EN BANC In its complaint filed in the Court of First Instance of Manila,

the plaintiff alleges that on 1 September 1952 the defendant

[G.R. No. L-10884. March 31, 1959.] Philippine Leather Co., Inc. applied for a commercial letter of
credit in the sum of $14,814.80, U. S. currency, under the
PHILIPPINE NATIONAL BANK, Plaintiff-Appellee, v. terms and conditions set forth in an application filed by the
PHILIPPINE LEATHER CO. INC., ET AL., defendants in favor of the Turner Tanning Machinery Co. of
Defendants-Appellants. Peabody, Massachusetts, U. S. A. to cover the full invoice value
of certain machineries and their accessories; that on 3 October
Castano & Ampil for Appellants. 1952 the plaintiff approved the application "subject to 30%
deposit and the joint and several signatures of Mr. Isidoro
Ramon B. De los Reyes for Appellee. Tinoco and Mrs. Soledad L. Basa" which conditions were
complied with; that on 8 October 1952, the plaintiff issued
Letter of credit No. 51469 in favor of the Turner Tanning
SYLLABUS Machinery Company; that on 15 November 1952 the Turner
Tanning Machinery Co., drew upon the letter of credit the sum
of $14,549.17, U.s. currency; that upon arrival in the
1. PLEADING AND PRACTICE; SUMMARY JUDGMENT; Philippines of the machineries and their accessories imported
WHEN MOVING PARTY ENTERED TO JUDGMENT; CASE by the defendants, the plaintiff released them to the
AT BAR. — In their answer, the defendants admit the defendants under a trust receipt, that on 23 January 1953 the
plaintiff’s averments excepts as to the correctness of the plaintiff presented to the defendants for payment the draft
amounts due, the correctness of which they were still checking, drawn by the Turner Tanning Machinery Co., upon Letter of
and for that reason lacking sufficient knowledge or Credit No. 51469 which was accepted by them; that after the
information to form a belief as to the truth and veracity of the draft had matured on 23 April 1953 the plaintiff made
amounts due, they deny the amounts claimed by the plaintiff numerous demands upon the defendants to pay the amount of
to be due them. Hence, plaintiff is entitled to summary the draft and the charges due thereon but the defendants failed
judgment. and refused to pay; and that as of 15 October 1953, the
outstanding balance of the defendants on the draft is
DECISION P22,787.79, Philippine currency, plus interest thereon at the
rate of P4,89135 daily until fully paid. It alleges further that on
PADILLA, J.: 30 January 1953 the defendant Philippine Leather Co., Inc.,
applied for a commercial letter of credit in the sum of
$2,587.50, U.S. currency, under the terms and conditions set
forth in an application filed by the defendants in favor of Bay
State Chemical Co., of Boston, Massachusetts, U.S.A., to pay
for the importation of color dye; that the plaintiff approved the
application "subject to 30% deposit and the joint and several
signatures of Mr. Isidoro Tinoco and Mrs. Soledad L. Basa,"
which conditions were complied with; that there after the
plaintiff issued Letter of Credit No. 53753 in favor of the Bay
State Chemical Co., that on 12 March 1953 the Bay State
Chemical Co., drew upon the letter of credit the sum of
$2,482.40, U.S. currency; that the draft drawn by the Bay
State Chemical Co., was presented by the plaintiff to the
defendants for payment; that the defendants failed and refused
to pay the amount of the draft and the charges due thereon;
that because of the failure and refusal of the defendants to pay
their obligation, the plaintiff delivered the documents of the
shipment to the Luzon Brokerage Co., and requested it to
claim and store the shipment in its bonded warehouse, for
which service and storage the defendants are liable to the
Luzon Brokerage Co.; that as of 15 October 1953; the
outstanding balance of the of the defendants on the draft is
P4,503.05, Philippine currency, plus interest thereon at the
rate of P.083569 daily until fully paid.
