THE PHILIPPINE AMERICAN LIFE INSURANCE COMPANY, PETITIONER, VS. HONORATO R. SANTAMARIA AND COURT OF APPEALS (FIRST DIVISION), RESPONDENTS.

This petition for the review of a decision of respondent Court of
Appeals, arising allegedly from its failure to apply the Civil Code provision
requiring a contractor to “execute the
work in such a manner that it has the qualities agreed upon” and is free from
“defects which destroy or lessen its value, or fitness” for its use,
whether ordinary or stipulated,^[1] was given due course as the question raised
on a novel provision of the
Civil Code^[2] has not hitherto been passed upon.  Petitioner, The Philippine American Life
Insurance Co., imputing negligence and incompetence to
respondent Honorato R. Santamaria,
the contractor for a topographic survey work, as a result of which it suffered
damages, would hold him liable.  It
prevailed in the lower court, but on appeal, it lost in the Court of Appeals,
the decision now on review having diligently and meticulously sifted the
competent facts to arrive at the conclusion that far from respondent Santamaria being guilty of negligence or incompetence, he
did live up strictly to the terms of the contract.  Thus it reversed the judgment of the lower
court and dismissed the complaint.  Hence
this petition for review.

It is an admitted fact that in a letter dated September 3, 1952
to petitioner, respondent Santamaria submitted a
written proposal to conduct both a topographic and a subdivision survey of
petitioner’s 45 hectare lot in Quezon City, the
topographic survey at the rate of P80.00 per hectare of the area surveyed and
mapped and the subdivision survey at the rate of P28.00 for the first 400 lots
and P25.00 for each succeeding lot thereafter. 
There was an acceptance by petitioner of such proposal limited to the
topographic survey only.  On September 23, 1952, respondent Santamaria sought to clarify the terms of such topographic
survey by him by stating that it would be “in accordance with a 10-meter
cross-sectioning and profile survey and a contour interval of 25
centimeters.” He also obligated himself to furnish a map at scale 1 to 100
upon the completion of the survey.  Petitioner was agreeable.^[3]
The decision of respondent Court of Appeals then continued with the facts as
found thus: “The topographic survey work on the property of plaintiff was
done by the defendant during the period from October 3 to November 15, 1952.  Thereafter, defendant submitted to the
plaintiff the result of his survey topographic map, Exhibit 1, for which
plaintiff paid him the agreed sum of P3,600.00 as his fees.”^[4]

Why petitioner, as plaintiff in the original action, felt it was entitled to damages was noted in
such decision thus: “Plaintiff, in seeking to recover damages from the
defendant, claims that it incurred additional expenses caused by the resurvey of the property, the additional
grading work done in the new road lay-out, the changes in the designs of the
buildings and residential houses to be constructed as prepared for the project
by architect Arguelles and the change in the shopping center area which became
smaller due to the fact that the actual area of the project is less than what appeared
in the topographic map.  It also seeks to
recover losses it sustained as a consequence of the delay in the progress of
the project work caused, according to the plaintiff, by the fault of defendant in the preparation of the topographic map,
Exhibit I.”^[5]

Respondent’s defense was next taken up by respondent Court of
Appeals in its decision. “For his defense, the defendant contends in the
first place that under his contract with the plaintiff, he is not required to
prepare a plan which shows the exact boundaries of the project nor the exact
measurement of said boundaries.  He also
contends that before preparing the topographic map he called the attention of
Mr. A. G. Capellan, representative of the plaintiff as well as architect Nakpil, architect Arguelles and representative of the Monina Construction Company of the fact that there was then
no plan indicating the exact measurement of the lot which he was to survey
topographically and that he was informed that he should proceed even without a
survey plan because time was then of the essence and that whatever
discrepancies may arise as a result of the absence of such horizontal survey
could be remedied later.  Defendant
further contends that inasmuch as a topographic survey could be prepared on a
property even without indicating definitely its metes and bounds, he proceeded
with the topographic survey and submitted the result of his work, topographic
map Exhibit I.  From the foregoing
contentions of the defendant he disclaims any liability for losses arising from
the discrepancy above referred to.”^[6]

