FIRST DIVISION
G.R. No. 207970, January 20, 2016
FERNANDO MEDICAL ENTERPRISES, INC., Petitioner, v. WESLEYAN UNIVERSITY PHILIPPINES, INC., Respondent.
D E C I S I O N
BERSAMIN, J.:
The trial court may render a judgment on the pleadings upon motion of the claiming party when the defending party's answer fails to tender an issue, or otherwise admits the material allegations of the adverse party's pleading. For that purpose, only the pleadings of the parties in the action are considered. It is error for the trial court to deny the motion for judgment on the pleadings because the defending party's pleading in another case supposedly tendered an issue of fact.chanRoblesvirtualLawlibrary
- Memorandum of Agreement dated January 9, 2006 for the supply ol' medical equipment in the total amount of P18,625,000.00;3chanroblesvirtuallawlibrary
- Deed of Undertaking dated July 5, 2006 for the installation of medical gas pipeline system valued at P8,500,000.00;4chanroblesvirtuallawlibrary
- Deed of Undertaking dated July 27, 2006 for the supply of one unit of Diamond Select Slice CT and one unit of Diamond Select CV-P costing P65,000,000.00;5 and
- Deed of Undertaking dated February 2, 2007 for the supply of furnishings and equipment worth P32,926,650.00.6
x x x x
2. On January 9, 2006, plaintiff supplied defendant with hospital medical equipment for an in consideration of P18,625,000.00 payable in the following manner: (2.1) For nos. 1 to 9 of items to be sourced from Fernando Medical Equipment, Inc. (FMEI) - 30% down payment of P17,475,000 or P5,242,500 with the balance of PI2,232,500 or 70% payable in 24 equal monthly instalments of P509,687.50 and (2.2.) cash transaction amounting to P1,150,000.00 (2.3) or an initial cash payment of P6,392,500.00 with the remaining balance payable in 24 equal monthly installments every 20th day of each month until paid, as stated in the Memorandum of Agreement, copy of which is hereto attached as Annex "A";
3. On July 5, 2006, plaintiff installed defendants medical gas pipeline system in the latter's hospital building complex for and in consideration of P8,500,000.00 payable upon installation thereof under a Deed of Undertaking, copy of which is hereto attached as Annex "B";
4. On July 27, 2006, plaintiff supplied defendant one (1) unit Diamond Select Slice CT and one (1) unit Diamond Select CV-9 for and in consideration of P65,000,000.00 thirty percent (30%) of which shall be paid as down payment and the balance in 30 equal monthly instalments as provided in that Deed of Undertaking, copy of which is hereto attached as Annex "C";
5. On February 2, 2007, plaintiff supplied defendants hospital furnishings and equipment for an in consideration of P32,926,650.00 twenty percent (20%) of which was to be paid as downpayment and the balance in 30 months under a Deed of Undertaking, copy of which is hereto attached as Annex "D";
6. Defendant's total obligation to plaintiff was P123,901,650.00 as of February 15, 2009, but defendant was able to pay plaintiff the sum of P67,357,683.23 thus leaving a balance P54,654,195.54 which has become overdue and demandable;
7. On February 11, 2009, plaintiff agreed to reduce its claim to only P50,400,000.00 and extended its payment for 36 months provided defendants shall pay the same within 36 months and to issue 36 postdated checks therefor in the amount of P1,400,000.00 each to which defendant agreed under an Agreement, copy of which is hereto attached as Annex "E";
8. Accordingly, defendant issued in favor of plaintiff 36 postdated checks each in the [a]mount of P1,400,000.00 but after four (4) of the said checks in the sum of P5,600,000.00 were honored defendant stopped their payment thus making the entire obligation of defendant due and demandable under the February 11, 2009 agreement;
9. In a letter dated May 27, 2009, defendant claimed that all of the first four (4) agreements may be rescissible and one of them is unenforceable while the Agreement dated February 11, 2009 was without the requisite board approval as it was signed by an agent whose term of office already expired, copy of which letter is hereto attached as Annex "F";
10. Consequently, plaintiff told defendant that if it does not want to honor the February 11, 2009 contract then plaintiff will insists [sic] on its original claim which is P54,654,195.54 and made a demand for the payment thereof within 10 days from receipt of its letter copy of which is hereto attached as Annex "G";
