G.R. No. 219352 - Anacta, Jr. vs. Sandiganbayan, 5th Division

Petitioner spouses Ngo Sin Sing and Ticia Dy Ngo owned a lot located at 745 Caballero St., Binondo.
They decided in 1978 to construct a 5-storey concrete building known as the NSS Building on the said property.

For the construction project, the petitioners engaged Contech Construction Technology Development Corporation as their General Contractor.
The construction included excavation work on the petitioner’s lot, which was in close proximity to an adjacent property.

The adjacent property housed the Li Seng Giap Building (LSG Building), owned by Li Seng Giap & Sons, Inc.
During the NSS Building’s construction, tenants of the LSG Building reported multiple defects such as cracks on floors, bent steel doors, and falling apart concrete slabs on walls.
An inspection revealed that excavation near the common boundary of the two properties had exposed the foundation of the LSG Building.

As a gesture of goodwill, the petitioners assured the respondent that repairs would be carried out by Contech.
In December 1979, Contech declared that repairs on the LSG Building had been completed.
Despite these repairs, additional defects appeared in the LSG Building including tilted floors, cracks in columns and beams, and distorted window frames, rendering the building unsafe.

In 1981, the respondent, through Control Builders Corporation, engaged engineers E.S. de Castro Ph.D. and Associates to investigate the defects.
The engineers’ investigation revealed differential settlement of the LSG Building due to the excavation work on the petitioner’s lot.
They concluded that the degree of settlement exceeded safe tolerable limits and recommended the complete demolition and reconstruction of the building, estimating the cost at about P8,021,687.00.

The respondents demanded that the petitioners either rebuild the LSG Building or pay for its demolition and reconstruction.
A complaint for a sum of money was subsequently filed at the Regional Trial Court (RTC) of Manila, docketed as Civil Case No. 83-19367, including claims for:

Demolition and reconstruction cost (P8,021,687.00).
Payment for the services of E.S. de Castro, Ph.D. and Associates and Control Builders Corporation (P154,800.00).
Loss of income from rental during reconstruction (P543,672.00).
Attorney’s fees (P10,000.00).

The LSG Building had been structurally unstable since its inception, originally constructed in 1966 without assured stability through proper foundations to account for differential settlement.
The structural defects were also attributable to external forces (e.g., earthquakes and improper maintenance) rather than solely to the petitioner’s excavation.

A cross-claim was filed by the petitioners against Contech alleging that the construction contract provided that all claims from third parties should be met by the contractor.
Contech, in its defense, maintained that its excavation was performed with an adequate distance (approximately eight inches) from the common boundary and that proper precautions, including the installation of wood sheet piles, were taken.

The RTC found the defendants negligent for conducting excavation too near the common boundary and failing to properly secure lateral and subjacent support.
The trial court also noted that the LSG Building’s structural issues were aggravated by the respondent’s unauthorized addition of two extra floors without adequate foundation reinforcement.
Balancing the faults, the RTC held that the petitioners should share in the responsibility for the defects.
The trial court rendered judgment ordering the petitioners and Contech jointly and severally liable to pay the respondent P4,010,843.50, with the claim for additional damages dismissed.
Contech was further directed to reimburse the petitioners for any amount they might pay to the respondent.

Dissatisfied with the RTC ruling, both the respondent and the petitioners filed separate appeals, while Contech chose not to challenge the decision.
The CA, in its decision dated May 11, 2005, modified the trial court’s judgment by holding the petitioners and Contech jointly and severally liable for the full sum of P8,021,687.00, applying Article 2194 of the Civil Code.
The CA refuted the assignment of contributory negligence against the respondent and included an award for attorney’s fees.
On appeal to the Supreme Court, the petitioners raised three main assignments of error regarding:

Ignoring evidence that showed respondent’s own negligence contributed to the damage.
Imputing liability on petitioners despite the lack of proven negligence against them.
Awarding attorney’s fees without proper basis.

The trial court’s factual findings were more reliable given its direct contact with the witnesses and evidence.
Contech’s failure to provide sufficient lateral and subjacent support was the proximate cause of the damages.
The principles of joint tortfeasor liability and quasi-delict were applicable in determining the parties’ respective responsibilities.

Whether the petitioners (as property owners) and Contech (as the general contractor) should be held jointly and severally liable for the damages sustained by the LSG Building.
Whether the excavation carried out on the petitioner’s property without appropriate lateral and subjacent support was the proximate cause of the differential settlement affecting the adjacent building.

Whether the structural defects of the LSG Building were due to pre-existing negligent conditions or improper modifications (e.g., the addition of extra floors without proper foundation reinforcement) by the respondent.
Whether the negligence of the LSG Building’s owner should reduce or alter the liability attributed to the petitioners and Contech.

Whether the CA erred in affirming and modifying the trial court’s decision by imposing joint and several liability on the petitioners and Contech.
Whether the award of attorney’s fees to the respondent was legally justified given the evidence and applicable law.

Whether the application of Article 2194 of the Civil Code on joint tortfeasor liability, as well as the doctrine of quasi-delict under Article 2176, is appropriate in this case.
Whether the doctrine of supervening negligence should mitigate the liability of any party involved.