Case Digest (G.R. No. 175048) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
On March 26, 1996, Excellent Quality Apparel, Inc. (petitioner), represented by its Vice-President for Production Max L.F. Ying and Treasurer Alfiero R. Orden, contracted with Multi-Rich Builders, a sole proprietorship owned by Wilson G. Chua, for the construction of a garment factory in the Cavite Philippine Economic Zone Authority (CPEZA). The project was to be completed within 150 calendar days and contained an arbitration clause providing that any unresolved dispute be submitted to a three-member Arbitration Committee under R.A. No. 876. The factory was finished on November 27, 1996. Thereafter, on February 20, 1997, respondent Win Multi-Rich Builders, Inc. (Win), also headed by Chua, was incorporated. On January 26, 2004, Win sued petitioner and Mr. Ying before the Regional Trial Court (RTC) of Manila, seeking the recovery of ₱8,634,448.20 arising from the construction contract and securing a writ of attachment against petitioner’s properties. To prevent levy, petitioner de Case Digest (G.R. No. 175048) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Contract Execution and Arbitration Clause
- On 26 March 1996, Excellent Quality Apparel, Inc. (petitioner), represented by Max L.F. Ying and Alfiero R. Orden, entered into a contract with Multi-Rich Builders (a sole proprietorship), represented by Wilson G. Chua, for the construction of a garment factory in the Cavite Philippine Economic Zone Authority (CPEZA). The project duration was capped at five (5) months or 150 calendar days.
- Article XIX of the contract provided for dispute resolution by a three-member Arbitration Committee governed by R.A. 876, with costs borne equally by owner and contractor.
- Completion and Corporate Status
- The factory construction was completed on 27 November 1996.
- On 20 February 1997, Multi-Rich Builders was incorporated as Win Multi-Rich Builders, Inc. with Chua as its president; no formal assignment of the sole proprietorship’s assets or liabilities accompanied the incorporation.
- Filing of Collection Suit and Writ of Attachment
- On 26 January 2004, Win filed a complaint against petitioner and Mr. Ying for P8,634,448.20, praying for a writ of attachment upon allegation of imminent absconding and business closure.
- The RTC (Manila, Branch 32) issued the writ on 10 February 2004; petitioner furnished a PEZA-branch PCIBank check as a guarantee to stay levy.
- Jurisdictional and Procedural Motions
- Petitioner’s Omnibus Motion (17 February 2004) denied any indebtedness, challenged RTC jurisdiction due to the arbitration clause, and contested Win’s legal personality.
- Petitioner discovered a variance in the plaintiff’s name, secured an SEC certificate showing no “Multi-Rich Builders, Inc.” record, and moved to dismiss for lack of real party in interest.
- The RTC denied all such motions (Order 12 April 2004) but granted Win’s motion to deposit garnished funds (Order 20 April 2004), which were subsequently released to Win.
- Court of Appeals Review and Supreme Court Petition
- Petitioner filed a Rule 65 petition before the CA on 18 June 2004. The CA Decision of 14 March 2006 annulled the two RTC orders but held that the RTC had jurisdiction over the suit.
- The CA denied reconsideration on 11 October 2006. Petitioner then filed the present Rule 45 petition before the Supreme Court.
Issues:
- Legal Personality and Standing
- Whether Win Multi-Rich Builders, Inc. was the real party in interest entitled to institute the collection suit.
- Jurisdiction in Light of Arbitration Clause
- Whether the RTC had jurisdiction over a construction dispute subject to an arbitration agreement invoking the Construction Industry Arbitration Commission (CIAC).
- Propriety of Writ of Attachment and Garnishment
- Whether the issuance of the writ of attachment and the subsequent release of the garnished funds were proper in view of jurisdictional defects.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)