11. Defendant received the aforesaid letter on July 6, 2009 but to date it has not paid plaintiff any amount, either in the first four contracts nor in the February 11, 2009 agreement, hence, the latter was constrained to institute the instant suit and thus incurred attorney's fee equivalent to 10% of the overdue account but only after endeavouring to resolve the dispute amicable and in a spirit of friendship[;]
12. Under the February 11, 2009 agreement the parties agreed to bring all actions or proceedings thereunder or characterized therewith in the City of Manila to the exclusion of other courts and for defendant to pay plaintiff 3% per months of delay without need of demand;13chanroblesvirtuallawlibrary
x x x x
x x x x
2. The allegations in Paragraphs Nos. 2, 3, 4, and 5 of the complaint are ADMITTED subject to the special and affirmative defenses hereafter pleaded;
3. The allegations in Paragraphs Nos. 6, 7 and 8 of the complaint are DENIED for lack of knowledge or information sufficient to form a belief as to the truth or falsity thereof, inasmuch as the alleged transactions were undertaken during the term of office of the past officers of defendant Wesleyan University-Philippines. At any rate, these allegations are subject to the special and affirmative defenses hereafter pleaded;
4. The allegations in Paragraphs Nos. 9 and 10 of the complaint are ADMITTED subject to the special and affirmative defenses hereafter pleaded;
5. The allegations in Paragraphs Nos. 11 and 12 of the complaint are DENIED for being conclusions of law.18chanroblesvirtuallawlibrary
x x x x
At the hearing of the "Motion for Judgment Based on the Pleadings" filed by the plaintiff thru counsel, Atty. Jose MaƱacop on September 28, 2011, the court issued an Order dated October 27, 2011 which read in part as follows:x x x x
Considering that the allegations stated on the Motion for Judgment Based on the Pleadings, are evidentiary in nature, the Court, instead of acting on the same, hereby sets this case for pre-trial, considering that with the Answer and the Reply, issues have been joined.
x x x x
In view therefore of the Order of the Court dated October 27, 2011. let the Motion for Judgment Based on the Pleadings be hereby ordered DENIED on reasons as abovestated and hereto reiterated.
x x x x
SO ORDERED.22chanroblesvirtuallawlibrary
It must be remembered that Private Respondent admitted the existence of the subject contracts, including Petitioner's fulfilment of its obligations under the same, but subjected the said admission to the "special and affirmative defenses" earlier raised in its Motion to Dismiss.
x x x x
Obviously, Private Respondent's special and affirmative defenses are not of such character as to avoid Petitioner's claim. The same special and affirmative defenses have been passed upon by the RTC in its Order dated July 19, 2010 when it denied Private Respondent's Motion to Dismiss. As correctly found by the RTC, Private Respondent's special and affirmative defences of lack of jurisdiction over its person, improper venue, litis pendentia and wilful and deliberate forum shopping are not meritorious and cannot operate to dismiss Petitioner's Complaint. Hence, when Private Respondent subjected its admission to the said defenses, it is as though it raised no defense at all.
Not even is Private Respondent's contention that the rescission case must take precedence over Petitioner's Complaint for Sum of Money tenable. To begin with. Private Respondent had not yet proven that the subject contracts are rescissible. And even if the subject contracts are indeed rescissible, it is well-settled that rescissible contracts are valid contracts until they are rescinded. Since the subject contracts have not yet been rescinded, they are deemed valid contracts which may be enforced in legal contemplation.
In effect, Private Respondent admitted that it entered into the subject contracts and that Petitioner had performed its obligations under the same.
As regards Private Respondent's denial by disavowal of knowledge of the Agreement dated February 11, 2009, We agree with Petitioner that such denial was made in bad faith because such allegations are plainly and necessarily within its knowledge.
