OCTAVIO A. KALALO, vs. ALFREDO J. LUZ (J.

Zaldivar; 1970)
RELEVANT PROVISIONS: RA 529 DOCTRINE: Under Republic Act 529, if the obligation was incurred prior to the enactment of the Act and one is required to pay in a particular kind of coin or currency other than the Philippine currency the same shall be discharged in Philippine currency measured at the prevailing rate of exchange at the time the obligation was incurred. NATURE: Appeal from CFI Rizal decision

FACTS: 11/17/1959Kalalo (an engineer) entered into an agreement w/ Luz (an architect) under their firm names (O. A. Kalalo & Associates and A.J. Luz & Associates, respectively) where the former was to render engineering design services to the latter for fees, as stipulated in the agreement Pursuant to the agreement, Kalalo gave his services for several projects. 12/11/1961Kalalo sent a statement account asking for P116,565.00 engineering fees o Also stated: P57K = Luzs previous payment, thus P59,565.00= actual balance 05/18/1962Luz sent resume of fees to appellant, said they only owe P10,861.08 06/14/1962Luz sent a check w/ P10,861.08; Kalalo accepted but refused to accept it as full payment for services rendered 08/10/1962Kalalo filed a complaint against Luz o 4 causes of action: (1) $28K and P30,881.25 was due to him for his services; (2) P17,000.00 as consequential and moral damages; (3) P55Kas moral damages, attorney's fees and expenses of litigation; (4) P25K as actual damages, and also for attorney's fees and expenses of litigation.
Note: $28K fee is in dollars because it was for the International Research Institute project

Luzs Answer: some of Kalalos services were not in accordance w/ the agreement and Kalalos claims were not justified by the services actually rendered, and the amount they owe is P10,861.08. Kalalo has no cause of action and is in estoppel because of the statement of accounts, also Kalalo's claim regarding one of the projects was premature because Luz had not yet been paid for said project, and Kalalos services were not complete or were performed in violation of the agreement and/or otherwise unsatisfactory. TC: authorized that the case be brought to a Commissioner since the only question is on the assessment of the proper fees and the balance due to Kalalo after deducting the admitted payments made by Luz Based on Commissioners report, TC rules that the fees due to Kalalo are: o [($28K +P51,539.91) - sum they already paid] + the legal rate of interest thereon from the filing of the complaint in the case until fully paid for + P 8K Attorneys fees

$28K was to be converted into peso on the basis of the rate of exchange of the U.S. dollar to the Philippine peso at the time of payment of judgment as Certified by the Central Bank of the Philippines
[note: case says sum they payed is P69,475.46 but if you add up their previous payments mentioned in the case its just P67,861.08 weird, maybe its lawphil]

Luz appealed to SC.

ISSUES: (1) WoN Kalalos was in estoppel (because of statement of accounts) (2) Whether $28K should be paid on the basis of the exchange rate at the time of the payment (of fees in judgement) or at the time when the research institute project became due and demandable (3) What is the correct amount Luz must pay Kalalos? HELD: (1) NO. Statement of Accounts did not estop Kalalos because Luz did not rely on it as the Commissioners report found. Under Art 1431 CC, in order that estoppel may apply the

person, to whom representations have been made and who claims the estoppel in his favor must have relied or acted on such representations. (2) AT THE TIME OF THE PAYMENT. Under Republic Act 529, if the obligation was incurred prior to the enactment of the Act and one is required to pay in a particular kind of coin or currency other than the Philippine currency the same shall be discharged in Philippine currency measured at the prevailing rate of exchange at the time the obligation was incurred. Republic Act 529 does not provide for the rate of exchange for the payment of obligation incurred after the enactment of said Act. Thus, the rate of exchange should be that prevailing at the time of payment for such contracts. (3) LOWER COURT DECISION AFFIRMED (i.e. the amount due is: [($28K +P51,539.91) sum they already paid] + the legal rate of interest thereon from the filing of the complaint in the case until fully paid for + P 8K Attorneys fees)

side comment: wtf was this case, so boring so long all just beating around the bush ugh