Manzano vs. Lazaro

Facts:

Eduardo B. Manzano v. Antonio B. Lazaro, G.R. No. 173320, April 11, 2012, the Supreme Court Third Division, Peralta, J., writing for the Court. The petition seeks review of the Court of Appeals' Decision dated February 28, 2006 and Resolution dated June 21, 2006 in CA-GR. CV No. 82753, which affirmed the Regional Trial Court (RTC), Branch 97, Quezon City, Decision in Civil Case No. Q-98-35924 (June 7, 2004, presided by Acting Presiding Judge Hilario L. Laqui).

On February 16, 1998, petitioner Eduardo B. Manzano and respondent Antonio B. Lazaro executed a Professional Services Contract effective February 16, 1998 to May 15, 1998, under which Lazaro (the "second party") would head Manzano’s campaign machinery, hire and fire required personnel, authorize campaign expenditures, mobilize resources, safeguard assets, and develop programs to ensure the candidate’s winnability. The contract fixed a monthly rate of P70,000 (paid in two tranches) for three months and a bonus of P200,000 if Manzano won the vice-mayoralty.

Petitioner won the May 1998 election. In a June 16, 1998 transmittal of the last payroll, Lazaro was informed he would receive only P15,000 with a P20,000 balance to be forwarded upon final inventory of campaign materials. Lazaro delivered the inventory and on July 3, 1998 demanded the P20,000 balance and the P200,000 bonus. Manzano acknowledged receipt of the inventory on July 17, 1998 but asserted that he had not received liquidation of campaign expenses; Lazaro and Robert Gomez (the campaign's Director for Finance) exchanged letters stating that liquidation was not Lazaro’s responsibility.

When payment remained unpaid, Lazaro sued Manzano in the RTC for collection of sum of money. Manzano defended alleging Lazaro materially breached his obligations, misrepresented his qualifications, was often absent during campaign activities, and failed to provide poll watchers and competent personnel; he thus contended Lazaro was not entitled to the bonus and that his consent was vitiated by fraud and mistake.

On June 7, 2004 the RTC rendered judgment directing Manzano to pay Lazaro P220,000 (compensation and bonus) plus legal interest from July 3, 1998 until paid, and P30,000 as attorney’s fees. The RTC found that a court action was required to rescind the contract and that Manzano’s belated assertions of breach were inconsistent with earlier acknowledgments and payments. Manzano appealed to the Court of Appeals, which on February 28, 2006 dismissed the appeal and affirmed the RTC decision; its denial of reconsid...(Pro-only)

Issues:

• Did the Court of Appeals gravely err by limiting its discussion to the contract’s voidability and purported ratification without addressing respondent’s alleged material breach and entitlement to the P200,000 bonus?
• Did respondent commit a material breach of the Professional Services Contract that would bar his entitlement to the P200,000 bonus?
• Was petitioner’s consent vitiated by fraud or mistake because respondent misrepresented his expertise, rendering the contract annulable and unenforceable?
• May petitioner invoke equity or unjust enrichment to deny payment of the balance a...(Pro-only)

Ruling:

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Ratio:

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Doctrine:

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