G.R. No. 190957 - Philippine National Construction Corp. vs. APAC Marketing Corp.

The case arose from a simple purchase transaction involving crushed basalt rock between the defendant-appellant Philippine National Construction Corporation (PNCC), represented by Rogelio Espiritu and Rolando Macasaet, and the plaintiff-appellee APAC Marketing Corporation, represented by Cesar M. Ong, Jr.
Initially, there was an agreement whereby PNCC would purchase quality aggregates from APAC, with terms to be determined by issuing a check “before delivery.”
Before implementing the agreed payment method, PNCC requested a 30‐day term for payment from the delivery date, which APAC accepted.

On August 17, 1999, APAC filed a complaint with the Regional Trial Court (RTC) of Quezon City, Branch 96, asking for collection of money, damages, and other relief, alleging the nonpayment of dues for delivered materials.
The complaint cited:

An initial transaction in March 1998 where PNCC procured the aggregates.
A modified term agreement (30-day payment period) following an earlier “check before delivery” arrangement.
PNCC’s failure to settle its overdue account despite deliveries and repeated demands, with a claim amounting to ₱782,296.80 plus legal interest (at not less than 6% per month) starting from April 1999.

On November 16, 1999, PNCC filed a motion to dismiss, arguing the complaint was premature because it had made partial payments, reducing the overdue balance to ₱474,095.92 per its answer.

During trial, only APAC presented its evidence as PNCC waived its right to present evidence by failing to attend hearings repeatedly.
On July 10, 2006, the RTC rendered a decision ordering:

PNCC to pay ₱782,296.80 as actual damages.
An award of attorney’s fees amounting to ₱50,000.00 plus ₱3,000.00 per court appearance.
Payment of the cost of suit.

PNCC filed a motion for reconsideration, arguing that the principal obligation had been fully paid during the pendency of the case.
On October 6, 2006, the RTC modified its decision by:

On July 9, 2009, the Court of Appeals (CA) in its Special Fourth Division affirmed with modification the RTC decision:

PNCC was ordered to pay legal interest at 6% per annum instead of 12% on the principal amount.
The two individual defendants, Rogelio Espiritu and Rolando Macasaet, were absolved from joint and solidary liability with PNCC.

PNCC then filed a Motion for Reconsideration on July 29, 2009, focusing solely on the propriety of the award of attorney’s fees.
The CA, via a Resolution dated January 18, 2010, denied the Motion for Reconsideration regarding the attorney’s fees award.

Whether the Court of Appeals correctly affirmed the RTC’s award of attorney’s fees in favor of APAC Marketing Corporation.

Whether the factual, legal, and equitable bases provided (or lack thereof) were sufficient to justify awarding attorney’s fees, considering the strict prerequisites under Article 2208 of the New Civil Code.
Whether the RTC and CA’s reliance on the traditional rationale—that APAC was forced to litigate to protect its interests—adequately met the exceptional nature required for such an award.