The plaintiff prays that after hearing judgment be rendered
ordering the defendants to pay it the same of P22,787.79, with
daily interest thereon at the rate of P4.89135 from 15 October
1953 until fully paid; 10% of the said amount as attorney’s fee;
P4,503.05, with daily interest thereon at the rate of P0.83569
from 15 October 1953 until fully paid; the amount of storage
and other charges that the Luzon Brokerage Co., would charge
the plaintiff for the handling and storage of the merchandise
imported by the defendants under Letter of Credit No. 53753;
and the costs of the suit. The plaintiff further prays that
pending hearing and final judgment, a writ of attachment be
issued commanding the Sheriff of the City of Manila to levy
upon attachment on the properties of the defendants as
security for the satisfaction of any judgment that it may secure
against them.
In their answer filed on 28 December 1953 the defendants
admit the plaintiff’s averments except as to the correctness of
the amounts due on the two drafts, the correctness of which
they were still checking, and for that reason lacking sufficient
knowledge or information to form a belief as to the truth and
veracity of the amounts due on the two drafts, they deny the
amounts claimed by the plaintiff to be due from them.
On 25 June 1954 the plaintiff filed a motion for summary
judgment on the ground that since the defendants has
admitted the material averments of its complaint except as to
the correctness of the amounts due, the defendants’ answer did
not tender a genuine issue. The plaintiff attached to its motion
an affidavit subscribed and sworn to by Ceferino Saavedra,
Manager of the Special Assets Department of the plaintiff, in
charge of all outstanding accounts of its debtors, stating the
payments made by the defendants on their account and the
exact total amount due from them.
On 7 October 1954 the Court granted the plaintiff’s motion and
rendered judgment ordering the defendants, jointly and
severally, to pay-
. . . the plaintiff in the first cause of action, the amount of
P22,787.79, with a daily interest of P4.89135 from October 15,
1953 up to full payment thereof; and 10% of the amount due
for attorney’s fees. On the second cause of action, defendants
shall pay, jointly and severally, the sum of P4,503.05, with a
daily interest of P0.83569 from October 15, 1953 until full
payment thereof.
Defendants shall also pay the costs.
The defendants appealed to the Court of Appeals. The latter
certified the case to this Court for the reason that only
questions of law are raised.
Rule 36 provides:chanrob1es virtual 1aw library
Section 1. Summary judgment for claimant. — A party seeking
to recover upon a claim, counterclaim, or crossclaim or to
obtain a declaratory relief may, at any time after the pleading
in answer thereto has been served, move with affidavits for a
summary judgment in his favor upon all or any part thereof.
SEC. 3. Motion and proceedings thereon. --The motion shall be
served at least ten days before the time specified for the
hearing. The adverse party prior to the day of hearing may
serve opposing affidavits. The judgment sought shall be
rendered forthwith if the pleadings, depositions, and
admissions or file, together with the affidavits, show that,
except as to the amount of damages, there is no genuine issue
as to any of the material fact and that the moving party is
entitled to a judgment as a matter of law.
SEC. 5. Form of affidavits. — Supporting and opposing
affidavits shall be made on personal knowledge, shall set forth
such facts as would be admissible in evidence, and shall show
affirmatively that the affiant is competent to testify to the
matters stated therein. Sworn or certified copies of all papers
of parts thereof referred to in an affidavit shall be attached
thereto or served therewith.
The defendants’ answer that as to the first cause of action they
—
. . . are still checking on the correctness of the alleged balance
outstanding against them and in favor of the plaintiff;
consequently, for lack of knowledge or information sufficient
to form a belief as to the truth and veracity of the averments
embodied in paragraph 7 thereof, they hereby specifically deny
the allegations therein stated;
and that as to the second cause of action they--
. . . are checking on the veracity and correctness of the balance
allegedly outstanding in favor of the plaintiff manifested in
paragraph 6 of the same, they, by virtue thereof, specifically
deny it for lack of knowledge and belief as to the truth of the
allegations embodied in the aforestated paragraph.
does not tender a genuine issue. In fact they admit that they
are indebted to the plaintiff. As the affidavit subscribed and
sworn to by the Manager of the Special Assets Department of
the plaintiff, in charge of all outstanding accounts of its
debtors, attached to the motion for summary judgment,
furnishes the Court with the payments made by the defendants
on their account and the amount due from them, which they
failed to oppose by counter affidavits, the plaintiff is entitled to
summary judgment. (1)
The judgment appealed from is affirmed, with costs against the
appellants.
