SECOND
DIVISION
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PHILIPPINE
BANK OF COMMUNICATIONS, Petitioner, - versus - SPOUSES
JOSE C. GO and
ELVY T. GO,
Respondents. |
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G.R.
No. 175514 Present: CARPIO,
J., Chairperson, NACHURA, PERALTA,
ABAD,
and MENDOZA,
JJ.
Promulgated: February 14, 2011 |
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D E C I S I O N
MENDOZA, J.:
This
is a petition for review on certiorari under Rule 45 filed by petitioner
Philippine Bank of Communications (PBCom) seeking to set aside the
July 28, 2006 Decision,[1]
and the November 27, 2006 Resolution[2]
of the Court of Appeals (CA) in CA G.R. CV No. 77714. The
CA decision reversed and set aside the
THE FACTS
On
P17,982,222.22 for the first loan, and P80
million for the second loan, within a ten-year period from September 30, 1999
to September 30, 2009.[3]
To
secure the two loans, Go executed two (2) pledge agreements, both dated P27,827,122.22, was to secure payment of the first
loan, while the second pledge, valued at P70,155,100.00, was to secure
the second loan.[4]
Two
years later, however, the market value of the said shares of stock plunged to
less than P0.04 per share. Thus,
PBCom, as pledgee, notified Go in writing on
Later,
PBCom filed before the RTC a complaint[6]
for sum of money with prayer for a writ of preliminary attachment against Go
and his wife, Elvy T. Go (Spouses Go),
docketed as Civil Case No. 01-101190. PBCom
alleged that Spouses Go defaulted on the two (2) promissory notes, having paid
only three (3) installments on interest payments—covering the months of
September, November and December 1999. Consequently, the entire balance of the
obligations of Go became immediately due and demandable. PBCom made repeated
demands upon Spouses Go for the payment of said obligations, but the couple
imposed conditions on the payment, such as the lifting of garnishment effected
by the Bangko Sentral ng Pilipinas (BSP) on Go’s accounts.[7]
Spouses
Go filed their Answer with Counterclaim[8]
denying the material allegations in the complaint and stating, among other
matters, that:
8.
The
promissory note referred to in the complaint expressly state that the loan
obligation is payable within the period of ten (10) years. Thus, from the
execution date of
In conditional
obligations, the acquisition of rights, as well as the extinguishment or loss
of those already acquired, shall depend upon the happening of the event which
constitutes the condition. (Article 1181, New Civil Code)
9.
Contrary
to the plaintiff’s proferrence, defendant Jose C. Go had made substantial
payments in terms of his monthly payments. There is, therefore, a need to do
some accounting works (sic) to reconcile the records of both parties.
10.
While
demand is a necessary requirement to consider the defendant to be in
delay/default, such has not been complied with by the plaintiff since the
former is not aware of any demand made to him by the latter for the settlement
of the whole obligation.
11.
Undeniably,
at the time the pledge of the shares of stock were executed, their total value
is more than the amount of the loan or at the very least, equal to it. Thus,
plaintiff was fully secured insofar as its exposure is concerned.
12.
And
even assuming without conceding, that the present value of said shares x x x
went down, it cannot be considered as something permanent since the prices of
stocks in the market either increases (sic) or decreases (sic) depending on the
market forces. Thus, it is highly speculative for the plaintiff to consider
said shares to have suffered tremendous decrease in its value. More so, it is
unfair for the plaintiff to renounce or abandon the pledge agreements.
On
I.
MATERIAL
AVERMENTS OF THE COMPLAINT ADMITTED BY DEFENDANT-SPOUSES IN THEIR ANSWER TO
OBVIATE THE NECESSITY OF TRIAL
II.
NO
REAL DEFENSES AND NO GENUINE ISSUES AS TO ANY MATERIAL FACT WERE TENDERED BY
THE DEFENDANT-SPOUSES IN THEIR ANSWER
III.
