PHILIPPINE NATIONAL BANK vs. SHELLINK PLANNERS, INC.

PHILIPPINE NATIONAL BANK vs. SHELLINK PLANNERS, INC.

G.R. No. 154428 - October 20, 2005

FACTS:

On May 1990, petitioner Philippine National Bank (PNB) engaged respondent Shellink Planners, Inc. (SPI), an architectural consultancy company, to render furniture/movables designs (FMD) and consultancy services for Phase IA of the PNB Complex in Pasay City. Respondent immediately commenced the preparation of the FMD designs, upon receiving verbal notice to proceed from the PNB President Edgardo Espiritu. In previous projects, it was the practice of both petitioner and respondent, to commence with the project even before the documentation of the contract agreement.

On September 26, 1991, respondent submitted to petitioner the formal proposal for the project as a cost of Php.5,663,150.75. The Furniture/Movables Works (FMW) consultancy services included: (a) FMD, (b) Periodic Fabrication/Assembly Supervision (PFAS), and (c) FMW Monitoring. Petitioner, in turn, made a counter offer of Php.2,348,844.39 for the project.

Finding the amount insufficient, respondent made a revised offer, viz: (a) scale down the PFAS and FMW monitoring services, or (b) to perform full services as originally proposed at the adjusted compensation package of Php.4,473,999.03 only.

Since on agreement was reached, respondent, through its General Manager, Armando N. Alli, sent petitioner a letter on July 8, 1994, demanding the payment of Php.1,152,730.29, representing rendered FMD services for Phase IA for the period of 1990-1991.

On April 24, 1995, the respondent, thru its counsel, sent another letter to the PBN Senior Vice President and Banking Center Building Committee (BCBC) Chairman Lucas R. Vidad, demanding payment of said amount, Php.1,152,730.29. In response, Mr. Vidad assured respondent in a letter dated May 9, 1995, that petitioner was willing to pay, although he would recommend the BCBC, a settlement of Php.864,547.71 only, arrived at by adopting a “billing factor/multiplier” of 1.5, instead of 2.0, as used by respondent.

On January 11, 1996, respondent filed a Complaint for Collection of Sum of Money and Damages, demanding the reimbursement of Php.1,152,730.29 representing the actual expenses in the FMD plans for Phase IA of the PNB Complex Project.            

On August 24, 1998, the regional trial court rendered its decision allowing recovery by respondent based on quantum meruit. The Court of Appeals affirmed the decision on July 26, 2002. Dissatisfied with the ruling, herein petitioner filed the instant petition for review on certiorari of a decision of the Court of Appeals.

ISSUE:

Whether or not respondent is entitled to payment for services rendered on the basis of quantum meruit.

RULING:

Yes.

The facts show that a perfected oral contract exists between petitioner and respondent for the FMD. A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render service. It is perfected by mere consent. From that moment, the parties are bound not only to the fulfilment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. It is obligatory, in whatever form it may have been entered into, provided all the essential requites for its validity is present.

As found by the lower court, the FMD was prepared pursuant to the verbal notice to proceed given in May 1990 to then SPI President Nestor David by former PNB President Edgardo Espiritu.

The actual fabrication of the Furniture/Movables is entirely different from the design preparation. Respondent evidently incurred the expenses in the preparation of the FMD drawings that were transmitted to, and acknowledged by petitioner. It is of no moment that the said designs were not utilized further for petitioner’s material benefit.