Case Summary (G.R. No. 123892)
Key Dates
• November 1986 – Negotiations and agreement on scope and fee
• December 1986 – Submission of design plans for board meeting
• February 1987 – Lopez repudiates obligation, claiming no contract
• May–June 1987 – Demand letters for payment and return of blueprints
• October 13, 1987 – Complaint filed in the Regional Trial Court, Pasig (Civil Case No. 55238)
• November 19, 1990 – RTC renders judgment in favor of Soler
• October 26, 1995 – Court of Appeals reverses RTC decision
• May 21, 2001 – Supreme Court decision
Applicable Law
• 1987 Philippine Constitution
• Civil Code of the Philippines (1950), Article 1318 (requisites of a contract)
• Doctrine of apparent authority
• Principle of quantum meruit
Trial Court Findings and Disposition
• The RTC found a perfected oral contract between Soler and COMBANK via Lopez’s apparent authority.
• Awarded Soler ₱15,000 (quantum meruit), ₱5,000 attorney’s fees, ₱2,000 litigation expenses, ₱5,000 exemplary damages, plus costs.
Court of Appeals Rationale
• Held no binding contract, noting absence of COMBANK’s express consent and that Lopez’s invitations were merely to submit a bid subject to board approval.
• Concluded Soler failed to prove contractual elements.
• Reversed RTC decision and denied Soler’s claims.
Issues on Supreme Court Review
- Existence of a perfected contract between Soler and COMBANK through Lopez.
- Scope of Lopez’s authority to bind the bank.
- Entitlement to compensation on a quantum meruit basis.
Analysis of Contract Formation
• Civil Code Article 1318 requires consent, a certain object, and a cause.
• Contracts undergo negotiation, perfection (meeting of minds), and consummation (performance).
• November 1986 discussions and agreement on fee and delivery timeline established consent and object.
• Submission of designs in December 1986 consummated the contract.
Doctrine of Apparent Authority
• A corporation is bound by acts of an officer held out to the public as possessing authority.
• Lopez, acting as branch manager, negotiated, received blueprints, and accepted design submissions.
• COMBANK is estopped from denying Lopez’s authority, having knowingly benefited from her actions.
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Case Syllabus (G.R. No. 123892)
Antecedent Facts
• Petitioner Jazmin Soler, a licensed professional interior designer and Fine Arts graduate of the University of Sto. Tomas, was asked in November 1986 by her friend Rosario Pardo to discuss renovation plans for COMBANK’s Ermita Branch with branch manager Nida Lopez.
• Despite her initial hesitation due to out‐of‐town commitments and a tight December 1986 deadline, petitioner agreed after Ms. Lopez insisted and assured compensation.
• Parties agreed on a professional fee of ₱10,000.00; specifications discussed included conference room, carpeting, wallpaper, bookshelves, clerical area on the second floor, kitchen, ceiling, and teller booth renovations.
• Petitioner obtained blueprints, engaged draftsman Jackie Barcelon (measurement), Engineer Ortanez (electrical layout, ₱4,000.00), architects Frison Cruz and De Mesa (drafting, ₱5,000.00), and Barcelon (₱6,000.00), and sourced quotations from wallpaper suppliers and sash makers.
• In December 1986, petitioner submitted her layout and designs to Ms. Lopez, who expressed approval.
Demand for Payment and Subsequent Correspondence
• Petitioner’s repeated demands for payment were ignored by Ms. Lopez.
• February 1987: In a chance encounter at the Cultural Center of the Philippines, Ms. Lopez denied petitioner’s entitlement, claiming the designs did not conform to the bank’s standard design and that no agreement existed.
• May 20, 1987: Petitioner’s counsel formally demanded payment of ₱10,000.00; no response.
• June 18, 1987: Counsel demanded return of submitted blueprints; Ms. Lopez refused.
Trial Court Proceedings and Ruling
• October 13, 1987: Petitioner filed a complaint in RTC