In its letter dated May 27, 2009, Private Respondent made reference to the Agreement dated February 11, 2009, viz.:ChanRoblesVirtualawlibrary"The Agreement dated 11 February 2009, in particular, was entered into by an Agent of the University without the requisite authority from the Board of Trustees, and executed when said agent's term of office had already expired. Consequently, such contract is, being an unenforceable contract."Also, Private Respondent averred in page 5 of its Complaint for Rescission, which it attached to its Motion to Dismiss, that:"13. On 6 February 2009, when the terms of office of plaintiffs Board of Trustess chaired by Dominador Cabasal, as well as of Atty. Guillermo C. Maglaya as President, had already expired, thereby rendering them on a hold-over capacity, the said Board once again authorized Atty. Maglaya to enter into another contract with defendant FMEI, whereby the plaintiff was obligated to pay and deliver to defendant FMEI the amount of Fifty Million Four Hundred Thousand Pesos (Php50,400,000.00) in thirty five (35) monthly instalments of One Million Four Hundred Thousand Pesos (Phpl,400,000.00), representing the balance of the payment for the medical equipment supplied under the afore-cited rescissible contracts. This side agreement, executed five (5) days later, or on 11 February 2009, and denominated as "AGREEMENT", had no object as a contract, but was entered into solely for the purpose of getting the plaintiff locked-in to the payment of the balance price under the rescissible contracts; x x x"From the above averments, Private Respondent cannot deny knowledge of the Agreement dated February 11, 2009. In one case, it was held that when a respondent makes a "specific denial" of a material allegation of the petition without setting forth the substance of the matters relied upon to support its general denial, when such matters where plainly within its knowledge and the defendant could not logically pretend ignorance as to the same, said defendant fails to properly tender an issue."26chanroblesvirtuallawlibrary
However, Private Respondent's disavowal of knowledge of its outstanding balance is well-taken. Paragraph 6 of Petitioner's Complaint states that Private Respondent was able to pay only the amount of P67,357,683.23. Taken together with paragraph 8, which states that Private Respondent was only able to make good four (4) check payments worth P1,400,000.00 or a total of P5,600,000.00, Private Respondent's total payments would be, in Petitioner's view, P72,957,683.23. However, in its Complaint for Rescission, attached to its Motion to Dismiss Petitioner's Complaint for Sum of Money, Private Respondent alleged that:ChanRoblesVirtualawlibrary"16. To date, plaintiff had already paid defendant the amount of Seventy Eight Million Four Hundred One Thousand Six Hundred Fifty Pesos (P78,401,650.00)"It is apparent that Private Respondent's computation and Petitioner's computation of the total payments made by Private Respondent are different. Thus, Private Respondent tendered an issue as to the amount of the balance due to Petitioner under the subject contracts.27chanrobleslaw
Section 1. Judgment on the pleadings. - Where an answer fails to tender an issue, or otherwise admits the material allegations of the adverse party's pleading, the court may, on motion of that party, direct judgment on such pleading, x x x
There is no need for proof of execution and authenticity with respect to documents the genuineness and due execution of which are admitted by the adverse party. With the consequent admission engendered by petitioners' failure to properly deny the Acknowledgment in their Answer, coupled with its proper authentication, identification and offer by the respondent, not to mention petitioners' admissions in paragraphs 4 to 6 of their Answer that they are indeed indebted to respondent, the Court believes that judgment may be had solely on the document, and there is no need to present receipts and other documents to prove the claimed indebtedness. The Acknowledgment, just as an ordinary acknowledgment receipt, is valid and binding between the parties who executed it, as a document evidencing the loan agreement they had entered into. The absence of rebutting evidence occasioned by petitioners' waiver of their right to present evidence renders the Acknowledgment as the best evidence of the transactions between the parties and the consequential indebtedness incurred. Indeed, the effect of the admission is such that a prima facie case is made for the plaintiff which dispenses with the necessity of evidence on his part and entitled him to a judgment on the pleadings unless a special defense of new matter, such as payment, is interposed by the defendant.35 (citations omitted)
Endnotes:
* Pursuant to Special order No. 23 1 1, effective January 16, 2016.
1Rollo, pp. 91-100; penned by Associate Justice Florito S. Macalino, with the Associate Justice Sesinando E. Villon and Associate Justice Pedro B. Corales.
2 CA rollo, pp. 106-107.
3 Id. at 21-22.
4 Id. at 23-25.
5 Id. at 26-28.
6 Id. at 32-35,
7Rollo, p. 3.
8 CA rollo, pp. 36-39
9Rollo, p. 4.
10 CA rollo, pp. 41-42.
11 Id. at 43.
12 Rollo, pp. 14-17.
13 Id. at 14-17.
14 Id. at 20-26.
15 Id. at 23.
16 Id. at 36-39.
17 Id. at 40-46.
18 Id. at 40-41.
19 CA rollo, pp. 87-89.
20 Rollo. pp. 47-48.
21 Id. at 49-50.
22 CA rollo, pp. 106.
23 Id. at 103-105.
24 Id. at 102.
25 Id. at 3-20.
26Rollo, pp. 07-99.
27 Id.
28 Wood Technology Corporation v. Equitable Banking Corporation, G.R. No. 153867, February 17, 2005, 451 SCRA 724, 731.
29Mongao v. Pryce Properties Corporation, G.R. No. 156474, August 16, 2005, 467 SCRA 201, 214.
30 Section 11, Rule 8 of the Rules of Court.
31 Section 7, id.
32 Section 8, id.
33Dino v. Valencia, G.R. No. 43886, July 19, 1989, 175 SCRA 406, 414.
34 G.R. No. 183034. March 12, 2014, 718 SCRA 636.
35 Id. at 652-653.
36J.P. Juan & Sons, Inc. v. Lianga Industries, Inc., G.R. No. L-25137, July 28, 1969, 28 SCRA 807, 809-812.
37Manufacturer's Bank & Trust Co. v. Diversified Industries, Inc., G.R. No. 33695, May 15, 1989, 173 SCRA 357, 364.