Title
Uniwide Sales, Inc. vs. Mirafuente and Ng, Inc.
Case
G.R. No. 172454
Decision Date
Aug 17, 2007
Uniwide terminated Mirafuente & Ng's architectural services after completion, refusing payment; courts ruled termination unjust, upheld respondent's claim.

Case Digest (G.R. No. 172454)
Expanded Legal Reasoning Model

Facts:

  • Background of the Contract
    • Parties Involved:
      • Uniwide Sales, Inc. (Petitioner)
      • Mirafuente and Ng, Inc., represented by Architect Robert Mirafuente (Respondent)
    • Nature of the Contract:
      • The parties executed a "DESIGN SERVICES: Architectural Services Agreement" on December 13, 1993.
      • The agreement engaged the respondent to “plan and design the proposed UNIWIDE SALES MALL” located along Roxas Boulevard, Parañaque.
      • The compensation for the Architectural Design Service was fixed at Two Million Five Hundred Thousand Pesos (P2,500,000).
  • Contractual Terms and Scope of Work
    • Scope of Work:
      • Provision of professional services including preparation, planning, design, and documentation of architectural drawings.
      • Completion of work divided into phases:
        • Ninety-five percent (95%) upon submission of complete working drawings and construction documents.
        • The remaining five percent (5%) for tasks during the construction phase.
    • Payment Schedule:
      • Payments staggered as follows:
        • 10% upon signing of the Agreement.
        • 15% during the Schematic Design Phase.
        • 35% during the Design Development Phase.
        • 35% during the Construction Document Phase.
        • 5% during the Construction Phase.
    • Miscellaneous Provisions:
      • Additional expenses included:
        • Payment for work suspended or abandoned due to causes not attributable to the architect.
        • Payment for change orders equivalent to six (6) percent of the revised construction cost when changes occurred post-final design approval.
  • Performance of the Contract by the Respondent
    • Submission of Deliverables:
      • Respondent delivered copies of the Master Plans and a complete set of architectural plans and documents.
      • The architectural designs, plans, and specifications known as the “complete and final set” were transmitted before termination.
    • Communications regarding Deliverables:
      • On August 16, 1995, respondent sent a letter to petitioner’s chairman and architectural representative, along with a notice indicating submission related to a Change Order.
      • Subsequent letters on September 18, 1995 and December 15, 1995 followed, demanding payment for:
        • Construction Document Phase (P437,500)
        • Change Order services (P400,000)
  • Termination of the Contract and Subsequent Dispute
    • Termination Notice:
      • Petitioner, through its consultant Asian Technicon Managers & Consultants, Inc., terminated the respondent’s services by letter dated August 22, 1995 (received on August 23, 1995).
      • The termination notice cited a decision to stop all works and requested all developed documents be submitted to close the contract.
    • Petitioner’s Rationale for Termination:
      • Alleged that the architect’s performance was delayed, specifically that the submission of design plans occurred after an alleged six-month period from the signing of the agreement.
      • Claimed that services were inadequately performed owing to material deficiencies.
      • Asserted that there was a prior verbal instruction (in June 1995) for termination, although the formal termination letter referred only to an instruction to “put on hold.”
    • Filing of the Complaint:
      • Respondent filed a complaint on February 27, 1996, seeking:
        • Payment for the Construction Document Phase (P437,500)
        • Payment for the Change Order (P400,000)
        • Interest at 24% per annum from August 9, 1995 until payment.
        • Attorney’s fees (25% of the amounts due) and costs.
  • Judicial Proceedings Prior to the Supreme Court
    • Regional Trial Court (RTC) Decision:
      • The RTC of Pasig (Branch 155) ruled in favor of the respondent on June 19, 2001.
      • Ordered petitioner to pay the total unpaid fees with legal interest, attorney’s fees, and costs.
    • Court of Appeals (CA) Ruling:
      • The CA affirmed the RTC’s decision on November 14, 2005.
      • Highlighted that the respondent had delivered the complete and final set of architectural designs and plans prior to notice of termination.
      • Found that petitioner’s termination appeared as a ploy to avoid fulfilling its contractual payment obligations.
  • Petition for Review and Alleged Factual Disputes
    • Grounds of Petition:
      • Petitioner alleged that the CA improperly based its decision on factual findings, such as the completeness of delivery of design documents.
      • Asserted that a verbal agreement existed requiring submission within six (6) months, which the respondent allegedly failed to meet.
      • Questioned the sufficiency of evidence regarding the timing of termination relative to the performance of contractual obligations.
    • Supreme Court’s Observation:
      • The petition centered on questions that were primarily factual rather than purely legal.
      • The Court noted that under Rule 45, only questions of law are generally allowed to be raised in petitions for review.

Issues:

  • Whether the respondent had completed its contractual obligations by submitting the complete and final set of architectural designs, plans, and specifications before the termination of its services.
    • Examination of evidence regarding the timing of submission of deliverables.
    • Consideration of the significance of communications between the parties regarding design submission and termination.
  • Whether the petitioner was justified in terminating the respondent’s services, particularly in light of the allegedly agreed six-month period from the signing of the agreement.
    • Analysis of the alleged verbal agreement concerning the timeline for completion.
    • Evaluation of the petitioner’s conduct, including the claim of termination via oral advice and subsequent formal termination letter.
  • Whether the factual findings of the trial and appellate courts were sufficient and binding on the Supreme Court.
    • Consideration of the evidence presented at trial concerning performance and termination.
    • Review of whether the petition under Rule 45 improperly raised questions of fact instead of questions of law.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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