G.R. No. 1490. April 02, 1904

On July 20, 1901, the appellants entered into a contract with the
appellees, under which the former were to build for the latter a
dwelling, on a certain lot in the city of Manila, according to a plan
and specifications made for this purpose for the sum of 13,000 Mexican
pesos, payment to be made in three installments—4,000 pesos when the
necessary material was on the land and the work was commenced; 4,000
pesos when the house was finished as to walls, roof, etc., and 5,000
pesos on the completion of the work, which was to be finished within
three months. In addition 500 pesos were to be paid for the
installation of the city water in stables, kitchen, baths, and water
closets, and the necessary drain pipes, and for the construction of a
stable in accordance with the specifications indicated, 1,500 Mexican
pesos, payable at the termination of the work, making a sum total of
15,000 Mexican pesos.

On the 20th day of June, 1901, plaintiffs contracted with the
defendants to fill a certain lot, on the bank of the Pasig River, with
earth and sand, at the rate of $1.30, Mexican currency, per cubic
meter, a copy of which contract is as follows:

Manila, P. I., June 20, 1901.

“We, Campbell & Go-Tauco, hereby agree to and
with Behn, Meyer & Co., city of Manila, upon their signed
acceptance to fill up a certain lot lying on the bank of the Pasig
River, next to Malacañan Palace, with suitable’ filling composed of
earth and sand of good quality, at the rate of $1.30, Mexican currency,
per cubic meter. Material will be measured in whatever way the said
Campbell & Go-Tauco, with the approval of Behn, Meyer & Co.,
deem most expedient; then spread evenly over the ground to bring the
lot to a certain level, which level will be determined by Behn, Meyer
& Co. Weekly payments to be made to Campbell & Go-Tauco by
Behn, Meyer & Co. The amount to be furnished will be over 15,000
cubic meters and delivered at the rate of 5,000 cubic meters monthly,
unless some unforeseen cause, as storms, etc., make it impossible.

“Accepted.

	“BEHN, MEYER & CO.
	“GO-TAUCO, O. F. CAMPBELL,
		“Contractors.”

The contract and specifications for the building of the house are
quite brief; and they, as well as the plans, show a lack of such
details as to work and materials as are
usually incorporated in contracts, plans, and specifications for
expensive buildings.

The specifications are as follows:

” Specifications to govern the construction of a
house of strong material on the lot on Malacañan Street, District of
San Miguel; owners, Behn, Meyer & Co.

“First The house shall be twenty-four yards in width, twenty yards deep, and seven and one-half yards high.

“Second.
The foundations shall be of ordinary Guadalupe stone and shall have a
depth of 1 m. by 1 m. with piers 1 m. by 0.60 m. The stonework of the
lower story shall be of the kind known as ordinary Guadalupe stone of
0.16 of a meter.

“Third. The uprights shall be constructed of
apitong, macasin, or amoguis wood 0.20 m. by 0.20 m, square. The
framework of the roof, the stringers, trusses, cross beams, hangers,
stays, and partitions shall be of apitong, macasin, or amoguis wood;
the stays shall be 0.12 m. by 0.07 m. square.

“Fourth.
The partitions of the upper floors shall be of boards made of the woods
above indicated, one-half inch in thickness; the flooring of the upper
story shall be of amoguis or tangili.

“Fifth. The windows
shall be of native shell. The doors of the rooms on the upper story and
of the apartments on the lower story shall be of macasin or apitong,
and the railing of the porch shall be of timber of the same class.

“Sixth.
The principal stairway shall be 1.40 m. wide, with a hand rail and
railings 0.05 by 0.05 m., and another stairway for the servants 0.05 m.
wide, constructed of timber of the second class.

“Seventh. The paint used on
the exterior of the building shall be oil paint and on the interior
water paint, with the exception of the doors, which are to be
varnished.”

The parties to the building contract agreed to have certain
alterations and additions made to the house, and these were made during
the progress of the work. The amount charged by the plaintiffs for the
materials and labor for these alterations and the extra work was 7,750
pesos, making the total cost of the structures and appurtenances the
sum of 22,750.62 pesos, of which sum the defendants paid to the
plaintiffs the sum of 13,500 pesos, leaving an unpaid balance claimed
by the plaintiffs of $9,250.62, Mexican currency, for which sum the
plaintiffs brought this action.

