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Manufacturer’s bank and trust company Vs.

Diversified Industries, Inc and Alfonso Tan

Petitioner filed a complaint with CFI of Manila for the recovery of a sum of money against
respondents. The allegations are as follows:

1. On December 17, 1963 defendants were granted a loan (P 125,000 at 10% per
annum interest);

2. Loan became due and payable on February 26, 1965, But defendants failed and
refused to liquidate their obligations, leaving an outstanding balance of P
100,119.21 as of 6/25/1965;

3. Because of refusal of defendants to satisfy the obligation, plaintiff was compelled

to engage the services of counsel for fee equivalent to 10% of the total sum due.

In the answer, defendant admitted paragraph 1 and 2 of the complaint but denied par. 3 and 4.
Now petitioner moved for the judgment of the pleadings and defendant file a motion opposing
the the judgment on the pleadings. The court a quo denied the defendants motion for leave to
amend their answer and rendered judgment on the pleading being that original answers failed to
tender any issue.

From the judgment an appeal was taken to the Supreme Court on question of law both the
plaintiff and the defendants.

The petitioner faults the trial court for

1. not specifying the defendant’s liability to it to be joint and several; and
2. requiring payment by defendants of interest only at the legal rate instead of that
stipulated in the agreement;

On the part of the respondent, it ascribed the following errors to the Court a quo:
11. refusing to admit their amended answer;
12. not dismissing the complaint for failure to state a cause of action; and
13. rendering judgment on the pleadings.

Is the Court a quo’s decision untenable?

YES. Amendment of the answer in substantial aspect was not a matter of right, but lay in the
discretion of the court, which means a bare desire to amend the pleading because certain matters
had not therein alleged or the submission of an amended one is obviously not sufficient. It should
be stated to the court some reasonable ground justifying its exercise of discretion to allow

The Supreme Court opined that it is incumbent upon a party desiring to amend his pleadings to
furnish the court with some adequate foundation for the court to grant leave to amend the

In the case at bar, it was not done by the defendants. Their motion merely declared that they had
failed to include certain allegations and defenses in their original answer, but give no explanation
for their failure to do so at the time they drew up that pleading or within a reasonable time