Paras, C.J., Bengzon, Montemayor, Reyes A., Bautista Angelo,
Labrador, Concepcion, Reyes J.B.L. and Endencia, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 74766 December 21, 1987
DOMINGO VERGARA, SR., petitioner,
vs.
HON. JOSE T. SUELTO Presiding Judge of the
Municipal Trial Court in Davao City, Branch IV,
MANOLITO GUINOO ROMEO MONTEBON and
PORFERIO CABASE respondents.
NARVASA, J.:
Two issues are involved in the instant special civil action of
mandamus. The first is whether or not the appropriateness of a
summary judgment may ever be so self-evident in a case as to
make it well nigh a duty on the part of the Trial Judge to grant
the plaintiff's motion therefor. The second relates to the
propriety of the filing directly with this Court an application
for a writ of mandamus against a municipal trial court,
considering that jurisdiction to issue this extraordinary writ is
also possessed by the Court of Appeals as well as the Regional
Trial Court of the district.
To resolve the first issue it will be necessary to deal with the
facts in some detail.
Petitioner Vergara commenced in the Municipal Trial Court of
Davao City an action for illegal detainer against the private
respondents. 1 His complaint 2 alleged in essence that —
1) he is the owner of a commercial building consisting of three
(3) sections, each of which is separately occupied by the
defendants (private respondents herein) as lessees;
2) the defendants' lease contracts, two of which were written,
were all on "a month to month basis," and originally
prescribed a monthly rental of P350.00, later increase to
P450.00;
3) because the defendants all defaulted in the payment of their
rentals for many months, Vergara's lawyer sent each of them a
letter "(1) demanding payment of their unpaid rentals, (2)
terminating their lease contracts effective at the end of
December 1985 on two grounds: non- payment of rentals and
plaintiff's need of the property for some other purpose, and (3)
demanding that defendants vacate the leased premises not
later than the end of said month of December 1985; "
4) the defendants sent Vergara a joint reply pertinently reading
as follows:
This is to confirm our verbal commitment with you to leave the
said premises as soon as you need it. However due to mainly
economic reason, we request for an extension of three months
(3) to enable us to find new space wherein we can continue our
sole livelihood;
in addition, defendant Montebon also paid a part of his
arrearage;
5) later however, the defendants wrote Vergara another letter;
this time, while acknowledging the latter's ownership of the
building and their status as lessees thereof they announced
their refusal to vacate the premises on the ground that the lot
on which the building stands, though titled in Vergara's name,
was part of a tract of land Identified as Lot 508 which had been
ordered reverted to the public domain by the Regional Trial
Court (Branch XIV) in a decision rendered in Civil Case No.
16192 for "Cancellation of Titles and Reversion" entitled
"Republic of the Philippines vs. Kwong Tai Lung y Cia et al. ;
6) Vergara wrote back to them, pointing out the error of the
position thus taken by them, and reiterating his demand to
vacate; his reply having gone unheeded, he initiated the
requisite proceedings before the Office of the Barangay
Captain; and when the controversy was not settled by
conciliation, he instituted the ejectment suit at bar.
In their answer to the complaint, 3 defendants Guinoo,
Montebon and Cabase —
1) denied the averments of the complaint relative to their and
the plaintiff's personal circumstances;
2) denied Vergara's ownership of the building and the fact that
it consisted of three sections separately leased by him:
3) claimed that their lease contract with Vergara were null and
void;
4) denied having initially paid rentals but thereafter defaulting
and incurring arrearages in the amounts specified in the
complaint, claiming that they had been "occupying the
premises in the concept of an owner;"
5) denied knowledge and hence professed inability to form a
belief regarding either their joint letter to Vergara (copy of
which was attached to the complaint) or of the reply thereto by
Vergara's lawyer;
6) denied liability to Vergara for damages because as
member(s) of good standing of (a group calling itself)
Salandanan et al Landless Association Inc., ... (they were)
occupying the land as owners;" and
7) claimed that in virtue of the judgment of the Regional Trial
Court in Civil Case No. 16192 declaring null and void the title
issued over "lot 508"- of which Vergara's was formerly a part
they were claiming Vergara's land "as their share as member of
Salandanan et al Landless Association," which was "a
recognized intervenor" in the case.
