Arenas v. Court of Appeals
REITERATIONFacts
1. The Antecedents: The underlying dispute concerns the professional fees owed to an architect, Guido M. Cruz, by Ramon and Rosemarie Arenas for the design and supervision of their house construction. Cruz claims 10% of the project cost for regular architectural services (plans, specifications, supervision) and an additional 10% for project administration, based on the National Code of Architects Services and Fees. The Arenas, however, contend that Cruz's services were to be capped at P30,000.00 and that his work was inadequate, leading them to hire other professionals and incur additional expenses. They maintain they have already overpaid Cruz for the minimal services rendered. 2. Procedural History: The architect, Guido M. Cruz, filed a case against the Arenas for the unpaid balance of his professional fees. The former Court of First Instance of Manila ruled in favor of Cruz, ordering the Arenas to pay P90,000.00 as the balance of his professional fees, plus interest, P20,000.00 in moral damages, P10,000.00 in attorney's fees, and costs. The Arenas appealed this decision to the Court of Appeals. The Court of Appeals affirmed the trial court's decision with modification, eliminating the award for moral damages but otherwise upholding the judgment. The Arenas then filed a motion for reconsideration, which was denied, leading to the present petition for certiorari before the Supreme Court. 3. The Petition: The petitioners, Ramon and Rosemarie Arenas, seek reversal of the Court of Appeals' decision through a petition for certiorari. They argue that the respondent court erred in its factual findings regarding the extent and quality of the architect's services and the final cost of the house. The petitioners specifically challenge the basis for calculating the architect's fees, contesting the P500,000.00 project cost used by the lower courts, which was derived in part from the Arenas' own payments to other professionals. They also contest the award of attorney's fees, arguing it is inconsistent with the elimination of moral damages and the general policy against penalizing the right to litigate.
Issue(s)
Whether the Court of Appeals erred in affirming the award of P90,000.00 as the balance of private respondent's professional fees. Whether the Court of Appeals erred in affirming the award of P10,000.00 as attorney's fees.
Ruling
The decision of the Court of Appeals is affirmed in all other respects, with the elimination of the award for attorney's fees.
Ratio Decidendi
On the award of P90,000.00 as balance of professional fees: The Court affirmed the finding that private respondent rendered architectural services, including the preparation of multiple sets of plans accommodating changes requested by petitioner Rosemarie Arenas, and supervised and administered the construction until completion. The evidence, including the testimony of petitioners' own witnesses and petitioner Rosemarie Arenas' admission of substantial payments to other professionals (Roberto Cericos and Lorenzo Calma) for similar services, supported private respondent's claim that the project cost was at least P500,000.00. The Court found that the P48,000.00 cited by petitioners was for labor costs, not professional fees. Applying the agreed-upon rates from the National Code of Architects Services and Fees, the balance due was P90,000.00. The Court also clarified that Article 1724 of the Civil Code, concerning contractors, is inapplicable to architects claiming professional fees. On the award of P10,000.00 as attorney's fees: The Court modified the decision by eliminating the award for attorney's fees. It reasoned that since the award for moral damages was removed by the Court of Appeals due to a finding of no bad faith on the part of the petitioners, the award for attorney's fees, which is often consequential to bad faith or vexatious litigation, should also be removed. The Court reiterated its policy against penalizing the right to litigate and emphasized that attorney's fees are not awarded merely because a party wins a suit.
Main Doctrine
The professional fees of an architect, as stipulated in their agreement and governed by the National Code of Architects Services and Fees, are based on the project cost, including services for preparation of plans, specifications, supervision, and administration. Changes in plans and specifications authorized in writing by the proprietor may warrant adjustments in price, but Article 1724 of the Civil Code, concerning contractors, does not apply to claims for professional fees by architects.