G.R. No. 86220 - People vs. Ciobal y Pabrua

On November 17, 1959, Octavio P. Kalalo (licensed civil engineer, “appellee”) and Alfredo J. Luz (licensed architect, “appellant”) executed an engineering design services agreement (Exhibit A).

Appellee to provide design computation, sketches, contract drawings, technical specifications, bills of quantities, cost estimates, and consultation during construction.
Fees stipulated as percentages of the architect’s fee: structural 12½%, electrical 2½%, mechanical 2½%, sanitary 2½%.

A subsequent “clarification” excluded foundation soil exploration, principally engineering works, and authorized fee increases on projects costing under ₱100,000.

Appellee rendered services on ten projects (e.g., Fil-American Life Insurance Buildings, General Milling Flour Mill, IRRI Research Center).
December 11, 1961: appellee sent statement of account (Exh. 1-A) claiming ₱116,565.00, less prior payments of ₱57,000.00, leaving ₱59,565.00 due.
May 18, 1962: appellant sent his own resume of fees, admitting only ₱10,861.08 due and issued a check which appellee rejected.
August 10, 1962: appellee filed a four-cause complaint—(1) engineering fees of US$28,000 and ₱100,204.46, less payments; (2) consequential and moral damages; (3) moral damages, attorney’s fees; (4) actual damages, attorney’s fees.
Appellant’s answer admitted some fees but asserted correct balance ₱10,861.08, denied damages claims, pleaded estoppel, and counterclaimed for damages and ₱10,000 attorney’s fees.

Parties agreed uncontested entitlement, leaving quantification to Commissioner.
Commissioner found fees due: US$28,000 (20% of ₱140,000 IRRI fee) and ₱51,539.91 for other projects, less ₱69,475.46 paid; recommended ₱5,000 attorney’s fees.
Counsel waived objections to fact findings; framed two legal issues: applicability of estoppel and permissibility/rate of dollar payment.

₱51,539.91 and US$28,000 (converted at current exchange) less ₱69,475.46, plus interest.
₱8,000 attorney’s fees and costs; counterclaim dismissed.

Appellant appealed to the Supreme Court, raising five error assignments (estoppel, exchange rate, balance due, attorney’s fees, counterclaim).
During appeal, a writ of attachment issued against appellant’s Philippines properties.

Whether appellee’s December 11, 1961 statement of account (Exh. 1-A) estops him from claiming higher fees or interpreting contract differently.
Whether the IRRI‐project fee (US$28,000) must be paid in dollars or converted at the August 1961 official rate of ₱2.00/US$, or at the rate prevailing at judgment.
Whether the aggregate balance due is only ₱15,792.05 as asserted by appellant.
Whether awarding ₱8,000 attorney’s fees (vs. Commissioner’s ₱5,000 recommendation) was improper.
Whether appellant’s counterclaim deserved relief.