Vergara presented a reply to the defendants' answer, chiefly
making the point that neither he nor any of the defendants was
a party to Civil Case No. 16192 and hence could not be bound
by whatever judgment or orders might be rendered therein;
that his title to the land was not void nor had it ever been
subject of any action for annulment; and that in any event Civil
Case No. 16192 had no relevance to the "case for ejectment
against defendants for non- payment of rents on x x (his)
commercial building. 4
Under date of March 7, 1986 Vergara filed a Motion for
Summary Judgment. 5 The motion was verified and had 8
supporting documents annexed to it. 6 It asserted and sought
to substantiate the following propositions, to wit:
1. The 3 defendants were lessees of Vergara's commercial
building, their status as such being established by-
a) the 2 written contracts of lease of Guinoo and Cabase, copies
of which were attached to the verified complaint as Annexes A
and B.
b) the demand letters sent by Vergara's lawyer to each of the 3
defendants, copies of which were attached to the motion for
summary judgment as Annexes A, B, and C thereof;
c) the payment by Montebon on December 20, 1985 of back
rentals for November and December 1984, evidenced by
Official Receipt No. 2300, a copy of which was appended to the
motion as Annex D;
d) the joint letter dated December 6, 1985 confirming their
"verbal commitment to leave the ... "premises" as soon as
needed and asking for an "extension of three (3 months to
enable ... (them) to find new space, " a copy of was attached to
the verified complaint as Annex C thereof.
2. Neither he (Vergara) nor the defendants were parties in Civil
Case No. 16192 and consequently could not be bound by any
judgment or order therein promulgated, a proposition
confirmed by the Order of the Court in that action dated
February 24, 1986, a copy of which he attached to his motion
as Annex E.
3. Civil Case No. 16192, involving "parcels of land, " was
relevant to the ejectment case at bar involving ejectment from
Vergara's "commercial building;" and defendants had
acknowledged in their joint letter dated January 7, 1976 that
the building belongs to Vergara, a copy of the letter being
attached to the motion as Annex F.
4. In view of their acknowledgment of Vergara's ownership of
the building, the defendants' claim of ownership of the land on
which it stands is "false and absurd." "Moreover, defendants as
lessees are estopped from asserting any adverse claim or title
against plaintiff (Art. 1436 of the Civil Code). "
5. The defendants' answer is patently defective. It flatly denies
their own personal circumstances, and professes lack of
knowledge sufficient to form a belief about the exchange of
letters between them and Vergara's lawyer-matters about
which they could not but have direct, personal awareness and
about which they could not therefore claim ignorance. 7
Against this motion defendants filed an "Opposition to Motion
for Summary Judgment and Motion to Dismiss." 8 They
argued that —
1. A genuine issue exists which "cannot be resolved by mere
resort to summary judgment," that issue having arisen from
defendants' controversion of Vergara's claim "of possession
and ownership over the commercial building and the land on
which the same is constructed, "
2. Their answer "tendered a genuine issue and does not only
consist of a mere general denial" since in the main "it
specifically denied the material averment of facts in the
complaint setting forth the substance of the matters in support
of their denial;" and as regards their declared ignorance of
some of the facts alleged in the complaint, an averment of lack
of knowledge was under the Rules equivalent to a specific
denial.
3. The Court had no jurisdiction over the case because "the real
issue involved ... is title and/or ownership of the property and
not physical possession," and "this case should not be by
accion interdictal but accion de reivendicacion (sic). "
Vergara submitted a reply dated April 9, 1986, adverting to the
distinction between a summary judgment under Rule 34 and a
judgment on the pleadings under Rule 19, and reiterating and
amplifying the propositions and arguments set out in his
motion for summary judgment. 9
The incidents were resolved by the respondent Judge in two
separate orders promulgated on the same day, April 15, 1986.