The defendants, in their answer, disputed their liability to pay a
sum of $2,333.12, Mexican, claimed by plaintiffs for alterations, extra
work, and labor; but at the trial they practically admitted that if
they failed in their defense that the plaintiffs constructed said
dwelling house in an unworkmanlike, careless, and negligent manner, the
plaintiffs would be entitled to judgment for the full amount claimed by
them for their work and materials, viz, 9,250.62 pesos.

In his decision of the case, the learned judge of the Court of First
Instance must have found that this extra sum claimed by plaintiffs was
proved, for he stated:

“I have concluded that an equitable adjustment of
this matter is to deny the plaintiffs any other compensation than they
have already received, because of their breach of contract in so
defectively constructing the improvements of the defendants, and that
the defendants are entitled to at least the unpaid balance as damages sustained by them on
account of the manner in which these improvements were constructed by the plaintiffs.”

The unpaid balance claimed by plaintiffs was $9,250.62, Mexican
currency. As the defendants neither objected nor took exception to this
finding of the court, it must stand as the amount which the court held
was offset by the failure of the plaintiffs to comply with their
building agreement.

The defendants not only claimed damages for this breach of the
building contract for the reason, “as they alleged, that the work was
not performed according to the contract, plans, and specifications,
but, by way of counterclaim, they also allege that plaintiffs
represented to the defendants that the amount of sand and earth used in
the filling of the lot was 62,690.50 cubic meters, and that the
defendants paid to the plaintiffs therefor, $81,497.65, Mexican
currency; that the amount of earth and sand actually deposited on said,
lot was 31,000 cubic meters, and that they had paid the plaintiffs for
31,690.50 cubic meters of sand or dirt which was not used to fill the
lot in question, amounting to the sum of $41,197.65, Mexican currency,
and prayed judgment for the sum of $71,197.65, Mexican currency, to
wit, $30,000 on their first counterclaim for the failure of plaintiffs
to comply with the building agreement and $41,197.65 on the second
counterclaim, with costs.

In their reply the plaintiffs allege that they had delivered on said
lot, for defendants, 64,444 cubic meters of earth and sand, for which
they are entitled to $83,777.20, Mexican currency, and that there is
due them thereon. $2,279.55.

In the decision of the court below it is said by the judge:

“I am further satisfied that the defendants paid
plaintiffs $1.30 per cubic meter for at least 40,000 cubic meters of
sand and dirt as filling for their lot that was not put thereon by
plaintiffs, which amounts in the aggregate to $52,000, Mexican
currency.”

And judgment was ordered “that the complaint be dismissed and that
the defendants recover of the plaintiffs the said sum of $52,000,
Mexican, and costs of this case.

Plaintiffs duly excepted, and made a motion for a new trial.

The house was finished early in May, 1902, and the defendants
accepted it by moving into it at that time. A careful reading of the
evidence in this case, and an examination of the plans and
specifications lead to the conclusion that there are defects in the
building in question. Among these are the following: The foundations
are not such as a first-class architect would recommend for a large
building, to be erected on soft and spongy ground; the pillars are not
placed on these foundations in such a way as to give the best support;
the wood is of an inferior kind or group. The house has settled; the
floor boards and others have shrunk and the floor of the veranda slopes
toward the house on all sides. In order, however, to hold the
plaintiffs liable for these defects of plans, specifications, and of
construction it must be shown that they were caused by the plaintiffs
and because of their defective workmanship.

During the progress of the work the defendants had two engineers on
the premises, Mr. Duff, who died, and Mr. Cook, who succeeded him,
whose duty it was to see to it that the work was done in a workmanlike
manner and according to the plans and specifications.

There is no evidence to show that the instructions of the engineer
who directed the work were, at any time, disregarded by the plaintiffs,
nor is there anything in the case showing that the engineer complained
of defective work. Moreover, it is practically conceded by all the
witnesses examined on this question that the wood and timber provided
for in the contract was of an inferior group or grade, such as warps
and shrinks.

The most serious defect in the house was caused by the settling of the pillars for lack of proper foundations.

The proof, however, shows that the foundations were built according
to the plans and specifications and that the pillars were placed as the
plans required them to be placed. The plaintiffs are not to be held in
damages for following these plans, especially when they were followed
under the eyes of the defendants’ engineer and without objection from
him.

In fact it was affirmatively shown in the case that Mr. Duff gave
orders regarding the changes of posts and made the modifications he
deemed necessary in regard to the foundations and posts; and Mr,
Dettmer, the manager of the defendants, testified that Mr. Duff, as
surveyor “had power to see that the building was properly carried out.”