PLANTIFF’S
CAUSES OF ACTIONS ARE SUPPORTED BY VOLUNTARY ADMISSIONS AND AUTHENTIC DOCUMENTS
WHICH MAY NOT BE CONTRADICTED.[10]
PBCom contended that the Answer interposed no specific
denials on the material averments in paragraphs 8 to 11 of the complaint such
as the fact of default, the entire amount being already due and demandable by
reason of default, and the fact that the bank had made repeated demands for the
payment of the obligations.[11]
Spouses Go opposed the motion for summary judgment arguing
that they had tendered genuine factual issues calling for the presentation of
evidence.[12]
The RTC granted PBCom’s motion in its Judgment[13]
dated
WHEREFORE, in view of
all the foregoing, judgment is rendered for the plaintiff and against the
defendants ordering them to pay plaintiff jointly and severally the following:
1. The total amount of P117,567,779.75,
plus interests and penalties as stipulated in the two promissory notes;
2. A sum equivalent to 10%
of the amount involved in this case, by way of attorney’s fees; and
3. The costs of suit.
SO ORDERED.[14]
Spouses Go moved for a reconsideration but the motion was
denied in an order[15]
dated
RULING OF THE COURT OF
APPEALS
In its Decision dated
WHEREFORE, premises considered,
the assailed judgment of the Regional Trial Court, Branch 42 of Manila in Civil
Case No. 01-101190 is hereby REVERSED and SET ASIDE, and a new one entered
denying plaintiff-appellee’s motion for summary judgment. Accordingly, the
records of the case are hereby remanded to the court of origin for trial on the
merits.
SO ORDERED.[16]
The CA could not agree with the conclusion of the RTC that Spouses
Go admitted paragraphs 3, 4 and 7 of the complaint. It found the supposed admission to be
insufficient to justify a rendition of summary judgment in the case for sum of
money, since there were other allegations and defenses put up by Spouses Go in their
Answer which raised genuine issues on the material facts in the action.[17]
The CA agreed with Spouses Go that paragraphs 3 and 4 of
the complaint merely dwelt on the fact that a contract of loan was entered into
by the parties, while paragraph 7 simply emphasized the terms of the promissory
notes executed by Go in favor of PBCom. The
fact of default, the amount of the outstanding obligation, and the existence of
a prior demand, which were all material to PBCom’s claim, were “hardly
admitted”[18]
by Spouses Go in their Answer and were, in fact, effectively questioned in the
other allegations in the Answer.[19]
PBCom’s motion for reconsideration was denied in a
resolution[20]
dated
Thus, this petition for review.
THE ISSUES
I
WHETHER THE COURT OF APPEALS
ERRED OR ACTED IN GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK, OR EXCESS OF
JURISDICTION IN RULING THAT THERE EXISTS A GENUINE ISSUE AS TO MATERIAL FACTS
IN THE ACTION IN SPITE OF THE UNEQUIVOCAL ADMISSIONS MADE IN THE PLEADINGS BY
RESPONDENTS; AND
II
WHETHER THE COURT OF APPEALS
ERRED OR ACTED IN GRAVE ABUSE OF JURISDICTION [DISCRETION] IN HOLDING THAT
ISSUES WERE RAISED ABOUT THE FACT OF DEFAULT, THE AMOUNT OF THE OBLIGATION, AND
THE EXISTENCE OF PRIOR DEMAND, EVEN WHEN THE PLEADING CLEARLY POINTS TO THE
CONTRARY.
Petitioner PBCom’s
Position: Summary judgment was proper, as there were no genuine issues raised
as to any material fact.
PBCom
argues that the material averments in the complaint categorically admitted by Spouses
Go obviated the necessity of trial. In their Answer, Spouses Go admitted the
allegations in paragraphs 3 and 4 of the Complaint pertaining to the security
for the loans and the due execution of the promissory notes,[21]
and those in paragraph 7 which set forth the acceleration clauses in the promissory
note. Their denial of paragraph 5 of the
Complaint pertaining to the Schedules of Payment for the liquidation of the two
promissory notes did not constitute a specific denial required by the Rules.[22]
Even
in the Comment[23]
of Spouses Go, the clear, categorical and unequivocal admission of paragraphs
3, 4, and 7 of the Complaint had been conceded.[24]
PBCom
faults the CA for having formulated non-existent issues pertaining to the fact
of default, the amount of outstanding obligation and the existence of prior
demand, none of which is borne by the pleadings or the records.[25]
The
Spouses Go, PBCom argues, cannot negate or override the legal effect of the
acceleration clauses embodied in each of the two promissory notes executed by
Go. Moreover, the non-payment of arrearages constituting default was admitted
by Go in his letters to PBCom dated March 3 and
Further,
PBCom claims that its causes of action are supported by authentic documents and
voluntary admissions which cannot be contradicted. It cites the March 3 and
Respondent spouses’
position: Summary judgment was not proper.