The first order denied the defendants' motion to dismiss. 10
The Judge ruled that-
... Ownership by the plaintiff of this building has not been
seriously denied by defendants who instead insist that their
claim to ownership of the land be a ground for a dismissal of
this case for the court's lack of jurisdiction. But the court
believes that this case properly is an Unlawful Detainer action
as it assesses the respective claims of the parties and it (the
court), in accordance with the provisions of Section 33 of Batas
Pambansa Blg. 129 is not without authority to resolve the issue
of ownership if only to determine the issue of possession. 11
The second order 12 denied Vergara's motion for summary
judgment. The denial was grounded on the following
observations of the respondent Judge:
... Of course, the (plaintiff's) discussion seeks to convince the
court that there is no more need of a trial because conclusively
it is claimed that no genuine issue on a material fact was
raised. But it appears from the answer that the material
allegations of facts in the complaint constituting plaintiff's
cause of action are specifically denied and in addition thereto,
defendants have put up affirmative defenses in avoidance of
plaintiff's claims. ... .
The rule gives the court limited authority to enter summary
judgment. Upon a motion for summary judgment, the court's
sole function is to determine whether there is an issue of fact
to be tried. It does not vest the court with authority to try the
issues on depositions, pleadings, letters or affidavits. ... (I)f
there is a controversy upon any question of fact, there should
be a trial of the case upon its merits. 13
His Honor's observations expose no little confusion about the
fundamental nature of a summary judgment. The confusion is
further bared by his statement that the "only issue in this
motion (for summary judgment) is whether, in this Unlawful
Detainer action the material averments of facts constituting
plaintiff's cause of action have been specifically denied in
accordance with Section 10, Rule 8 of the Rules of Court." He
seems to think it is the same as a judgment on the pleadings
which, of course, it is not.
The confusion is shared by the defendants (private
respondents), this being revealed by their argument that in
view of their denial of plaintiff's assertion of ownership over
the premises in question, and their controversion of "the
material facts of the adverse party," their answer did not only
consist of a mere "general denial" but "definitely tendered a
genuine issue" "which cannot be resolved by resort to mere
summary judgment." 14 Indeed, they point out that in their
answer they have dealt with each paragraph of the complaint;
and "considering therefore the totality of the allegations of ...
(said) answer vis-a-vis the allegations of the complaint, ... the
answer tendered a valid issue. 15
The essential question however is not whether the answer does
controvert the material allegations of the complaint but
whether that controversion is bona fides. The fundamental
issue is not whether the answer does tender valid issues as by
setting forth specific denials and/or affirmative defenses but
whether the issues thus tendered are genuine, or fictitious,
sham, characterized by bad faith.
Section 1, Rule 19 of the Rules of Court provides that where an
answer "fails to tender an issue, or otherwise admits the
material allegation of the adverse party's pleading, the court
may, on motion of that party, direct judgment on such
pleading." 16 The answer would fail to tender an issue, of
course, if it does not comply with the requirements for a
specific denial set out in Section 10 (or Section 8) of Rule 8;
and it would admit the material allegations of the adverse
party's pleadings not only where it expressly confesses the
truthfulness thereof but also if it omits to deal with them at all.
17
Now, if an answer does in fact specifically deny the material
averments of the complaint in the manner indicated by said
Section 10 of Rule 8, and/or asserts affirmative defenses
(allegations of new matter which, while admitting the material
allegations of the complaint expressly or impliedly, would
nevertheless prevent or bar recovery by the plaintiff) in
accordance with Sections 4 and 5 of Rule 6, a judgment on the
pleadings would naturally not be proper.
But even if the answer does tender issues and therefore a
judgment on the pleadings is not proper-a summary judgment
may still be rendered on the plaintiff's motion if he can show to
the Court's satisfaction that "except as to the amount of
damages, there is no genuine issue as to any material fact," 18
that is to say, the issues thus tendered are not genuine, are in
other words sham, fictitious, contrived, set up in bad faith,
patently unsubstantial. 19 The determination may be made by
the Court on the basis of the pleadings, and the depositions,
admissions and affidavits that the movant may submit, as well
as those which the defendant may present in his turn. 20
In this case, the defendants' answer appears on its face to
tender issues. It purports to deal with each of the material
allegations of the complaint, and either specifically denies, or
professes lack of knowledge or information to form a belief as
to them. It also sets up affirmative defenses. But the issues
thus tendered are sham, not genuine, as the slightest reflection
and analysis win readily demonstrate.
