G.R. No. 137915; November 15, 2000
NARRA INTEGRATED CORPORATION, petitioner, vs. THE COURT OF APPEALS and NC INDUSTRIAL TRADE, INC., respondents.

FACTS

Petitioner Narra Integrated Corporation contracted respondent NC Industrial Trade, Inc. for three specific projects involving electrical systems, waste water treatment plant equipment, and fabrication/installation of catwalk railings, with corresponding agreed prices. NC Industrial issued sales invoices for the completed work. Narra failed to pay the outstanding balance of P1,485,776.93, prompting NC Industrial to file a complaint for sum of money. In its Answer, Narra admitted the contracts and non-payment but alleged that NC Industrial was a subcontractor whose payment was contingent on Narra first receiving progress payments from the project owner, Kyung-Il Philippines, Inc. Narra claimed it had not been paid by Kyung-Il due to alleged defects and that NC Industrial had agreed to await Narra’s collection from Kyung-Il. Narra also filed a third-party complaint against Kyung-Il.

ISSUE

Whether the trial court correctly rendered a summary judgment in favor of NC Industrial.

RULING

Yes, the summary judgment was proper. A summary judgment is appropriate when, upon the pleadings and supporting documents, no genuine issue as to any material fact exists. Here, Narra’s Answer admitted the material allegations of the complaint: the existence of the contracts, the performance of the work by NC Industrial, and Narra’s failure to pay the stipulated amount. Narra’s defense of a contingent payment arrangement—that its obligation to pay was dependent on its own receipt of payment from Kyung-Il—was legally insufficient to constitute a valid issue for trial. The contracts between Narra and NC Industrial, evidenced by the sales invoices, contained no such condition. Obligations arising from contracts have the force of law between the parties and must be complied with in good faith. A debtor cannot unilaterally impose a condition not agreed upon, such as making payment contingent on a third party’s action. Narra’s separate dispute with Kyung-Il does not affect its direct and absolute obligation to pay NC Industrial for services rendered and accepted. The pendency of the third-party complaint against Kyung-Il was irrelevant to the adjudication of the principal action, as it constituted a separate cause of action. Therefore, with no substantial triable issue raised, the trial court and the Court of Appeals correctly held that a summary judgment was warranted.