G.R. No. 86540-41 - Mantruste Systems, Inc. vs. Court of Appeals

On October 1, 1994, petitioner Hyatt Elevators and Escalators Corporation entered into an “Agreement to Service Elevators” with respondent Cathedral Heights Building Complex Association, Inc.
Under the Service Agreement, petitioner was responsible for the maintenance of four passenger elevators in respondent’s building, including monthly inspection, adjustment, and lubrication of machinery, motors, control parts, and accessory equipment.
A specific provision in the Service Agreement (Section D(2)) provided that respondent was liable for additional expenses incurred in connection with repairs and the supply of spare parts not expressly covered under regular maintenance.

During the period from April 1997 to July 1998, petitioner claimed to have incurred expenses amounting to Php 1,161,933.47 for elevator repairs and the purchase of spare parts.
The expenses were detailed in a statement of account and were supported by documentary evidence such as sales invoices, delivery receipts, and trouble call reports.
Petitioner issued a series of demand letters to secure the payment for these incurred expenses, the last of which was dated July 18, 2000.
Respondent, however, refused to pay on the ground that the necessary procedural requirements regarding the approval of purchases (such as issuance of purchase orders) under the agreed Standard Operating Procedure (SOP) were not followed.

Petitioner filed a Complaint for Sum of Money with the RTC, Branch 100, Quezon City, which was docketed as Civil Case No. Q-01-43055.
On March 5, 2003, the RTC rendered judgment in favor of petitioner, ordering respondent to pay:

The sum of Php 1,161,933.27 for the costs of elevator parts, services, and maintenance, accruing legal interest from the filing of the complaint.
An additional Php 50,000.00 as attorney’s fees along with the costs of the suit.

The RTC based its decision on the presentation of sales invoices and other evidences, holding that a contract of sale of goods had been effectively entered into between the parties and that petitioner had fulfilled its obligations.

It did not give consent to the purchase or installation of the spare parts.
There was no perfected contract of sale due to the absence of a meeting of the minds on the price.

On April 20, 2006, the CA reversed the RTC decision and set aside the judgment, dismissing the complaint. The CA emphasized that:

The Service Agreement did not grant petitioner an unbridled license to purchase and install spare parts and subsequently demand payment based on its own pricing.
The lack of prior approval and the absence of purchase orders invalidated the existence of a perfected contract of sale.

Petitioner’s subsequent Motion for Reconsideration before the CA was denied on July 31, 2006.

Petitioner raised a substantive issue on whether there was a perfected contract of sale regarding the spare parts delivered and installed under the Service Agreement.
The procedural question also arose as to whether the determination of issues involving questions of fact (such as the existence of a verbal agreement and compliance with the SOP) could be reviewed under Rule 45, given that findings of fact by the CA are generally conclusive unless falling under recognized exceptions.
The Supreme Court identified that, although review is generally confined to errors of law, the present case fell under an exception due to conflicting findings of fact between the RTC and the CA.

Whether the petition should be denied due to raising questions of fact, given that the existence of a perfected contract of sale is essentially a question of fact.
The determination of factual findings by the CA is generally conclusive, except in specific exceptional circumstances (e.g., conflicting findings, grave abuse of discretion, or conclusions lacking evidentiary basis).

Whether there exists a perfected contract of sale between petitioner and respondent with respect to the spare parts delivered and installed.
Whether petitioner, by relying on a purported verbal agreement and industry practice in a hospital setting, sufficiently established consent, meeting of the minds, delivery, and a fixed price for the spare parts.
Whether respondent’s non-compliance with the SOP and its failure to raise timely objections to the repair and parts installation affect the existence and validity of the contract.