1. To begin with, the defendants' denial of their own personal
circumstances, as these are stated in the complaint, is
obviously sham. The accuracy of those stated circumstances is
quite evident. They are in truth all residents of Davao City,
doing business at Cabaguio Avenue, where the plaintiff's
building is located, and in which they have rented space and
where they have been maintaining their commercial
establishments under one trade name or another. As fictitious
is their denial of plaintiff's own personal circumstances. They
could not but know that those circumstances had been
correctly set down in the complaint, having been dealing with
the plaintiff for years, and he being the owner of the building
occupied by them.
2. Their disavowal of the plaintiff's ownership of the building
occupied by them, and also that the building is composed of
three (3) sections, also cannot be genuine. They had each been
occupying those three (3) sections for years and been paying
rentals therefor to the plaintiff. Their answer contains their
admission that the plaintiff has title over the land on which the
building stands. 21 There are two (2) written contracts
showing the lease by two of them of the building from the
plaintiff, and a receipt evidencing payment by another of
rentals to the plaintiff, documents which they have made no
serious or effective effort to controvert but which, on the
contrary, they have impliedly admitted. There is, too, their own
letter to the plaintiff dated December 6, 1985, acknowledging
receipt of the communication of the latter's lawyer (demanding
their vacation of the premises and payment of rentals in
arrears), and confirming their "verbal commitment to you to
leave the said premises as soon as you need it. 22 There is,
finally, another letter of their dated January 7, 1986 referring
to Vergara's demand for the payment of their "rental in
arrears" and for them "to vacate the building rented by us." 23
3. Also patently sham is their professed ignorance of the joint
letter sent by them to the plaintiff under date of December 6,
1985, just referred to. It should be noted that they have not
denied writing or sending the letter. What they say is that
"they have no knowledge or information sufficient to form a
belief" as to it. This is ridiculous. Either they wrote the letter or
they did not. Either way, they cannot but have knowledge of it.
To say that they are ignorant of it is palpable dishonesty. In
any event we have already pronounced such a profession of
ignorance about a fact which is patently and necessarily within
the pleader's knowledge, or means of knowing as ineffectual,
as no denial at all. 24
4. So, too, their denial of ever having paid rents to the plaintiff
is fictitious. The facts on record, to which the plaintiff has
drawn attention, inclusive of the official receipt issued to
defendant Montebon, prove they're beyond cavil.
5. Finally, their affirmative defense, in which they assert title in
themselves over the land on which the plaintiff's building
stands, is also sham, even an absurdity. They base their claim
on a judgment rendered by the Regional Trial Court in an
entirely separate action in which title over a large tract of land
of which the plaintiff's once formed a part had been annulled,
and the land ordered reverted to the public domain. But
neither the plaintiff nor the defendants are parties to this
action. The judgment has moreover been appealed. And the
defendants' connection with the case rests on nothing more
substantial than their alleged membership in an association at
whose relation the reversion suit had supposedly been
instituted by the Republic, and which association would
presumably have preferential rights to occupy or acquire the
land once finally reverted to the public domain. It is apparent
that defendants' claim of title to the particular lot of the
plaintiff is so tenuous and conjectural as to be practically
inexistent. In any event, the claim is utterly irrelevant to the
ejectment suit at bar, which involves merely the question of
whether or not their possession of the plaintiff's premises had
become illegal in virtue of their extended failure to pay rentals
and their refusal to vacate the premises and pay those arrears
despite due demand. They are moreover estopped to dispute
the plaintiff's title. "The tenant is not permitted to deny the
title of his landlord at the time of the commencement of the
relation of landlord and tenant between them." 25
Under the circumstances herein set forth at some length, the
fitness and propriety of a summary judgment cannot be
disputed. The failure of the respondent Judge to render such a
judgment was due solely to his unfortunate unfamiliarity with
the concept of a summary judgment. It is a failure which we
have it in our power to remedy. No genuine issue having been
tendered by the defendants, judgment should be directed as a
matter of right in the plaintiff's favor. To yet require a trial
notwithstanding the pertinent allegations of the pleadings and
the other facts indubitably appearing on record would be a
waste of time, and an injustice to the plaintiff whose obtention
of the relief to which he is plainly and patently entitled would
be further delayed. As it is, the delay has already been
considerable.