What respondent Santamaria was obliged
to do under its contract with petitioner was next discussed in the decision:
“To our mind, the correct interpretation of the extent of appellant’s duty
under the contract contained in Exhibit
C is found in the very same exhibit. 
It should be noted that in his letter, Exhibit C, defendant offered to
make two surveys: (1) a topographic and (2) a subdivision survey of a 45
hectare housing project for the plaintiff. 
In his description of the job
for the proposed ‘subdivision survey’, defendant stated among others that he
would relocate all the boundary monuments of the project area.”^[7]

The considerations that led the Court of Appeals to reject contention of petitioner were set forth in
detail in its decision: “Plaintiff accepted the offer only in so far as
the topographic survey is concerned, thereby rejecting the offer of defendant
to make a subdivision survey.  Inasmuch
as the work of relocating all boundary monuments is included in the rejected
offer to make a subdivision survey, defendant
was justified in not determining the boundary of the project area in his
topographic survey.  Moreover,
considering the period during which the topographic survey was to be done
pursuant to the offer of the defendant as accepted by the plaintiff, it was
impossible for the defendant to determine the exact boundary of the project
area of 45-hectare because when plaintiff accepted defendant’s offer plaintiff
has not yet definitely decided to purchase the 45-hectare site from the
Philippine Homesite and Housing Corporation
(PHHC).  It was only on October 15, 1952 that an agreement
entitled ‘Sale Agreement’ (Exh. A), that the
plaintiff and the PHHC entered into a contract. 
It should be noted that under the offer of the defendant contained in
Exhibit C as accepted by the plaintiff dated September 23, 1952, field work and
drafting had to commence three days after the signing of the contract and the
resulting topographic map should be submitted to the plaintiff within a period
of 18 working days with additional extension for every day of rain.  It is admitted that defendant started work on
his topographic map on October 3, 1952
twelve days before plaintiff signed the sales agreement with the PHHC.”^[8]

With the foregoing circumstances in mind, the Court of Appeals
yielded its conformity to the stand taken by respondent Santamaria.  Thus: “We agree with the contention of
the appellant as deduced from his testimony and that of his witness Mr. Jorge
that when a topographic map which is not linearly plotted and whose boundaries
are consequently not accurate is used in sketching the road lay-out and other
parts of the subdivision scheme, such procedure would be improper unless the
sketch is intended to be merely a preliminary lay-out subject to final
adjustment after a fixed boundary survey has been made.  On this point, we note with interest the
disquisition about city planning contained in appellee’s
brief (pp. 12-13).  There can be no
question about the correct­ness of the stand and the soundness of the reasoning
that in planning a scheme for a new
housing project, there should be not only a topographic survey of the entire project area but also
an accurate planimetric survey of the same
indicating the exact boundaries thereof. 
“^[9]

Its conclusion, now subject of this petition for review was thus
a necessary consequence: “In view of all the foregoing considerations, we
rule that defendant has not been at fault nor remiss in the performance of his
duty to prepare the topographic map, Exhibit 1, pursuant to his contract with
the plaintiff.  Consequently the decision
declaring him liable in damages to the plaintiff should be reversed.”^[10]

Thus, with the utmost care and conscientious effort in the
scrutiny of the proven facts, respondent Court of Appeals specifically held
that respondent Santamaria was neither “at fault
nor remiss in the performance of his duty to prepare the topographic map,
Exhibit I, pursuant to his contract with the plaintiff.” With such a
finding based, as above noted, on the most meticulous appraisal of the
respective contentions of the parties in accordance with their proof, it would
necessarily follow that the lower court decision that would hold respondent Santamaria liable in damages could not stand.  Hence, its reversal by respondent Court of
Appeals.  It must have been a realization on the part of petitioner of
the difficult task it had to face, this Court being bound on questions of fact
by the determination of the Court of Appeals, that must have prompted it to
invoke what for it is the correct interpretation of Art. 1715 of the Civil
Code.