The
core contention of Spouses Go is that summary judgment was not proper under the
attendant circumstances, as there exist genuine issues with respect to the fact
of default, the amount of the outstanding obligation, and the existence of
prior demand, which were duly questioned in the special and affirmative
defenses set forth in the Answer. Spouses
Go agree with the CA that the admissions in the pleadings pertained to the
highlight of the terms of the contract. Such
admissions merely recognized the existence of the contract of loan and
emphasized its terms and conditions.[30]
Moreover, although they admitted
paragraphs 3, 4, and 7, the special and affirmative defenses contained in the
Answer tendered genuine issues which could only be resolved in a full-blown
trial.[31]
On
the matter of specific denial, Spouses Go posit that the Court decisions cited
by PBCom[32]
do not apply on all fours in this case.
Moreover, the substance of the repayment schedule was not set forth in
the complaint. It, therefore, follows that the act of attaching copies to the
complaint is insufficient to secure an implied admission. Assuming arguendo that it was impliedly
admitted, the existence of said schedule and the promissory notes would not
immediately make private respondents liable for the amount claimed by PBCom.[33]
Before respondents may be held liable, it must be established, first, that they
indeed defaulted; and second, that the obligations has remained outstanding.[34]
Spouses
Go also state that although they admitted paragraphs 3, 4 and 7 of the
Complaint, the fact of default, the amount of outstanding obligation and the
existence of prior demand were fully questioned in the special and affirmative
defenses.[35]
RULING OF THE COURT
The Court agrees with the CA that “[t]he
supposed admission of defendants-appellants on the x x x allegations in the
complaint is clearly not sufficient to justify the rendition of summary
judgment in the case for sum of money, considering that there are other
allegations embodied and defenses raised by the defendants-appellants in their
answer which raise a genuine issue as to the material facts in the action.”[36]
The CA correctly ruled that there
exist genuine issues as to three material facts, which have to be addressed
during trial: first, the fact of default; second, the amount of
the outstanding obligation, and third, the existence of prior demand.
Under
the Rules, following the filing of pleadings, if, on motion of a party and
after hearing, the pleadings, supporting affidavits, depositions and admissions
on file show that, “except as to the amount of damages, there is no genuine
issue as to any material fact, and that the moving party is entitled to a
judgment as a matter of law,”[37]
summary judgment may be rendered. This rule
was expounded in Asian Construction and Development Corporation v.
Philippine Commercial International Bank,[38]
where it was written:
Under Rule 35 of the 1997 Rules of Procedure,
as amended, except as to the amount of damages, when there is no genuine issue
as to any material fact and the moving party is entitled to a judgment as a
matter of law, summary judgment may be allowed.[39] Summary
or accelerated judgment is a procedural technique aimed at weeding out sham
claims or defenses at an early stage of litigation thereby avoiding the expense
and loss of time involved in a trial.[40]
Under the Rules, summary judgment is
appropriate when there are no genuine issues of fact which call for the
presentation of evidence in a full-blown trial. Even if on their face the
pleadings appear to raise issues, when the affidavits, depositions and
admissions show that such issues are not genuine, then summary judgment as
prescribed by the Rules must ensue as a matter of law. The determinative
factor, therefore, in a motion for summary judgment, is the presence or absence
of a genuine issue as to any material fact.
A “genuine
issue” is an issue of fact which requires the presentation of evidence as
distinguished from a sham, fictitious, contrived or false claim. When the facts
as pleaded appear uncontested or undisputed, then there is no real or genuine
issue or question as to the facts, and summary judgment is called for. The party
who moves for summary judgment has the burden of demonstrating clearly the
absence of any genuine issue of fact, or that the issue posed in the complaint
is patently unsubstantial so as not to constitute a genuine issue for trial. Trial courts have limited authority to render
summary judgments and may do so only when there is clearly no genuine issue as
to any material fact. When the facts as pleaded by the parties are disputed
or contested, proceedings for summary judgment cannot take the place of trial.[41]
(Underscoring supplied.)
Juxtaposing the Complaint and the
Answer discloses that the material facts here are not undisputed so as
to call for the rendition of a summary judgment. While the denials of Spouses Go
could have been phrased more strongly or more emphatically, and the Answer more
coherently and logically structured in order to overthrow any shadow of doubt
that such denials were indeed made, the pleadings show that they did in fact
raise material issues that have to be addressed and threshed out in a full-blown
trial.