The remedy properly available to the petitioner in the
premises, however, is not the writ of mandamus. Well known
is the rule that mandamus issues only to compel performance
of a mandatory, ministerial duty. 26 The determination that
under the facts and circumstances obtaining in a case a
summary judgment is proper, and the motion therefor should
be granted and summary judgment consequently rendered,
rests in the sound discretion of a trial court and can not be
regarded as a duty of ministerial function compellable by the
extraordinary writ of mandamus. In this case, the respondent
Judge had discretion to make that determination. What
happened was that His Honor made that determination with
grave abuse of discretion. Despite the plain and patent
propriety of a summary judgment, he declined to render such a
verdict. The writ of certiorari will lie to correct that grave abuse
of discretion. 27
We turn now to the second question posed in the opening
paragraph of this opinion, as to the propriety of a direct resort
to this Court for the remedy of mandamus or other
extraordinary writ against a municipal court, instead of an
attempt to initially obtain that relief from the Regional Trial
Court of the district or the Court of Appeals, both of which
tribunals share this Court's jurisdiction to issue the writ. As a
matter of policy such a direct recourse to this Court should not
be allowed. The Supreme Court is a court of last resort, and
must so remain if it is to satisfactorily perform the functions
assigned to it by the fundamental charter and immemorial
tradition. It cannot and should not be burdened with the task
of dealing with causes in the first instance. Its original
jurisdiction to issue the so-called extraordinary writs should be
exercised only where absolutely necessary or where serious
and important reasons exist therefor. Hence, that jurisdiction
should generally be exercised relative to actions or proceedings
before the Court of Appeals, or before constitutional or other
tribunals, bodies or agencies whose acts for some reason or
another, are not controllable by the Court of Appeals. Where
the issuance of an extraordinary writ is also within the
competence of the Court of Appeals or a Regional Trial Court,
it is in either of these courts that the specific action for the
writ's procurement must be presented. This is and should
continue to be the policy in this regard, a policy that courts and
lawyers must strictly observe.
In the case at bar, however, to apply the policy by referring the
action to the Regional Trial Court of the district would serve no
useful purpose. It would on the contrary work injustice to the
petitioner to whom the relief rightly due has already been
withheld for many years. The case having been filed before this
Court as early as 1986, and having already been subject of an
extensive exchange of pleadings, it should and will now be
decided without further delay.
WHEREFORE, the Order of the respondent Judge dated April
15, 1986 denying the petitioner's (plaintiff's) motion for
summary judgment, and that dated April 30, 1986 declining to
reconsider the same, are hereby annulled and set aside. Said
respondent Judge is hereby commanded forthwith to render a
summary judgment in favor of the petitioner (plaintiff) against
the private respondents (defendants), namely: Manolito
Guinoo, Romeo Montebon and Porferio Cabase, in accordance
with the prayer of the former's motion for summary judgment
dated March 7, 1986. The appropriateness and correctness of a
summary judgment in the premises having already been
adjudged by this Court, His Honor is further commanded to
direct execution of the judgment immediately upon its
rendition. This decision is immediately executory and no
motion for extension of time to file a motion for
reconsideration shall be entertained. Costs against private
respondents.
Teehankee, C.J., Cruz, Paras, * and Gancayco, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 107243 September 1, 1993
PHILIPPINE NATIONAL BANK, petitioner,
vs.
NOAH'S ARK SUGAR REFINERY, ALBERTO T.
LOOYUKO, JIMMY T. GO, WILSON T. GO,
respondents.
Santiago, Jr. Vida, Corpuz & Associates for petitioner.
Tomas P. Madella Jr. for respondents.
NARVASA, C.J.:
The case at bar involves extraordinary situation in which a
Regional Trial
Judge — after receiving notice to the final and executory
judgment of the Court of Appeals in a special civil action of
certiorari in which said Trial Judge was a respondent, and
which judgment contained the following disposition, viz.:
In issuing the questioned Orders, We find the respondent
Court to have acted in grave abuse of discretion which justify
holding null and void and setting aside the Orders date May 2
and July 4, 1990 of respondent Court, and that a summary
judgment be rendered forthwith in favor of the PNB against
Noah's Ark Sugar Refinery, et al., as prayed for in petitioner's
Motion for Summary Judgment.
SO ORDERED.
— proceeded to render judgment, not "in favor of the PNB
against Noah's Ark Sugar Refinery, et al.," but in favor of the
latter and its co-defendants. That judgment has been appealed
by PNB to this Court "on pure questions of law."