The principal expert witness for the defendants testified that there
was a defect of construction, in that not all of the piers are under
the posts or pillars; that the pillars ought to rest on top of the
foundation; but when shown the plan of the building, which was approved
by the municipal authorities, he admitted, that according to these
plans, the pillars were to rest not on top of the foundations, but to
pass through the foundations and to rest in the ground; and that when
the builders placed a course of stone under the pillars in the middle
of the foundation, they improved on the plan and made the foundations
of the pillars stronger; nor did this witness say that the joints of
the pillars were insufficient. He said they could be improved by using
straps as well as bolts. There is nothing, however, in the plans or
specifications requiring such things.

Other defects mentioned by this witness are undoubtedly due to the
grade of lumber used, the same kind provided for in the contract and
specifications. The specifications, said this witness, provide for
timber of the third group. This grade of timber is lighter and more
spongy than the groups higher than the third. On account of being
spongy it shrinks during the heat. It can not be tightly adjusted so as
not to leave a space. It would be difficult to make a good joint with
this wood which would remain joined; it could be tight but it might
shrink and open and close again.

Surely the plaintiffs can not be held responsible for the defects of
the timber which they furnished, as provided for in their agreement,
and which was of the group and quality designated by the defendants.

From the evidence in this case it must be found as conclusions of fact:

(1) That in the construction of the building, the contract, plans,
and specifications have been complied with, with the exception, of a
variation to the advantage of the owner, which is that the principal
posts rest upon layers of stone instead of upon the ground,” as called
for by the plan.

(2) That if there has been any variation from the original plan,
this was done largely, if not wholly, with the consent of the owner,
and, at all events, with that of his agent, the inspecting engineer,
and that these changes have been improvements.

(3) That the house was constructed under a contract and
specifications which did little more than to designate the size of the
building, the material to be employed, and, with the plan, gave a
drawing of the building, leaving the details necessarily almost
completely to the direction of the inspecting architect or engineer.

(4) That the owner instrusted the direction of the work to an
inspecting engineer selected by himself, with full authority to
represent him, and that the contractor has performed the work wholly in
accordance with the direction of the said inspecting engineer.

(5) That although there is some evidence to indicate thai a part of
the house has settled a little more than other parts, this is due
either to the ground itself or to a defect in the plan, or to the
directions of the inspecting engineer, and can not be attributed to a
failure on the part of the contractor to comply with the conditions of
the contract.

(6) If there are any cracks in the floor and in the joints in the
building, this is due to the class of lumber which was selected by the
owner.

(7) That the plan of the work and the placing of the principal posts
were approved by the city engineer and were in conformity with the
ordinances.

(8) That the owner took possession of the house in the month of May,
1902, and has occupied it since that time as a dwelling house.

By the very fact of accepting the house and occupying it, the
defendants acknowledged that it was constructed substantially as
required by the contract, plans, and specifications; and this is the
law even when the work is not done according to the contract, but
accepted.

In case of a contract for furnishing materials and building a house
in a specific manner, if it be not done according to the contract, the
party for whom it is built may refuse to receive it and elect to take
no benefit from what has been performed. If he does receive it, he
shall be bound to pay the value—the reasonable worth of what he
receives. (6 New Hampshire, 481, 8.^[1])

Where the owner moves into the building contracted for, the rule of
substantial performance should be applied in an action by the
contractor. (Duell vs. McCraw, 86 Hun. N. Y., 331.^[1])

This being the law, the court below erred in adopting as a measure
of damages what it would cost to take this building down and to rebuild
it, estimating the cost of the materials and of necessary new
materials, and without proof of the actual costs of either.

This is not the rule or measure of damages adopted by the courts. (Kidd vs. McCormick, 83 N. Y., 391; Carland vs. New Orleans, 13 La. Ann., 43; Cullen vs. Sears, 112 Mass., 299.)

It follows that inasmuch as the plaintiffs complied with their
contract and constructed the house according to the plans and
specifications and under the directions of the defendants or their
authorized agents, they are entitled to recover therefor the unpaid
balance as found by the court below, viz, the sum of $9,250.62S Mexican
currency.

The claim for a recovery of the money paid by the defendants to the
plaintiffs for 31,690.50 cubic meters of sand and earth which it is
alleged were paid for but were not placed on the defendants’ lot, is
next to be considered.

The contract is undisputed, but the defendants claim that the total
amount of earth and sand paid for was not delivered, and that the money
was paid therefor under a mutual mistake of facts. The plaintiffs are
not charged with receiving this money by fraud or deceit, or with any
fraud or deceit in the measurement or delivery of the sand and earth.

