to the same extent as if they had performed the wrongful act themselves.

• Worcester vs. Ocampo, 1912 — Cited within Lafarge for the universal doctrine that each joint tortfeasor is not only individually liable for the tort in which he participates, but is also jointly liable with his co-tortfeasors.

• Citytrust Banking Corporation vs. Court of Appeals, G.R. No. 92592, April 30, 1991, 196 SCRA 553 — Cited as authority for the rule that a judgment may determine the ultimate rights of the parties on the same side as between themselves, such that questions of primary and secondary liability between joint tortfeasors may be determined.

• Weiner vs. Mager & Throne, Inc., et al., 167 Misc. 338, 3 N.Y.S.2d 918 — Cited as authority for the principle that to avoid multiplicity of suits, the whole matter may be disposed of in the judgment of the action, instead of leaving the defendants to litigate independently after judgment has been entered in the main action.

• Valenzuela vs. Court of Appeals, 323 Phil. 374, 388 (1996) — Cited as authority for the definition of contributory negligence as conduct on the part of the injured party contributing as a legal cause to the harm suffered.

• Chan, Jr. vs. Iglesia ni Cristo, Inc., G.R. No. 160283, October 14, 2005, 473 SCRA 177 — Cited as authority for the requisites of quasi-delict under Article 2176 of the Civil Code.

• Article 2176, Civil Code — Provides that whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done, and such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict. Applied to hold the petitioners and Contech liable for the damage caused by the negligent excavation.

• Article 2194, Civil Code — Provides that the responsibility of two or more persons for a quasi-delict is solidary. Applied to hold the petitioners and Contech jointly and severally liable as joint tortfeasors for the damage to the respondent's building.

• Article 684, Civil Code — Provides that no proprietor shall make such excavation upon his land as to deprive any adjacent land or building of sufficient lateral or subjacent support. Applied to establish that the petitioners' right to excavate on their own land was not absolute and that the excavation without proper safeguards was tortious.

• Consuelo Ynares-Santiago (Chairperson)
• Ma. Alicia Austria-Martinez
• Minita V. Chico-Nazario
• Ruben T. Reyes