Case Digest (G.R. No. L-68288)
Facts:
From February to March 2007, Dan T. Lim, trading as Quality Papers & Plastic Products Enterprises, delivered scrap papers worth ₱7,220,968.31 to Arco Pulp and Paper Co., Inc., represented by its President and CEO, Candida A. Santos, under an agreement that Arco would either pay cash or deliver finished products of equivalent value. On April 18, 2007, Arco issued a post-dated check (₱1,487,766.68) as partial payment, which bounced upon deposit. That same day, Arco and Eric Sy, owner of Megapack Container Corporation, executed a memorandum of agreement providing that Arco would deliver finished Test Liner paper to Megapack, and Lim would supply the raw materials. On May 5, 2007, Lim demanded payment of ₱7,220,968.31; no payment ensued. Lim filed a complaint for collection of sum of money with prayer for attachment in the Regional Trial Court (RTC) of Valenzuela City, Branch 171, on May 28, 2007. Arco answered but defaulted at pre-trial; Lim presented evidence ex parte. On SeptembeCase Digest (G.R. No. L-68288)
Facts:
- Parties and Background
- Petitioners: Arco Pulp and Paper Co., Inc. and its President/CEO, Candida A. Santos
- Respondent: Dan T. Lim, doing business as Quality Papers & Plastic Products Enterprises
- Transactions and Procedural History
- February–March 2007: Lim delivered scrap papers worth ₱7,220,968.31 to Arco Pulp and Paper under agreement to pay either cash or finished products of equivalent value.
- April 18, 2007: Arco issued a post-dated check for ₱1,487,766.68 which was dishonored for a closed account.
- Same day: Arco and Eric Sy executed a memorandum of agreement (MOA) to deliver finished products to Megapack Container Corp., using Lim’s raw materials.
- May 5, 2007: Lim demanded payment; no remittance followed.
- May 28, 2007: Lim filed a collection suit in RTC Valenzuela City. Arco defaulted at pre-trial; evidence admitted ex parte.
- September 19, 2008: RTC dismissed Lim’s complaint, ruling that the MOA novated and extinguished Arco’s obligation.
- Lim appealed to the Court of Appeals (CA).
- January 11, 2013: CA reversed, ordering Arco and Santos to pay Lim ₱7,220,968.31 plus 12% interest from demand, ₱50,000 moral damages, ₱50,000 exemplary damages, and ₱50,000 attorney’s fees.
- Petitioners moved for reconsideration; denied. They then filed this petition for review on certiorari before the Supreme Court.
Issues:
- Was the original obligation extinguished by novation?
- Is Candida A. Santos solidarily liable with Arco Pulp and Paper Co., Inc.?
- Are moral damages, exemplary damages, and attorney’s fees properly awarded?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)