PBCom
anchors its arguments on the alleged implied admission by Spouses Go resulting
from their failure to specifically deny the material allegations in the
Complaint, citing as precedent Philippine Bank of Communications v. Court of
Appeals,[42]
and Morales v. Court of Appeals. Spouses Go, on the other hand, argue
that although admissions were made in the Answer, the special and affirmative
defenses contained therein tendered genuine issues.
Under the Rules, every pleading must
contain, in a methodical and logical form, a plain, concise and direct
statement of the ultimate facts on which the party pleading relies for his
claim or defense, as the case may be, omitting the statement of mere
evidentiary facts.[43]
To specifically deny a material
allegation, a defendant must specify each material allegation of fact the truth
of which he does not admit, and whenever practicable, shall set forth the
substance of the matters upon which he relies to support his denial. Where a
defendant desires to deny only a part of an averment, he shall specify so much
of it as is true and material and shall deny only the remainder. Where a
defendant is without knowledge or information sufficient to form a belief as to
the truth of a material averment made in the complaint, he shall so state, and
this shall have the effect of a denial.[44]
Rule 8, Section 10 of the Rules of
Civil Procedure contemplates three (3) modes of specific denial, namely: 1) by
specifying each material allegation of the fact in the complaint, the truth of
which the defendant does not admit, and whenever practicable, setting forth the
substance of the matters which he will rely upon to support his denial; (2) by
specifying so much of an averment in the complaint as is true and material and
denying only the remainder; (3) by stating that the defendant is without
knowledge or information sufficient to form a belief as to the truth of a
material averment in the complaint, which has the effect of a denial.[45]
The purpose of requiring the defendant
to make a specific denial is to make him disclose the matters alleged in the
complaint which he succinctly intends to disprove at the trial, together with
the matter which he relied upon to support the denial. The parties are
compelled to lay their cards on the table.[46]
Again, in drafting pleadings, members
of the bar are enjoined to be clear and concise in their language, and to be
organized and logical in their composition and structure in order to set forth
their statements of fact and arguments of law in the most readily
comprehensible manner possible. Failing such standard, allegations made in
pleadings are not to be taken as stand-alone catchphrases in the interest of
accuracy. They must be contextualized and interpreted in relation to the rest
of the statements in the pleading.
In Spouses Gaza v. Lim, the
Court ruled that the CA erred in declaring that the petitioners therein impliedly
admitted respondents' allegation that they had prior and continuous possession
of the property, as petitioners did in fact enumerate their special and
affirmative defenses in their Answer.
They also specified therein each allegation in the complaint being denied by
them. The Court therein stated:
The Court of Appeals held that
spouses
xxx
xxx
xxx
2.
That plaintiffs are the actual and joint occupants and in prior continuous
physical possession since 1975 up to
A
certain parcel of land situated in Bo. Sta. Maria, Calauag, Quezon. Bounded on
the N., & E., by Julian de Claro; on the W., by Luis Urrutia. Containing an
area of 5,270 square meters, more or less. Declared under Ramon J. Lim's Tax
Dec. No. 4576 with an Ass. Value of P26,100.00
3.
That plaintiffs have been using the premises mentioned for combined lumber and
copra business. Copies of plaintiffs' Lumber Certificate of Registration No.
2490 and PCA Copra Business Registration No. 6265/76 are hereto attached as
Annexes "A" and "B" respectively; the Mayor's unnumbered
copra dealer's permit dated
xxx
xxx
xxx
5.
