G.R. No. L-40675 - People's Homesite and Housing Corp. vs. Ericta

In May 1990, the Philippine National Bank (PNB) engaged Shellink Planners, Inc. (SPI) to render furniture/movables designs (FMD) and consultancy services for Phase IA of the PNB Complex in Pasay City.
Based on past practice between the parties, SPI commenced its work upon receiving a verbal notice to proceed from then PNB President Edgardo Espiritu, even in the absence of a written contract.

On September 26, 1991, SPI submitted a formal proposal amounting to P5,663,150.75 covering FMD designs and an array of consultancy services including:

To scale down on PFAS and FMW monitoring services, or
To perform full services as initially proposed at an adjusted package of P4,473,999.03.

The parties failed to reach a formal written agreement on the scope or amount for the services.

On July 8, 1994, SPI, through its General Manager Armando N. Alli, sent a letter to PNB demanding payment of P1,152,730.29, representing expenses incurred in preparing the FMD for Phase IA.
SPI’s counsel sent another demand letter on April 24, 1995, addressed to PNB’s Senior Vice President and the Chairman of the Banking Center Building Committee, reiterating the claim for the same amount.
In response, on May 9, 1995, Mr. Lucas R. Vidad, the then Senior Vice President, assured the respondent of PNB’s willingness to pay, but recommended a settlement sum of P864,547.71 by applying a billing multiplier of 1.5 instead of SPI’s proposed multiplier of 2.0.

SPI filed its Complaint on January 11, 1996, for Collection of Sum of Money and Damages, demanding the recovery of the P1,152,730.29 incurred in producing the FMD.
On August 24, 1998, the Regional Trial Court ruled in favor of SPI, awarding:

Actual damages of P864,547.71 plus legal interest from the due date (July 8, 1994),
Attorney’s fees amounting to P20,000.00, and
Litigation expenses of P6,937.10.

The Court of Appeals affirmed the RTC’s decision on July 26, 2002.
PNB (the petitioner) subsequently filed a petition under Rule 45 seeking to set aside the decision, contesting the entitlement of SPI to compensation based on quantum meruit and the award of legal interest and attorney’s fees.

Whether Shellink Planners, Inc. is entitled to payment for the services rendered based on the doctrine of quantum meruit despite the absence of a written contract.
Whether the benefit derived by PNB from the use of the FMD designs, even though the designs were not necessarily utilized for fabricating furniture, establishes the grounds for compensating SPI.
Whether the application of the billing multiplier should adhere to the industry minimum standard of 2.0, as proposed by SPI, in the absence of a formally agreed compensation amount.