Case Digest (G.R. No. 221147)
Facts:
The case involves Asian Construction and Development Corporation (petitioner) and Mero Structures, Inc., which was later substituted by Novum Structures LLC, Inc., First Centennial Clark Corporation (FCCC), and National Development Company (NDC) as respondents. The events leading to the case began on March 16, 1998, when FCCC was established to manage the Philippine National Centennial Exposition in Clark Special Economic Zone, Pampanga. On the same day, FCCC entered into a Construction Agreement with Asian Construction for the design and construction of the Exposition Theme Park. Mero Structures, an American corporation, submitted a Materials Only Proposal to Asian Construction for the supply of materials for a special Philippine flag structure, which was to be completed by July 19, 1998. The proposal included a contract price of US$570,000, with 20% payable upon contract award and the remainder via letter of credit. Asian Construction accepted this proposal on March 17, 199...
Case Digest (G.R. No. 221147)
Facts:
Background:
- In 1998, First Centennial Clark Corporation (FCCC) was established to design, construct, operate, and manage the Philippines' National Centennial Exposition at Clark Special Economic Zone (CSEZ) in Pampanga.
Construction Agreement:
- On March 16, 1998, FCCC entered into a Construction Agreement with Asian Construction and Development Corporation (Asiakonstrukt) for the construction of the Exposition Theme Park.
MERO’s Proposal:
- On the same date, MERO Structures, Inc. (MERO), an American corporation, submitted a "Materials Only Proposal" to Asiakonstrukt for the supply of materials to construct a special Philippine flag structure. The proposal stipulated a contract price of US$570,000.00, with 20% payment upon contract award and the remainder via letter of credit. The materials were to be shipped by April 4, 1998, if the transaction was confirmed by March 18, 1998.
Acceptance of Proposal:
- On March 17, 1998, Asiakonstrukt accepted MERO’s proposal. On April 5, 1998, MERO shipped the materials to Asiakonstrukt.
Flag Structure Proposal:
- On June 16, 1998, Asiakonstrukt submitted a proposal to FCCC for the design, supply, and installation of the flag structure using MERO’s materials. The proposal was approved by FCCC on June 17, 1998, subject to certain conditions.
Payment Issues:
- Asiakonstrukt requested payment from FCCC on August 10, 1998, but FCCC failed to pay. MERO repeatedly sought payment from Asiakonstrukt starting March 19, 1998, but Asiakonstrukt claimed it could not pay due to FCCC’s nonpayment.
Direct Payment Request:
- On October 13, 1999, MERO requested Asiakonstrukt to allow direct payment from FCCC. Asiakonstrukt agreed on November 8, 1999, but FCCC refused to pay, citing lack of a direct contract with MERO.
Legal Action:
- MERO filed a complaint for sum of money against Asiakonstrukt, FCCC, and National Development Corporation (NDC) on February 21, 2002, seeking payment of US$570,000.00 plus interest and damages.
Issue:
- (Unlock)
Ruling:
- (Unlock)
Ratio:
- Novation: Novation requires an unequivocal declaration that the old obligation is extinguished or that the new and old obligations are incompatible. In this case, the letters merely allowed MERO to attempt collecting directly from FCCC but did not extinguish Asiakonstrukt’s obligation to pay MERO. Additionally, FCCC, a third party, did not consent to any novation.
- Change of Corporate Name: The change of MERO’s name to Novum Structures LLC did not alter its legal identity or interests. Thus, Novum Structures LLC remained the proper party to the case.