G.R. No. 173181 - Hutama-RSEA/Supermax Phils., J.V. vs. KCD Builders Corporation

The dispute originated from a written contract evidenced by the Notice to Proceed dated November 10, 2000, entered into by Hutama-RSEA/Supermax Philippines (appellant) as principal contractor and KCD Builders Corporation (appellee) as sub-contractor.
The contract pertained to the Package 2 Site Works for the Philips Semiconductors Phils. Inc. – Integrated Circuits Plant Phase II Project located at the Light Industry and Science Park of the Philippines-2 (LISPP-2) in Calamba, Laguna.
Despite completing the project, controversy arose over payment: after a joint evaluation by the parties’ respective engineers, a final billing amounting to ₱2,967,164.71 was agreed upon.

On December 10, 2001, KCD Builders Corporation filed a complaint for sum of money against Hutama and Charles H.C. Yang before the Regional Trial Court (RTC) of Makati, seeking recovery of the agreed sum plus additional fees.
Summons were duly served on Hutama and Yang on February 8, 2002, and their counsel later filed an Entry of Appearance along with a Motion for Extension of Time to File a Responsive Pleading, which extended the deadline until March 16, 2002.

On April 11, 2002, KCD filed a Motion to Declare Hutama and Yang in default for failing to file the responsive pleading within the prescribed period.
Despite motions filed by both Hutama (an Urgent Motion to Admit Attached Answer with a Compulsory Counterclaim) and Yang (a Motion to Dismiss on the ground that his signing of the sub-contract was only as a representative), their filings were deemed untimely as they were filed after the extended period had ended.
Consequently, the RTC declared both defendants in default and proceeded, upon KCD’s motion, to allow the ex-parte presentation of evidence by KCD before a branch clerk of court appointed as commissioner.

During the ex-parte proceedings, witness Celso C. Dioko testified regarding the execution of the contract, the billing process, and the joint evaluation conducted by both parties’ engineers. He corroborated that a final amount of ₱2,967,164.71 was due and that despite subsequent demands, payment was not made.
Engr. Jose De Asis, an employee of KCD, confirmed the evaluation process and the agreed amount, reinforcing the evidence of Hutama’s contractual obligation.
On February 20, 2003, the RTC rendered a decision in favor of KCD, ordering Hutama and Yang to pay the total indebtedness, including interest at 12% per annum, attorney’s fees, and other costs.

Hutama and Yang appealed the RTC’s decision before the Court of Appeals (CA). On October 14, 2005, the CA modified the RTC ruling by dismissing the complaint against Charles H.C. Yang for lack of cause of action, while affirming the decision in favor of KCD on the remaining issues.
A motion for reconsideration was subsequently filed by Hutama and Yang but was denied by the CA through a Resolution dated June 19, 2006.
The petition for review on certiorari under Rule 45 was then elevated to the Supreme Court, challenging the CA’s affirmation of the RTC’s decision.

Whether the Court of Appeals erred in affirming the RTC’s findings by essentially re-examining the factual evidence regarding Hutama’s contractual obligations and the amount due to KCD.

Specifically, whether the petitioner's claim that KCD abandoned the project, thereby creating an obligation on the part of KCD to pay Hutama, merits re-evaluation of the adjudicated facts.
Whether reviewing the factual determinations of the RTC constitutes a permissible judicial exercise when challenges are raised only on questions of law under a petition for review on certiorari.

Whether there was a denial of due process when Hutama and Yang were not allowed to present evidence due to the default declaration for a late filing of their responsive pleadings.

The issue involves whether the RTC’s order of default, executed after providing an extension and opportunity to explain, violated their constitutional right to due process.

The sufficiency and validity of the verification and certification of non-forum shopping executed by KCD’s president.

Whether the signing of these documents by the corporate president, without additional evidence of authority, complies with the procedural requirements under the Rules of Court.

Whether the CA committed reversible error in denying Hutama’s motion for reconsideration without clearly articulating the factual and legal basis for its denial.

The consolidated issue for resolution remains whether the CA erred in affirming the RTC’s decision regarding Hutama’s liability to KCD.