Case Digest (G.R. No. 183804)
Facts:
In S.C. Megaworld Construction and Development Corporation v. Engr. Luis U. Parada, petitioner Megaworld purchased electrical lighting materials from Genlite Industries, a sole proprietorship owned by respondent Engineer Luis U. Parada, for its Read-Rite project in Canlubang, Laguna. When Megaworld failed to pay on the due date, it blamed the delay on its sub-contractor, Enviro Kleen Technologies, Inc. (“Enviro Kleen”), which agreed to settle in Megaworld’s stead and remitted ₱250,000 on June 2, 1999. Enviro Kleen thereafter ceased payments, leaving an outstanding balance of ₱816,627.00. After several unheeded demands, Parada filed Civil Case No. Q-01-45212 in the Regional Trial Court (RTC) of Quezon City, Branch 100, seeking the unpaid balance with 2% monthly interest, 25% attorney’s fees, ₱100,000 litigation expenses and ₱100,000 exemplary damages. The RTC, in its May 28, 2004 decision, ordered Megaworld to pay the principal, 20% monthly interest from judicial demand until fulCase Digest (G.R. No. 183804)
Facts:
- Contract and Purchase
- S.C. Megaworld Construction and Development Corporation (petitioner) purchased electrical lighting materials from Genlite Industries, a sole proprietorship of Engr. Luis U. Parada (respondent), for its Read-Rite project in Laguna.
- Petitioner failed to pay on due date, blaming non-collection from its subcontractor, Enviro Kleen Technologies, Inc. (Enviro Kleen).
- Partial Payment and Outstanding Balance
- Enviro Kleen paid P250,000 to respondent on June 2, 1999.
- Enviro Kleen ceased payments thereafter, leaving an unpaid balance of P816,627 as of January 31, 2001.
- Trial Court Proceedings
- Respondent filed suit in RTC Quezon City (Civil Case No. Q-01-45212) claiming:
- Principal P816,627.00;
- 2% monthly interest;
- 25% attorneys’ fees;
- P100,000 litigation expenses;
- P100,000 exemplary damages.
- Petitioner answered, denying liability and pleading novation by substitution of Enviro Kleen as debtor.
- On May 28, 2004, the RTC rendered judgment in favor of respondent, awarding principal, 20% monthly interest (clerical error), and 25% attorneys’ fees; dismissed petitioner’s counterclaim.
- Court of Appeals Decision
- Petitioner appealed, additionally arguing non-impleader of Genlite Industries and defective verification/non-forum shopping certification.
- CA (April 30, 2008) held:
- Real party in interest issue raised for first time on appeal—barred; respondent as sole proprietor is the real party; no need to implead trade name;
- No novation—letters to Enviro Kleen showed respondent reserved right to pursue petitioner; acceptance of partial payment did not release original debtor;
- Verification and certification formal defects not raised below—waived.
- Motion for reconsideration denied on July 18, 2008.
- Supreme Court Petition
- Petitioner sought review on:
- Invalid verification and non-forum shopping certificate;
- Existence of novation releasing petitioner.
- Respondent’s counsel and substitution of parties after respondent’s death duly recorded.
Issues:
- Verification and Certification
- Is the complaint’s verification and certification against forum shopping a jurisdictional requirement or merely formal, and was its non-compliance fatal when raised for the first time on appeal?
- Novation by Substitution
- Did the acceptance of Enviro Kleen’s partial payment operate as a novation that released the petitioner from its obligation?
- Real Party in Interest
- Must Genlite Industries be impleaded as a separate party-plaintiff despite being a trade name of the respondent?
- Proper Award of Interest and Attorneys’ Fees
- What interest rate is appropriate absent stipulation?
- Is the award of attorneys’ fees supported by findings?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)