That defendants' invasion of plaintiffs' premises was accomplished illegally by
detaining plaintiffs' caretaker Emilio Herrera and his daughter inside the
compound, then proceeded to saw the chain that held plaintiffs' padlock on the
main gate of the compound and then busted or destroyed the padlock that closes
the backyard gate or exit. Later, they forcibly opened the lock in the upstairs
room of plaintiff Agnes J. Lim's quarters and defendants immediately filled it
with other occupants now. Copy of the caretaker's (Emilio Herrera) statement
describing in detail is hereto attached as Annex "D";
xxx
xxx
xxx.7
The Court of Appeals then
concluded that since petitioners did not deny specifically in their answer the
above-quoted allegations in the complaint, they judicially admitted that Ramon
and Agnes Lim, respondents, "were in prior physical possession of the
subject property, and the action for forcible entry which they filed against
private respondents (spouses
We observe that the Court
of Appeals failed to consider paragraph 2 of petitioners' answer quoted as
follows:
2. That defendants
specifically deny the allegations in paragraph 2 and 3 of the complaint for
want of knowledge or information sufficient to form a belief as to the truth
thereof, the truth of the matter being those alleged in the special and
affirmative defenses of the defendants;"8
Clearly, petitioners
specifically denied the allegations contained in paragraphs 2 and 3 of the
complaint that respondents have prior and continuous possession of the disputed
property which they used for their lumber and copra business. Petitioners did not
merely allege they have no knowledge or information sufficient to form a belief
as to truth of those allegations in the complaint, but added the following:
SPECIAL AND AFFIRMATIVE
DEFENSES
That defendants hereby
reiterate, incorporate and restate the foregoing and further allege:
5. That the complaint states
no cause of action;
"From the allegations of
plaintiffs, it appears that their possession of the subject property was not
supported by any concrete title or right, nowhere in the complaint that they alleged
either as an owner or lessee, hence, the alleged possession of plaintiffs is
questionable from all aspects. Defendants Sps. Napoleon Gaza and Evelyn Gaza
being the registered owner of the subject property has all the right to enjoy
the same, to use it, as an owner and in support thereof, a copy of the transfer
certificate of title No. T-47263 is hereto attached and marked as Annex
"A-Gaza" and a copy of the Declaration of Real Property is likewise
attached and marked as Annex "B-Gaza" to form an integral part
hereof;
6. That considering that the
above-entitled case is an ejectment case, and considering further that the
complaint did not state or there is no showing that the matter was referred to
a Lupon for conciliation under the provisions of P.D. No. 1508, the Revised
Rule on Summary Procedure of 1991, particularly Section 18 thereof provides
that such a failure is jurisdictional, hence subject to dismissal;
7. That the Honorable Court
has no jurisdiction over the subject of the action or suit;
The complaint is for forcible
entry and the plaintiffs were praying for indemnification in the sum of P350,000.00
for those copra, lumber, tools, and machinery listed in par. 4 of the complaint
and P100,000.00 for unrealized income in the use of the establishment,
considering the foregoing amounts not to be rentals, Section 1 A (1) and (2) of
the Revised Rule on Summary Procedure prohibits recovery of the same, hence,
the Honorable Court can not acquire jurisdiction over the same. Besides, the
defendants Napoleon Gaza and Evelyn Gaza being the owners of those properties
cited in par. 4 of the complaint except for those copra and two (2) live
carabaos outside of the subject premises, plaintiffs have no rights whatsoever
in claiming damages that it may suffer, as and by way of proof of ownership of
said properties cited in paragraph 4 of the complaint attached herewith are
bunche[s] of documents to form an integral part hereof;
8. That plaintiffs' allegation
that Emilio Herrera was illegally detained together with his daughter was not
true and in support thereof, attached herewith is a copy of said Herrera's
statement and marked as Annex "C-Gaza."
xxx
xxx xxx.9
The above-quoted paragraph 2
and Special and Affirmative Defenses contained in petitioners' answer glaringly
show that petitioners did not admit impliedly that respondents have been in
prior and actual physical possession of the property. Actually, petitioners are
repudiating vehemently respondents' possession, stressing that they (petitioners)
are the registered owners and lawful occupants thereof.
Respondents' reliance on Warner
Barnes and Co., Ltd. v. Reyes10 in maintaining that petitioners
made an implied admission in their answer is misplaced. In the cited case, the
defendants' answer merely alleged that they were "without knowledge or
information sufficient to form a belief as to the truth of the material
averments of the remainder of the complaint" and "that they hereby
reserve the right to present an amended answer with special defenses and
counterclaim."11 In the instant case, petitioners enumerated
their special and affirmative defenses in
their answer. They also specified therein each
allegation in the complaint being denied by them. They particularly alleged they are the
registered owners and lawful possessors of the land and denied having wrested
possession of the premises from the respondents through force, intimidation,
threat, strategy and stealth. They asserted that respondents' purported
possession is "questionable from all aspects." They also averred that
they own all the personal properties enumerated in respondents' complaint,
except the two carabaos. Indeed, nowhere in the answer can we discern an
implied admission of the allegations of the complaint, specifically the allegation
that petitioners have priority of possession.
