G.R. No. 56524 - Arenas vs. Court of Appeals

In January 1970, the petitioners, Ramon Arenas and Rosemarie J. Arenas, engaged the services of the respondent, a professional architect, to design their residential house located at No. 2056 Lumbang, Dasmarinas Village, Makati, Metro Manila.
The parties agreed that the respondent would prepare architectural plans, specifications, and a bill of materials, as well as supervise and administer the construction of the house.
The agreed compensation was tied to the provisions of the National Code of Architects Services and Fees in the Philippines, which stipulated:

A fee of 10% of the project cost for regular services (supervision, preparation of plans and specifications).
An additional 10% of the project cost for project administration services.

The respondent prepared multiple sets of architectural plans and accompanying documents:

An initial architectural plan (Exhibit A and A-1).
Plans secured for municipal approval through the Makati authorities and the Dasmarinas Village Association (Exhibits B, B-1, and B-2).
Revised plans incorporating alterations requested by petitioner Rosemarie Arenas.
Final plans and a bill of materials that were approved and utilized in the construction (Exhibits C, C-1 to C-5, and F).
Additional plans, including a pre-cast plan and an air-conditioning system plan (Exhibits E, E-1 and E-2).

The construction of the house, despite some chronological discrepancies in the record, is established as having commenced (noted as March 1980 in the record but contextualized by other dates) and finished approximately in June 1971.
The respondent also coordinated and procured the services of an interior decorator, Lorenzo L. Calma, who submitted and had his interior decoration plan accepted by Mrs. Arenas on June 30, 1970.
Upon completion, the respondent secured the necessary occupancy permit from the municipal government of Makati and documented the finished construction through photographs.
Payment Status:

The petitioners initially paid the respondent P10,000.00 for his professional services.
The respondent demanded an additional P100,000.00 based on the National Code of Architects Services and Fees, arguing that the cost of the house had risen to at least P500,000.00 and that his services, including detailed plan preparations and extensive supervision, warranted the fee as calculated by a percentage of the final project cost.

The respondent had offered his services for a fixed compensation not exceeding P30,000.00.
The contract, drafted on March 24, 1970, set out that every detail of the architectural plan must be approved by the petitioners and that the project should be completed within 180 working days.
The respondent’s initial submission of the architectural plan was incomplete, lacking specifications and a bill of materials; thus, they hired other architects to remedy the alleged deficiencies—resulting in additional expenses.
For the limited services rendered, they had already paid a total of P10,000.00 (plus P48,000.00 for labor costs) and argued that this amount was sufficient compensation.

The respondent’s evidence, including multiple exhibits and the testimony of both his own witness and admissions by petitioner Rosemarie Arenas, established that:

He had indeed prepared the plans, specifications, and bill of materials that were actually used.
His supervision extended to major aspects of construction such as material purchases and securing the occupancy permit.

A key stipulation from the pre-trial order noted that a schedule of fees approved by the Philippine Institute of Architects governed the claim for professional fees.

The trial court ordered the petitioners, jointly and severally, to pay the respondent:

P90,000.00 as the balance of his professional fees, plus interest from July 1, 1971, at the rate of 12% per annum until full payment.
P20,000.00 as moral damages.
P10,000.00 as attorney’s fees.
The costs of suit.

On appeal, the Court of Appeals affirmed the trial court’s decision with modifications by eliminating the award for moral damages.

Whether the respondent was entitled to claim his professional fees based on the National Code of Architects Services and Fees despite the petitioners’ contention of an alternative fixed fee agreement.

The dispute centered on the proper application of the fee schedule (10% for regular services plus 10% for project administration) versus the allegedly fixed compensation of not more than P30,000.00.

The legitimacy of computing the respondent’s professional fees based on an increased project cost (exceeding P500,000.00) rather than the original estimated cost (P290,550.00).

The issue arose from repeated amendments and expansions of the original plans that allegedly increased the cost of construction.

Whether the evidence sufficiently established that the respondent rendered the comprehensive architectural and administrative services claimed.

This includes the preparation of multiple sets of plans, specifications, bill of materials, supervision, and other documentary proof corroborated by the petitioners’ own witness and admissions.

The significance of the non-production of any contradictory evidence (i.e., plans or specifications prepared by another architect) by the petitioners in refuting the respondent's claim.

Whether the absence of such evidence should be considered conclusive in determining the authenticity and extent of the respondent’s work.

Whether the award of moral damages and attorney’s fees was appropriate under the circumstances, particularly in light of the respondent’s conduct and the absence of bad faith on the part of the petitioners.