FACTS:

Petitioner Asian Construction and Development Corp. purchased reinforcing steel bars from respondent Cathay Pacific Steel Corp. On several occasions between June and July of 1997, the purchases amounted to P2,650,916.40. Petitioner made partial payments but still had a balance of P214,704.91. Despite demand letters sent by respondent, petitioner failed to make payment. As a result, respondent filed a complaint for a sum of money and damages with the RTC of Antipolo.

In its answer, petitioner denied authorizing the purchases, claimed no demand for payment was made, alleged non-receipt of invoices and letters, and disputed the amount billed by respondent. Petitioner also denied agreeing to pay interest and attorney's fees.

During the trial, petitioner and its counsel were absent, leading the trial court to grant an ex-parte hearing before a designated commissioner. After the hearing, the trial court rendered a decision in favor of respondent, ordering petitioner to pay the outstanding balance, interest, attorney's fees, and costs of suit.

Petitioner appealed the case to the Court of Appeals (CA), which affirmed the decision with modifications. The CA found a specific amount of interest agreed upon based on the invoices and imposed a 24% interest per annum from the date of extra-judicial demand. Petitioner filed a motion for reconsideration, which was denied. Thus, the present petition for review on certiorari was filed.

ISSUES:

1. Whether the petitioner disputed its liability in its Answer.

2. Whether the delivery receipts and the testimony of the witness are admissible in evidence.

3. Whether the Court of Appeals erred in imposing 24% interest from May 12, 1998 until finality of the decision.

4. Whether the respondent is entitled to attorney's fees.

RULING:

1. The petitioner did not dispute its liability in its Answer. The Court found that the petitioner denied the allegations in the complaint, but it did not specifically deny its liability. Therefore, it is deemed to have admitted its liability.

2. The delivery receipts and the testimony of the witness are admissible in evidence. The Court held that the loss of the delivery receipts was properly established by the respondent, making the photocopies of the delivery receipts admissible as secondary evidence. The witness, who was the vice president of the respondent company, was competent to establish the admissibility of the secondary evidence.

3. The Court of Appeals did not err in imposing 24% interest from May 12, 1998 until finality of the decision. The Court found that there was a specific amount of interest agreed upon based on the invoices, which was 24% per annum. Therefore, the Court of Appeals properly applied this interest rate in the computation of interest.

4. The respondent is entitled to attorney's fees. The Court held that the award of attorney's fees is proper because the respondent was forced to engage the services of counsel and litigate in order to protect its interests.

PRINCIPLES:

• Failure to object to printed stipulations in a contract will bind the parties to its performance, as long as the stipulations are not excessive or unconscionable.

• Secondary evidence, such as photocopies, may be admitted if the loss of the original documents is properly established.

• Interest rates agreed upon by the parties in a contract will be upheld and applied in the computation of interest.

• A party may be awarded attorney's fees if it was constrained to hire legal counsel and litigate in order to protect its interests.