Thus, the Court of Appeals
erred in declaring that herein petitioners impliedly admitted respondents'
allegation that they have prior and continuous possession of the property.[47]
(Underscoring supplied.)
In this case, as in Gaza, the
admissions made by Spouses Go are to be read and taken together with the rest
of the allegations made in the Answer, including the special and affirmative
defenses.
For instance, on the fact of default,
PBCom alleges in paragraph 8 of the Complaint that Go defaulted in the payment
for both promissory notes, having paid only three interest installments
covering the months of September, November, and December 1999.
In paragraph 6 of the Answer, Spouses
Go denied the said allegation, and further alleged in paragraphs 8 to 13 that Go
made substantial payments on his monthly loan amortizations.
The portions of the pleadings referred
to are juxtaposed below:
|
Complaint |
Answer |
|
8. The defendant defaulted in the payment of
the obligations on the two (2) promissory notes (Annexes “A” and “B” hereof)
as he has paid only three (3) installments on interests (sic) payments
covering the months of September, November and December, 1999, on both
promissory notes, respectively. As a consequence of the default, the entire
balance due on the obligations of the defendant to plaintiff on both
promissory notes immediately became due and demandable pursuant to the terms
and conditions embodied in the two (2) promissory notes;[48] |
6. Defendants deny the allegations in
paragraphs 8, 9, 10 and 11 of the Complaint; x x x 8.
The promissory notes referred to in the complaint expressly state that the
loan obligation is payable within the period of ten (10) years. Thus, from
the execution date of In conditional obligations, the
acquisition of rights, as well as the extinguishment or loss of those already
acquired, shall depend upon the happening of the event which constitutes the
condition. (Article 1181, New Civil Code) 9.
Contrary to the plaintiff’s preference, defendant Jose C. Go has made substantial
payments in terms of his monthly payments. There is therefore, a need to do
some accounting works (sic) just to reconcile the records of both parties. 10.
While demand is a necessary requirement to consider the defendant to be in
delay/default, such has not been complied with by the plaintiff since the
former is not aware of any demand made to him by the latter for the
settlement of the whole obligation. 11.
Undeniably, at the time the pledge of the shares of stocks were executed,
their total value is more than the amount of the loan, or at the very least,
equal to it. Thus, plaintiff was fully secured insofar as its exposure is
concerned.[49] 12.
And even assuming without conceding, that the present value of said shares
has went (sic) down, it cannot be considered as something permanent since,
the prices of stocks in the market either increases (sic) or (sic) decreases
depending on the market forces. Thus, it is highly speculative for the
plaintiff to consider said shares to have suffered tremendous decrease in its
value. Moreso (sic), it is unfair for the plaintiff to renounce or abandon
the pledge agreements. 13.
As aptly stated, it is not aware of any termination of the pledge agreement
initiated by the plaintiff. |
Moreover, in paragraph 10 of the Answer,
Spouses Go also denied the existence of prior demand alleged by PBCom in
paragraph 10 of the Complaint. They stated therein that they were not aware of
any demand made by PBCom for the settlement of the whole obligation. Both
sections are quoted below:
|
Complaint |
Answer |
|
10.
Plaintiff made repeated demands from (sic) defendant for the payment of the
obligations which the latter acknowledged to have incurred however, defendant
imposed conditions such as [that] his [effecting] payments shall depend upon
the lifting of garnishment effected by the Bangko Sentral on his accounts.
Photocopies of defendant’s communication dated March 3, 2000 and April 7,
2000, with plaintiff are hereto attached as Annexes “F” and “G”
hereof, as well as its demand to pay dated April 18, 2000. Demand by
plaintiff is hereto attached as Annex “H” hereof.[50]
[Emphases supplied] |
10.
While demand is a necessary requirement to consider the defendant to be in
delay/default, such has not been complied with by the plaintiff since the
former is not aware of any demand made to him by the latter for the
settlement of the whole obligation. |
Finally, as to the amount of the outstanding
obligation, PBCom alleged in paragraph 9 of the Complaint that the outstanding
balance on the couples’ obligations as of May 31, 2001 was P21,576,668.64
for the first loan and P95,991,111.11, for the second loan or a total of
P117,567,779.75.