The defendants paid for 62,690.50 cubic meters, and the plaintiffs
claim that they delivered to the defendants 64,444 cubic meters and ask
in their reply to the defendants’ answer for payment of 1,753.50 cubic
meters, not paid for, amounting to $2,279.55, Mexican currency.

The burden of the proof is on the defendants to show that they did
not receive the 62,690.50 cubic meters of sand and earth, and on the
plaintiffs to show that they delivered 1,753.50 cubic meters of sand
and earth, for which they were not paid.

Pursuant to their contract, the plaintiffs began to deliver the sand
and flli the lot on or about July 14, 1901, and continued to deliver
the same until April, 1902.

The sand was measured in bancas by the agent or servant selected and
paid by the defendants. Receipts for this sand were given daily to
plaintiffs and at the end of each week duplicate bills were rendered by
them to the defendants, which were O.K.’d by the manager of the
defendants’ firm and then paid.

The authorized representative of the defendants’ who gave the
receipts was on the ground constantly to receive this sand—in fact he
lived on the ground. The sand was taken from the river and was wet when
delivered.

The defendants kept a book account of all sand delivered. The
plaintiffs kept a man there to see to it that all the filling went on
and to take the receipts from defendants’ representative. One of the
representatives of the defendants who measured the sand was called as a
witness by the plaintiffs and testified that he measured the water line
of the bancas containing the sand. That the number of cubic meters of
sand were told by certain marks on both sides of each banca; and that
he was instructed by the manager of the defendants that it was not
necessary to measure the bancas. The defendants by their own books and
receipts, and as measured by their own agents or servants, showed that
they received and paid for 62,690.50 meters of sand and earth.

In order to disprove their own admissions and books, they called two
expert witnesses to show that this amount of sand and earth was not on
the lot in question at the time of the measurement by these
witnesses—presumably after September 6, 1902; for in the letter of the
defendants to the plaintiffs of that date the former do not appear to
have had the figures subsequently given by these witnesses—and many
months after the sand and earth was all delivered.

The defendants did not call as witnesses any of their own agents or
servants who measured this sand at the time of delivery, nor any of the
banca owners or managers to show the amount delivered.

The lot which was filled contained, according to defendants’ witnesses, a superficial area of 16,573.50 square meters.

It was, before it was filled, a rough piece of land, covered with
very deep ditches, in part a paddy field and in part a swamp where
people fished and watered their carabaos. The defendants’ experts made
a survey of this lot and an examination of the sand thereon, many
months after it was deposited, with a view of determining the amount of
sand originally deposited there by the plaintiffs. They measured the
area of the lot and sunk five or six holes down to what they called the
original soil, took the depth of the sand as shown by these holes, made
a general average allowing 15 per cent for settlement, and reached the
conclusion that there had been placed thereon a quantity of sand
amounting “approximately” to 20,965 cubic meters. These holes, it was
said, were distributed at intervals over the property, so as to enable
the witnesses to get an average “guess” at, or approximation of, the
amount delivered.

One of these experts stated that he did not see this zacate field
before it was filled up and that he did not know how many little ridges
there were or how many canals may have existed on the property.

We can not assume, in the absence of proof, that these witnesses
sunk holes in that part of this large lot where the deep ditches or
canals existed or where the swamp was. The correctness of the
conclusion reached by these experts depended to a great extent on the
depth of the holes sunk through the sand, and this depth depended on
whether or not they were sunk on the level part of the lot or in the
ditches or swamp.

The evidence, therefore, is uncertain, and does not enable us to
accurately determine the exact number of cubic feet of sand or earth
delivered on the lot; and this is especially true when the evidence
shows that the conclusions of the defendants’ experts are disputed by
two experts called by the plaintiffs, experts of larger experience than
those of the defendants and equally as competent to give opinions on
this question.

These experts called by the plaintiffs testified that the amount of
sand and earth mentioned as delivered and paid for could have been
delivered on this lot and yet shown no greater bulk than that which
appeared there when the defendants’ experts made their measurements,
provided, a greater percentage were allowed for settlement, and they
cited the works of eminent engineers to show that the allowance for
settlement should be from 31 to 38 per cent instead of 15 per cent.

