G.R. No. 191088 - Frilou Construction, Inc. vs. Aegis Integrated Structure Corp.

Petitioner Frilou Construction, Inc. engaged respondent Aegis Integrated Structure Corporation to supply, fabricate, deliver, and erect structural steel requirements for two projects — the proposed Exhibit Building and the Residential Building.
Two Purchase Orders were issued: No. 0461 amounting to ₱5,000,000.00 (October 5, 2004) and No. 0500 amounting to ₱1,024,306.00 (November 19, 2004).
Respondent completed work and billed petitioner a total contract price of ₱6,024,306.00.

Petitioner partially paid ₱4,490,014.32.
Respondent claimed an unpaid balance of ₱1,534,291.68 and sent repeated demand letters, including two signed by its Vice-President, and a final demand through legal counsel.
Respondent filed a suit for sum of money, attorney’s fees of ₱150,000.00, and costs.

Petitioner admitted paragraphs 2 and 3 of the complaint regarding the existence of the Purchase Orders but denied paragraphs 4 and 5 concerning the unpaid balance.
Asserted special and affirmative defenses:

Respondent’s Sales Engineer testified on the contractual engagements, material deliveries, payments made, demand letters sent, and expenses incurred. Petitioner’s representative signed the purchase orders.
Petitioner’s warehouse employee testified only that deliveries were received and signed for, but had no knowledge of the financial value of materials.

Dismissed complaint due to insufficient evidence of petitioner’s remaining liability.
Noted petitioner’s admission was qualified by special defenses, and respondent failed to prove that deliveries were complete as to the total contract price.

Held that petitioner’s judicial admission of the purchase orders established respondent’s claim by preponderance of evidence.
Non-specific denial of respondent’s allegations deemed admissions.
Valid meeting of minds evidenced by purchase orders, binding contract.
Petitioner estopped from claiming a lesser contract amount than the purchase orders show.
Petitioner failed to present evidence of partial performance by respondent.

Petitioner argued it denied liability for the full contract amount by reference to special defenses, claiming respondent lacked evidence.
Supreme Court ruled petitioner failed to make a specific denial as required by Section 10, Rule 8, and thus admitted the material averments in paragraph 4 of the complaint.
Petitioner’s general denial without stating facts or matters supporting it did not meet the requirement for specific denial.
Petitioner failed to allege an affirmative defense, such as partial performance, to rebut alleged full liability.

Legal interest imposed at 12% per annum from April 11, 2005 to June 30, 2013; 6% per annum thereafter until full payment.
Respondent’s claimed attorney’s fees of ₱150,000.00 were reduced to a reasonable amount of ₱25,000.00.

Whether respondent sufficiently proved petitioner’s liability for the unpaid balance of ₱1,534,291.68 under the purchase orders.
Whether petitioner’s denial of the unpaid balance was sufficient to overcome respondent’s claim.
Whether the proper legal interest and attorney’s fees should be awarded.