G.R. No. 199539, August 09, 2023.
SIOLAND DEVELOPMENT CORPORATION, AS REPRESENTED BY CEO ELIZABETH SIO, PETITIONER, VS. FAIR DISTRIBUTION CENTER CORPORATION, REPRESENTED BY ESTEBAN L. ALBA, JR., RESPONDENT.

FACTS

Respondent Fair Distribution Center Corporation filed a Complaint for Collection of Sum of Money against petitioner Sioland Development Corporation before the Regional Trial Court (RTC) for unpaid accounts amounting to ₱800,894.27. Petitioner received the summons on September 29, 2008. It filed motions for extension of time to file an Answer, which the RTC granted for two extensions, setting a final deadline of November 8, 2008. Petitioner filed a third motion for extension, which the RTC did not act upon, and instead filed its Answer on November 19, 2008. Respondent moved to declare petitioner in default, which the RTC granted. The RTC proceeded with an ex parte reception of respondent’s evidence and rendered a Decision on April 14, 2009, ordering petitioner to pay the principal amount plus legal interest, attorney’s fees, and costs. Petitioner filed a Motion for New Trial/Reconsideration, which was denied. On appeal, the Court of Appeals (CA) set aside the RTC Decision for failing to comply with Section 14, Article VIII of the 1987 Constitution, which requires decisions to state clearly the facts and the law on which they are based. Instead of remanding the case, the CA resolved it on the merits, upheld petitioner’s liability for the principal amount and legal interest, but deleted the award of attorney’s fees. Petitioner filed a Partial Motion for Reconsideration, which was denied, leading to this Petition for Review on Certiorari.

ISSUE

Whether the Court of Appeals erred in: (A) denying petitioner’s motion for partial reconsideration and not setting aside its ruling; (B) rendering a new judgment without complying with Section 14, Article VIII of the Constitution and Section 1, Rule 36 of the Rules of Civil Procedure; and (C) not remanding the case to the RTC for further proceedings and reception of petitioner’s evidence.

RULING

The Supreme Court denied the petition. It held that the CA correctly set aside the RTC Decision for its failure to state the facts and the law, as it merely summarized the complaint and evidence without any legal analysis. The CA, however, properly exercised its appellate jurisdiction to review the case on the merits instead of remanding it, to avoid further delay. The CA’s Decision complied with constitutional and procedural requirements, as it thoroughly discussed the evidence (testimonies and documents proving the debt and non-payment) and applied the relevant law on obligations and contracts. The Court also found no error in the CA’s affirmation of the RTC’s order declaring petitioner in default, as the Answer was filed beyond the granted extensions. Petitioner’s claim of excusable negligence was unsubstantiated. Finally, the CA correctly deleted the award of attorney’s fees due to lack of justification. The Supreme Court modified the interest rate, imposing legal interest at 6% per annum from September 8, 2008 (date of demand) until June 30, 2013, and 6% per annum from July 1, 2013 until full payment.