G.R. No. 153827 - Asian Construction and Development Corp. vs. PCI Bank

On February 24, 1999, Philippine Commercial International Bank (PCIBANK) filed a complaint for sum of money with prayer for writ of preliminary attachment against Asian Construction and Development Corporation (ASIAKONSTRUKT) before the Regional Trial Court (RTC) of Makati City.
The complaint alleged that ASIAKONSTRUKT availed from PCIBANK various U.S. dollar-denominated credit accommodations totaling US$4,487,000.00 through promissory notes, all secured by several Deeds of Assignment of Receivables and Contract Proceeds executed in favor of PCIBANK, assigning receivables from contracts with entities such as National Power Corporation (NPC), ABB Power, Inc., PNOC, and Ormat Philippines, Inc.
The deeds of assignment stipulated that the receivables were assigned to secure payment of the indebtedness, including interests, bank charges, collection costs, other obligations, and that ASIAKONSTRUKT divested itself of rights, title, and interest over the receivables and proceeds thereof.

Despite due and demandable promissory notes, ASIAKONSTRUKT failed and refused to pay the outstanding obligations amounting to US$4,553,446.06 as of December 31, 1998, inclusive of principal, interests, and penalties.
PCIBANK alleged fraud by ASIAKONSTRUKT in the contracting and performance of the debt. It was discovered through telephone inquiry that ASIAKONSTRUKT had collected contract proceeds assigned to PCIBANK but failed to remit them, using the proceeds for its own purposes. Such fraudulent acts deprived PCIBANK of its security.
Consequently, PCIBANK claimed damages, including exemplary damages, attorney’s fees, and costs of suit.

The RTC issued a writ of preliminary attachment after ex-parte presentation of evidence by PCIBANK, and a bond was posted thereby. ASIAKONSTRUKT did not move to quash or dissolve the writ.
ASIAKONSTRUKT filed its Answer admitting indebtedness but denying fraud and contending partial collection of assigned receivables. It raised defenses citing the 1997 financial crisis and claimed that the Deeds of Assignment were contracts of adhesion. It also filed a counterclaim seeking attorney’s fees and litigation expenses.
PCIBANK filed a Motion for Summary Judgment claiming the defenses were sham, asserting no genuine issue of material fact existed, and maintained the validity and enforceability of the deeds of assignment.
ASIAKONSTRUKT opposed the motion but did not submit affidavits to support the alleged genuine issues of material fact it raised.
The RTC granted the Motion for Summary Judgment on May 16, 2000, ordering ASIAKONSTRUKT to pay the principal claim with interest, attorney’s fees (reduced from P1,800,000 to P1,260,000), and costs.
ASIAKONSTRUKT appealed to the Court of Appeals (CA). The CA affirmed the summary judgment with modification reducing attorney’s fees to P1,000,000 and denied the motion for reconsideration.
ASIAKONSTRUKT filed a petition for review under Rule 45 with the Supreme Court, raising issues regarding the propriety of summary judgment and the excessiveness of attorney’s fees.

Whether there are genuine issues of material fact that would preclude the granting of summary judgment.
Whether the award of attorney’s fees is exorbitant or unconscionable.