Case Digest (A.M. No. 06-9-545-RTC)
Facts:
In Noell Whessoe, Inc. v. Independent Testing Consultants, Inc., et al. (G.R. No. 199851, November 7, 2018), Independent Testing Consultants, Inc. (“ITCI”) was engaged in June 1998 by Petrotech Systems, Inc. (“Petrotech”), itself a subcontractor of Liquigaz Philippines Corporation (“Liquigaz”), to perform non-destructive testing on Liquigaz’s piping and storage tanks in Mariveles, Bataan. ITCI issued invoices totaling ₱1,063,465.70 but Petrotech refused payment. On December 1, 1998, ITCI filed a complaint for collection of sum of money with damages against Petrotech, Liquigaz, and Noell Whessoe, Inc. (“Noell Whessoe”), alleging that Noell Whessoe was the main contractor for Liquigaz and solidarily liable with Liquigaz and Petrotech. Liquigaz denied contractual privity with ITCI, while Noell Whessoe contended it was only a construction manager separate from the actual contractor, Whessoe UK, and thus not bound by ITCI’s claim. Petrotech defaulted; the Regional Trial Court (RTC) rCase Digest (A.M. No. 06-9-545-RTC)
Facts:
- Contractual Framework
- Owner and Main Contractor
- On November 7, 1996, Liquigaz Philippines Corporation (“Liquigaz”) and Whessoe Projects Limited (“Whessoe UK”) executed the Contract Agreement for the Mariveles Terminal Expansion Project.
- Whessoe UK, in turn, on November 29, 1997, engaged Noell Whessoe Philippines Construction, Inc. (“Noell Whessoe”) under a Conditions of Contract for Supply of Professional, Technical and Management Services to act as construction manager.
- Subcontracts and Confidentiality
- On May 12, 1997, Whessoe UK subcontracted pipework and mechanical installation to Petrotech Systems, Inc. (“Petrotech”).
- A Confidentiality Agreement dated April 12, 1997 was executed between Petrotech and Noell Whessoe, referring to Noell Whessoe as a “wholly owned subsidiary” of Whessoe UK.
- Engagement of Independent Testing and Dispute
- Sub-subcontract for Testing
- In June 1998, Petrotech, as subcontractor of Liquigaz via Whessoe UK/Noell Whessoe, engaged Independent Testing Consultants, Inc. (“Independent Testing”) to perform non-destructive testing (NDT) on Liquigaz’s gas piping and storage tanks.
- Independent Testing completed the work and issued two invoices totaling ₱1,063,465.70.
- Non-payment and Collection Suit
- Petrotech refused payment despite formal demands.
- Independent Testing filed a complaint for collection of sum of money with damages against Petrotech, Liquigaz, and Noell Whessoe before RTC Branch 161, Pasig.
- Judicial Proceedings
- Regional Trial Court Decision (March 7, 2005)
- Liquigaz and Noell Whessoe argued lack of privity; Petrotech defaulted.
- RTC held Liquigaz, Noell Whessoe, and Petrotech solidarily liable for ₱1,063,465.70 plus legal interest, attorney’s fees (25% of claim), and costs.
- Court of Appeals Decision (April 28, 2011) and Resolution (December 7, 2011)
- CA affirmed with modifications:
- Noell Whessoe and Petrotech to pay full claim jointly and severally;
- Liquigaz’s liability limited to US$9,000 (or peso equivalent) with right of reimbursement from Petrotech;
- Cross-claim in favor of Noell Whessoe against Petrotech granted;
- Attorney’s fees deleted; costs of suit affirmed.
- M/R denied.
- Petition for Review on Certiorari
- Noell Whessoe petitioned to overturn its solidarity liability, asserting lack of direct contract with Independent Testing and separate corporate identity from Whessoe UK.
- It also claimed entitlement to moral damages for reputational harm.
Issues:
- Whether Noell Whessoe, Inc. can be held solidarily liable with Liquigaz Philippines Corporation and Petrotech Systems, Inc. for unpaid fees of Independent Testing Consultants, Inc., despite no direct contractual privity.
- Whether Noell Whessoe, Inc. is entitled to moral damages for alleged tarnishing of its business reputation.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)