Hutama-RSEA/Supermax Philippines, J.V. v. KCD Builders Corporation
REITERATIONFacts
The Antecedents: KCD Builders Corporation (KCD) filed a complaint for sum of money against Hutama-RSEA/Super Max, Philippines (Hutama) and Charles H.C. Yang for unpaid services as a sub-contractor for Package 2-Site Works in the Philips Semiconductors Phils. Inc. – Integrated Circuits Plant Phase II Project. The parties, through their representatives, agreed on Hutama's total obligation to KCD amounting to ₱2,967,164.71. Despite a final billing and a letter of demand, Hutama failed to pay. Procedural History: Summons were served on Hutama and Yang. Their counsel filed an Entry of Appearance and Motion for Extension of time to File Responsive Pleading, which was granted until March 16, 2002. KCD filed a Motion to Declare Defendants in Default when no responsive pleading was filed. Hutama filed a Motion to Dismiss (for Yang) and an Urgent Motion to Admit Attached Answer with Compulsory Counterclaim on March 27, 2002, which was beyond the extended period. The RTC granted the motion to declare defendants in default and allowed ex-parte presentation of evidence. Hutama filed an Urgent Motion to Set Aside Order of Default, which was denied after Hutama failed to appear at the hearing. The RTC rendered a decision in favor of KCD. Hutama and Yang appealed to the CA. The Petition: The CA modified the RTC decision by dismissing the complaint against Charles H.C. Yang for lack of cause of action but affirmed the decision in all other respects. Hutama and Yang's motion for reconsideration was denied. Hence, this petition for review on certiorari before the Supreme Court.
Issue(s)
Whether the Court of Appeals erred in affirming the Regional Trial Court's decision regarding Hutama's liability to KCD. Whether the RTC committed a reversible error in failing to consider that KCD abandoned the project and is liable to Hutama. Whether the RTC committed a reversible error when it denied Hutama's right to present evidence, violating its constitutional right to due process. Whether the RTC committed a reversible error when it failed to consider that KCD failed to comply with Section 5, Rule 7 of the 1997 Rules of Civil Procedure on verification and certification of non-forum shopping. Whether the Court of Appeals erred in denying Hutama's motion for reconsideration without stating clearly and distinctly the factual and legal basis thereof.
Ruling
The Supreme Court denied the petition and affirmed the Decision of the Court of Appeals dated October 14, 2005, and the Resolution dated June 19, 2006, in CA-G.R. CV No. 78262.
Ratio Decidendi
On Hutama's liability to KCD: The Court reiterated the rule that findings of fact of the RTC, when affirmed by the CA, are binding upon the Supreme Court. The petitioner's claim that KCD abandoned the project and owed them money was a question of fact, and no exceptions to the rule on factual findings were present. The evidence showed that Hutama contracted KCD as a sub-contractor, a joint evaluation of the project cost was agreed upon, KCD billed Hutama, and Hutama refused to pay, compelling KCD to file a collection suit. On the alleged abandonment of the project and KCD's liability to Hutama: The Court reiterated the rule that findings of fact of the RTC, when affirmed by the CA, are binding upon the Supreme Court. The petitioner's claim that KCD abandoned the project and owed them money was a question of fact, and no exceptions to the rule on factual findings were present. The evidence showed that Hutama contracted KCD as a sub-contractor, a joint evaluation of the project cost was agreed upon, KCD billed Hutama, and Hutama refused to pay, compelling KCD to file a collection suit. On the alleged violation of due process due to the order of default: The Court found that the RTC acted within its discretion in issuing the order of default. Hutama failed to file its responsive pleading within the extended period granted. The RTC gave Hutama an opportunity to explain its side by setting a hearing for the motion to set aside the order of default, but Hutama failed to appear. The excuse provided by Hutama's counsel for the late filing of the answer was deemed a "flimsy excuse" deserving scant consideration, thus not violating Hutama's right to due process. On the alleged non-compliance with verification and certification of non-forum shopping: The Court clarified that a pleading can be verified by a party's representative, lawyer, or any person who personally knows the truth of the allegations. Furthermore, it is settled jurisprudence that the president of a corporation is presumed to have the authority to sign the verification and certification of non-forum shopping, absent any contrary provision in the corporate charter or by-laws. The president has sufficient knowledge to swear to the truth of the allegations and is presumed to act within the scope of his usual duties. On the denial of the motion for reconsideration: The Court found that the CA sufficiently stated the basis for denying the motion for reconsideration. The CA ruled that it found no plausible reason to depart from its earlier decision, which had exhaustively passed upon all the issues. This statement provided a sufficient legal reason for the denial, and the CA was not required to restate the entire rationale of its original decision.
Main Doctrine
The Supreme Court affirmed the Court of Appeals' decision, holding that the petitioner's failure to file a responsive pleading within the extended period justified the Regional Trial Court's order of default. The Court also reiterated that a corporation president is presumed to have the authority to sign verification and non-forum shopping certifications, absent any contrary provision in the corporate by-laws or charter.