Case Digest (G.R. No. 171703) Core Legal Reasoning Model
Facts:
On March 13, 2001, Monark Equipment Corporation (MEC) filed a complaint for a sum of money with damages against Asian Construction and Development Corporation (ACDC) before the Regional Trial Court (RTC) of Quezon City. MEC alleged that ACDC leased certain equipment from MEC — specifically Caterpillar generator sets and Amida mobile floodlighting systems — during the period from March 13 to July 15, 1998, but failed to pay rentals amounting to Php 4,313,935.00 despite demands. Further, MEC claimed that from July 14 to August 25, 1998, ACDC leased additional equipment for a power plant project in Mauban, Quezon; a balance of Php 456,666.67 remained unpaid. Moreover, ACDC purchased and took custody of various equipment parts from MEC valued at Php 237,336.20 but did not pay for these items. MEC's complaint prayed for the total amount of Php 5,071,335.86 with 12% legal interest per annum from the date the obligations became due, plus attorney’s fees of 15% of the claim, and co
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Case Digest (G.R. No. 171703) Expanded Legal Reasoning Model
Facts:
- Initiation of the Case
- On March 13, 2001, Monark Equipment Corporation (MEC) filed a Complaint for sum of money with damages against Asian Construction and Development Corporation (ACDC) in the RTC of Quezon City.
- The complaint alleged that ACDC leased equipment, specifically Caterpillar generators and Amida mobile floodlighting systems from MEC for March 13 to July 15, 1998, but failed to pay rentals totaling ₱4,313,935.00.
- Further, from July 14 to August 25, 1998, various other equipment were leased by ACDC for its Mauban, Quezon power plant, with an unpaid balance of ₱456,666.67.
- ACDC also bought and took custody of equipment parts from MEC for ₱237,336.20, unpaid despite demands.
- MEC prayed for:
- Payment of ₱5,071,335.86 (total sum).
- Legal interest of 12% per annum from due date until fully paid.
- Attorney’s fees equivalent to 15% of the claim.
- Payment of litigation costs.
- ACDC’s Answer and Third-Party Complaint
- ACDC filed a motion to admit an answer with a third-party complaint against Becthel Overseas Corporation (Becthel).
- ACDC admitted indebtedness to MEC of ₱5,071,335.86 but raised special and affirmative defenses:
- Third-party defendant Becthel failed to pay overdue obligations linked to equipment used by ACDC.
- The equipment leased was used in Becthel’s projects in Mauban, Quezon and Pampanga, but ACDC was not paid for its services, causing non-payment to MEC.
- The third-party complaint asserted that:
- Becthel contracted ACDC for construction work using MEC’s leased equipment.
- Becthel failed to pay ACDC despite repeated demands.
- ACDC sought indemnity or contribution from Becthel for ₱456,666.67 plus attorney’s fees of ₱500,000.00.
- Prayer: Dismissal of MEC’s complaint and order Becthel to pay ₱456,666.67 with interest and attorney’s fees.
- MEC’s Opposition and Trial Court Proceedings
- MEC opposed ACDC’s third-party complaint motion, arguing:
- ACDC already admitted principal obligation of ₱5,071,335.86.
- Transactions between MEC-ACDC and ACDC-Becthel were independent.
- Allowing third-party complaint would cause undue delay.
- MEC filed a motion for summary judgment, asserting no genuine issue on ACDC’s obligation except attorney’s fees and costs.
- ACDC opposed, claiming genuine issues exist and that third-party complaint must be litigated.
- Trial court denied ACDC’s motion for leave to file third-party complaint and granted MEC’s motion for judgment on the pleadings, ordering ACDC to pay ₱5,071,335.86 plus 12% interest.
- Appeal and Supreme Court Petition
- ACDC appealed to the Court of Appeals, contending:
- Error in denying the third-party complaint motion.
- Error in granting summary judgment / judgment on the pleadings.
- Error in ordering payment plus interest.
- CA dismissed the appeal, affirming the RTC decision. CA ruled that MEC, by asking for judgment on the pleadings, waived claims beyond ₱5,071,335.86; no genuine issue warranted trial. CA sustained disallowance of third-party complaint since transactions were unrelated.
- ACDC filed a petition for review on certiorari raising:
- Whether a third-party complaint was proper.
- Whether judgment on the pleadings was proper.
Issues:
- Whether the trial court erred in denying ACDC leave to file a third-party complaint against Becthel.
- Whether the trial court and CA erred in rendering judgment on the pleadings against ACDC when genuine issues allegedly existed.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)