In view of the fact that this filling was measured at so long a time
after it was placed on the lot; in view of the fact that the estimates
of these witnesses of the amount delivered is but an approximation or
‘”guess;” in view of the conflict of testimony regarding such amount,
and in view of the fact that the defendants, by their authorized
representatives, actually measured the sand and earth, at the time of
the delivery of each banca load, in the manner directed by the manager
of the defendant, we can not now say that this latter measurement is
all wrong and the new measurement all right; especially when there is
no proof that any fraud or deceit was practiced on the defendants in
the matter of measurements or in the keeping of the accounts thereof.

The learned judge who tried this case seems to have been of the
opinion that because the contract states that the amount of sand to be
delivered shall be “over 15,000 cubic meters,” therefore it was a
conclusive corroboration of his finding that not more than 21,000 cubic
meters of filling was placed on the lot.

If only about 15,000 cubic meters were intended, why did not the
defendants stop the delivery when they knew that 15,000 cubic meters
had been delivered?

After the amount had gone beyond that mark, why were not the
defendants put upon inquiry? Why, if they suspected anything wrong in
the measurement, did they not make an investigation?

Delivery of filling began early in July, 1901, and down to October
20 of that year the amount delivered exceeded 16,000 cubic meters
according to the defendants’ own record. Why, then, if only about
15,000 cubic meters, or even 21,000 cubic meters, were sufficient to
fill the lot, did the defendants let the filling go on during the
remainder of October, the whole of November and December, 1901, and
January and February, and down to the latter part of March, 1902, and
this without a word of complaint from the defendants during its
progress, and not a word afterwards until plaintiffs began to press
defendants for their unpaid balance on the house contract?

It is not unusual to allow a plaintiff to recover money paid to a defendant through a mutual mistake of fact. That was the case of Whedon vs.
Olds (20 Wendell N. Y., 174), cited by the defendants’ counsel. There
the parties guessed at the quantity of oats in a store house and
payment was made on the basis of this guess. Afterwards the oats were
actually and accurately measured and the plaintiff recovered the excess
of payment on the principle that there had been a mutual mistake in the
amount guessed. There could be and was no doubt in that case as to
amount actually delivered, because it was measured. In the case at bar
this process has evidently been reversed by the court below. The
parties first actually measured the sand and earth and the amount was
paid for according to actual measurement; but now the defendants, by
their experts, have guessed that they did not receive as much as the
defendants’ former measurement shows, and they want a return of money
on the ground that the guess is more reliable than the measurement. The
plaintiffs deny that there was any mistake, mutual or otherwise, in
this former measurement; and so this Whedon case does not sustain the
contention of the defendants. Nor does the case of Whitcomb vs.
Williams (4 Pick. Mass., 228) sustain the contention of the defendants.
In that case one of the parties, for years, had been buying rum of the
other party, and had been paying for the same oh the belief that the
cask in which it was measured contained 121 gallons, whereas it turned
out, after payments had been made, that the cask contained only 114
gallons. Here was a mutual mistake, a mistake which could not be
denied. Here was accurate measurement of the actual amount of rum
delivered and, of course, the plaintiff was entitled to recover the
excess of his payments. But the case at bar is entirely different. No
fraud or deceit is proved and no mutual mistake is shown by
unmistakable evidence.

This case in the absence of evidence of a mutual mistake is governed
by the doctrine of estoppel. The defendants measured the sand, they
receipted for it, and they paid for it. They can not now say they did
not receive it. It comes within the principles laid down in Austin vs.
Wauful (36 N. Y., St. Rep., 779; 13 N. Y., 184), where it was held that
a receipt given by the plaintiff in that case for the property in
question estopped him from denying that he had the property when the
action was brought.

In Behring vs. Somerville (44 Atl. Rep., 641) it was held
that the fact that both parties had equal means of information, and
money was paid upon a mistake of fact, it can not, in the absence of
fraud, be recovered back, the money being that of the payee.

It follows that the defendants are not entitled to recover from the
plaintiffs the said sum of $52,000, Mexican currency, allowed by the
court below.

As we do not find that the plaintiffs have satisfactorily proved the
delivery of the additional sand and earth for which they claim
$12,279.50, Mexican currency, that claim is disallowed.

The judgment of the Court of First Instance is reversed and judgment
ordered for the plaintiffs for the sum of $9,250.62, Mexican currency,
with costs of both instances.

Arellano, C. J., Torres, Willard, Mapa, and Johnson, JJ., concur.

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^[1] Britton vs. Turner.

^[1] 26 Am. Dec., 713.

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COOPER, J.

I conform to the reversal of the judgment, but the case should be remanded to the Court of First Instance for a new trial.