As set forth at the outset, this novel question was the decisive
factor in giving this petition due course. 
Even if the matter be viewed most favorably from the standpoint of
petitioner, it would be unjustifiable, on the facts as duly proved, to decide
the matter contrary to the conclusion reached by respondent Court of
Appeals.  Petitioner would have us
construe the obligation of the contractor to execute the work in such a manner
that it had the qualities agreed upon and was free from defects which destroyed
or lessened its value or fitness as well-nigh absolute.  It would impose the duty on the party thus
bound to perform such work to attain, in each and every case, a degree of
perfectibility on pain of being visited with a liability for damages.  That is to misread Art. 1715.  It is to give it an interpretation at war
with the demands of reason.  It might
have been otherwise if the work agreed upon to be performed consisted of
machinery, which must be constructed according to specification, otherwise it
would not serve the purpose contemplated. 
Such is not the case, however.  As
Justice Holmes noted, there is no such principle “against using common
sense in construing laws.”^[11]

Petitioner, however, appears to be of a different mind.  Ignoring the vital circumstance that
precluded respondent Santamaria’s work from being as
satisfactory as was hoped for, for which it could not escape responsibility as it
rejected his offer to conduct both a topographic and a subdivision survey, it
would interpret this codal provision without any
thought of the canons of fairness.  It
would stretch its meaning in an unwarranted manner.  No legal norm should be susceptible to such a
reproach.  If the facts were other than
that so carefully considered in detail by respondent Court of Appeals, then
perhaps this contention of petitioner, which, at bottom, is the basis of the three alleged errors
committed by respondent Court of Appeals, would not be so lacking in any
persuasive quality.  This Court, no less
than petitioner, must, however, pay heed to such facts duly established.  Our supervisory power, as petitioner could
not be unaware, is thus necessarily limited. 
In the application of the law, we cannot ignore what had been
ascertained by the Court of Appeals as to the manner an obligation was
fulfilled.

The alleged negligence or incompetence on which this action was
based by petitioner in its complaint in the lower court was found not to exist
by respondent Court of Appeals. 
Respondent Santamaria was not at fault; he was
not remiss in the performance of his duty. 
He lived up to the terms of the contract as agreed upon between him and
petitioner.  It cannot be said, then,
that he did incur liability.  It would
follow, thus, that the reliance on this legal norm by petitioner does not call
for the judgment of the Court of Appeals being set aside as being contrary to
law.

WHEREFORE, the decision of respondent Court of Appeals of September 28, 1966 is affirmed.  With costs against petitioner, The Philippine
American Life Insurance Company.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Ruiz Castro, Teehankee, Barredo, and Villamor, JJ., concur.

^[1]
Art. 1715 of the Civil Code provides in full: “The contractor shall
execute the work in such a manner that it has the qualities agreed upon and has
no defects which destroy or lessen its value or fitness for its ordinary or
stipu­lated use. Should the work be not of such quality, the employer may
require that the contractor remove the defect or execute another work. If the
contractor fails or refuses to comply with this obligation, the employer may
have the defect removed or another work executed, at the contractor’s
cost.”

^[2]
The source is the German Civil Code as noted in the Report of the Code
Commission, p. 147 (1948).

^[3]
Court of Appeals Decision, Appendix A
of Brief for Petitioner.

^[4]
Ibid, p. XII.

^[5]
Ibid, p. XIV.

^[6]
Ibid, pp. XIV-XV.

^[7]
Ibid, p. XVII.

^[8]
Ibid, pp. XVII-XVIII.

^[9]
Ibid, pp. XX-XXI.

^[10]
Ibid, p. XXII.

^[11]
Roschen v. Ward, 279 US 337 (1929).