In paragraph 9 of the Answer, however,
Spouses Go, without stating any specific amount, averred that substantial monthly
payments had been made, and there was a need to reconcile the accounting
records of the parties.
|
Complaint |
Answer |
|
9.
Defendants’ outstanding obligations under the two (2) promissory notes as of |
9.
Contrary to the plaintiff’s preference, defendant Jose C. Go has made
substantial payments in terms of his monthly payments. There is therefore, a
need to do some accounting works just to reconcile the records of both
parties.[52] |
Clearly then, when taken within the
context of the entirety of the pleading, it becomes apparent that there was no
implied admission and that there were indeed genuine issues to be addressed.
As to the attached
The letter
dated
Notably,
the trial court even agreed with the defendant-appellants on the following
points:
The
alleged default and outstanding obligations are based on the Statement of
Account. This Court agrees with the defendants that since the substance of the
document was not set forth in the complaint although a copy thereof was
attached thereto, or the said document was not set forth verbatim in the
pleading, the rule on implied admission does not apply.[53]
It must also be pointed out that the
cases cited by PBCom do not apply to this case. Those two cases involve denial
of lack of knowledge of facts “so plainly and necessarily within [the knowledge
of the party making such denial] that such averment of ignorance must be
palpably untrue.”[54]
Also, in both cases, the documents denied were the same documents or deeds sued
upon or made the basis of, and attached to, the complaint.
In Philippine Bank of
Communications v. Court of Appeals,[55]
the Court ruled that the defendant’s contention that it had no truth or
information sufficient to form a belief as to the truth of the deed of exchange
was an invalid or ineffectual denial pursuant to the Rules of Court,[56]
as it could have easily asserted whether or not it had executed the deed of
exchange attached to the petition.
Citing Capitol Motors Corporations v. Yabut,[57]
the Court stated that:
x x x The
rule authorizing an answer to the effect that the defendant has no knowledge or
information sufficient to form a belief as to the truth of an averment and
giving such answer the effect of a denial, does not apply where the fact as to
which want of knowledge is asserted, is so plainly and necessarily within the
defendant’s knowledge that his averment of ignorance must be palpably untrue.[58]
The Warner Barnes case cited
above sprung from a suit for foreclosure of mortgage, where the document that
defendant denied was the deed of mortgage sued upon and attached to the
complaint. The Court then ruled that it would have been easy for the defendants
to specifically allege in their answer whether or not they had executed the
alleged mortgage.
Similarly, in Capitol Motors,
the document denied was the promissory note sued upon and attached to the
complaint. In said case, the Court ruled
that although a statement of lack of knowledge or information sufficient to
form a belief as to the truth of a material averment in the complaint was one
of the modes of specific denial contemplated under the Rules, paragraph 2 of
the Answer in the said case was insufficient to constitute a specific denial.[59]
Following the ruling in the Warner Barnes case, the Court held that it
would have been easy for defendant to specifically allege in the Answer whether
or not it had executed the promissory note attached to the Complaint.[60]
In Morales v. Court of Appeals,[61]
the
matter denied was intervenor’s knowledge of the plaintiff’s having claimed
ownership of the vehicle in contention. The Court therein stated:
Yet,
despite the specific allegation as against him, petitioner, in his Answer in
Intervention with Counterclaim and Crossclaim, answered the aforesaid paragraph
11, and other paragraphs, merely by saying that “he has no knowledge or
information sufficient to form a belief as to its truth.” While it may be true
that under the Rules one could avail of this statement as a means of a specific
denial, nevertheless, if an allegation directly and specifically charges a
party to have done, performed or committed a particular act, but the latter had
not in fact done, performed or committed it, a categorical and express denial
must be made. In such a case, the occurrence or non-occurrence of the facts
alleged may be said to be within the party’s knowledge. In short, the
petitioner herein could have simply expressly and in no uncertain terms denied
the allegation if it were untrue. It has been held that when the matters of
which a defendant alleges of having no knowledge or information sufficient to
form a belief, are plainly and necessarily within his knowledge, his alleged
ignorance or lack of information will not be considered as specific denial. His
denial lacks the element of sincerity and good faith, hence, insufficient.[62]
Borrowing the phraseology of the Court
in the Capitol Motors case, clearly, the fact of the parties’ having
executed the very documents sued upon, that is, the deed of exchange, deed or
mortgage or promissory note, is so plainly and necessarily within the knowledge
of the denying parties that any averment of ignorance as to such fact must be
palpably untrue.
In this case, however, Spouses Go are
not disclaiming knowledge of the transaction or the execution of the promissory
notes or the pledge agreements sued upon. The matters in contention are, as the
CA stated, whether or not respondents were in default, whether there was prior
demand, and the amount of the outstanding loan. These are the matters that the
parties disagree on and by which reason they set forth vastly different
allegations in their pleadings which each will have to prove by presenting
relevant and admissible evidence during trial.
Furthermore,
in stark contrast to the cited cases where one of the parties disclaimed
knowledge of something so patently within his knowledge, in this case,
respondents Spouses Go categorically stated in the Answer that there was no
prior demand, that they were not in default, and that the amount of the outstanding
loan would have to be ascertained based on official records.
WHEREFORE,
the petition is DENIED.
SO
ORDERED.
JOSE CATRAL
Associate Justice
WE CONCUR:
ANTONIO T.
CARPIO
Associate Justice
Chairperson
ANTONIO
EDUARDO B. NACHURA DIOSDADO M.
PERALTA
Associate
Justice Associate Justice
ROBERTO A. ABAD
Associate
Justice
A T T E S T A T
I O N
I attest that the conclusions in the
above Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
ANTONIO T.
CARPIO
Associate
Justice
Chairperson, Second Division
C E R T I F I C
A T I O N
Pursuant to Section 13, Article VIII of the
Constitution and the Division Chairperson’s Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.
RENATO C. CORONA
Chief Justice
[1] Rollo, pp. 33-42.
[2] Id. at 44-45.
[3] Id. at 34.
[4] Id.
[5] Id.
[6]
[7] Id. at 35.
[8]
[9] Id. at 64.
[10] Id.
[11] Id. at 36.
[12] Id.
[13] Id. at 80-86.
[14] Id. at 86.
[15] Id. at 37.
[16]
[17] Id. at 39.
[18]
[19] Id. at 39-40.
[20]
[21] Id. at 236.
[22] Id. at 237
[23]
[24] Id. at 240.
[25] Id. at 241.
[26]
[27] Article 1198 of the Civil Code provides: “The debtor shall
lose every right to make use of the period:
(1)
When after the obligation has been contracted, he becomes insolvent, unless he
gives a guaranty or security for the debt;
(2)
When he does not furnish to the creditor the guaranties or securities which he
has promised;
(3)
When by his own acts he has impaired said guaranties or securities after their
establishment, and when through a fortuitous event they disappear, unless he
immediately gives new ones equally satisfactory;
(4)
When the debtor violates any undertaking, in consideration of which the
creditor agreed to the period;
(5)
When the debtor attempts to abscond.”
[28] Rollo, pp. 242-243.
[29] Id. at 244.
[30] Id. at 210.
[31] Id. at 211.
[32] Philippine
Bank of Communications v. Court of Appeals, G.R. No. 92067, March 22, 1991,
195 SCRA 567 and Morales v. Court of Appeals, 274 Phil.674 (1991).
[33] Rollo, p. 215.
[34] Id.
[35] Id. at 213.
[36] Id. at 39.
[37] Rule 35, Rules of Civil
Procedure.
[38] G.R. No. 153827,
[39] Citing Northwest
Airlines v. CA,
348 Phil. 438, 449 (1998).
[40] Citing Excelsa
Industries, Inc, v. CA, 317 Phil. 664, 671 (1995).
[41] Supra note 38
at 202-203, citing Evadel Realty and Development Corporation v. Soriano, 409 Phil. 450,
461 (2001).
[42] G.R. No. 92067,
[43] Section 1, Rule 8, Rules of Civil Procedure.
[44] Section 10, Rule 8, Rules of
Civil Procedure.
[45] Spouses
[46] Aquintey v. Tibong, G.R. No. 166704,
[47] Supra note 45.
[48] Rollo, p. 50.
[49]
[50] Id. at 50.
[51]
[52]
[53]
[54] Warner
Barnes & Co., Ltd. v. Reyes, 103 Phil. 662, 665 (1958), citing Icle
Plant Equipment Co. v. Marcello, D.C. Pa. 1941, 43 F. Supp. 281.
[55] Philippine Bank
of Communications v. Court of Appeals, supra note 32.
[56]
[57]
[58]
[59]
[60]
[61] 274 Phil. 674,
686 (1991).
[62]