No dispute exists about the facts which gave rise to the
controversy at bar.
In accordance with Act No. 2137, the Warehouse Receipts Law,
Noah's Ark Sugar Refinery issued on several dates warehouse
receipts (quedans) as follows:
March 1, 1989, receipt No. 18062 covering sugar deposited by
Rosa Sy;
March 7, 1989, receipt No. 18080 covering sugar deposited by
RNS Merchandising (Rosa Ng Sy);
March 21, 1989, receipt No. 18081 covering sugar deposited by
RNS Merchandising;
March 31, 1989, receipt No. 18086 covering sugar deposited by
St. Therese Merchandising; and
April 1, 1989, receipt No. 18087 covering sugar deposited by
RNS Merchandising.
The receipts are substantially in the form, and contain the
terms, prescribed for negotiable warehouse receipts by Section
2 of the law.
Subsequently, warehouse receipts Numbered 18080 and 18081
(covering sugar deposited by RNS Merchandising) were
negotiated and indorsed to Luis T. Ramos; and receipts
Numbered 18086 (sugar of St. Therese Merchandising), 18087
(sugar of RNS Merchandising) and 18062 (sugar of Rosa Sy)
were negotiated and indorsed to Cresencia K. Zoleta. Zoleta
and Ramos then used the quedans as security for loans
obtained by them from the Philippine National Bank (PNB) in
the amounts of P23.5 million and P15.6 million, respectively.
These quedans they indorsed to the bank.
Both Zoleta and Ramos failed to pay their loans upon maturity
on January 9, 1990. Consequently on March 16, 1990, PNB
wrote to Noah's Ark Sugar Refinery (hereafter, simply Noah's
Ark) demanding delivery of the sugar covered by the quedans
indorsed to it by Zoleta and Ramos. When Noah's Ark refused
to comply with the demand, PNB filed with the Regional Trial
Court of Manila a verified complaint for "Specific Performance
with Damages and Application for Writ of Attachment" against
Noah's Ark, Alberto T. Looyuko, Jimmy T. Go, and Wilson T.
Go, the last three being identified as "the Sole Proprietor,
Managing Partner and Executive Vice President of Noah's Ark,
respectively."
The Court, by Order dated June 28, 1990, denied the
application for preliminary attachment after conducting a
hearing thereon. It denied as well the motion for
reconsideration thereafter filed by PNB, by Order dated August
22, 1990.
Noah's Ark and its co-defendants then filed their responsive
pleading entitled "Answer with Counterclaim and Third Party
Complaint," dated June 21, 1990 in which they claimed, inter
alia, that they "are still the legal owners of the subject quedans
and the quantity of sugar represented thereon," a claim
founded on the following averments, to wit:
. . . In an agreement dated April 1, 1989, defendants agreed to
sell to Rosa Ng Sy of RNS Merchandising and Teresita Ng of
St. Therese Merchandising the total volume of sugar indicated
in the quedans stored at Noah's Ark Sugar Refinery for a total
consideration of P63,000,000.00, . . . The corresponding
payments in the form of checks issued by the vendees in favor
of defendants were subsequently dishonored by the drawee
banks by reason of "payment stopped" and "drawn against
insufficient funds," . . . Upon proper notification to said
vendees and plaintiff in due course, defendants refused to
deliver to vendees therein the quantity of sugar covered by
subject quedans.
. . . Considering that the vendees and first indorsers of subject
quedans did not acquire ownership thereof, the subsequent
indorsers and plaintiff itself did not acquire a better right of
ownership than the original vendees/first indorsers.
The defendants also adverted to PNB's supposed awareness
"that subject quedans are not negotiable instruments within
the purview of the Warehouse Receipts Law but simply an
internal guarantee of defendants in the sale of their stocks of
sugar. . . ."
The answer incorporated a third party complaint by Alberto
Looyuko, Jimmy T. Go and Wilson T. Go ("doing business
under the name and style of Noah's Ark Sugar Refinery")
against Rosa Ng Sy and Teresita Ng, praying that the latter be
ordered to deliver or return to them the quedans (eventually
indorsed to the PNB and now subject of this suit) and pay
damages and litigation expenses.
The answer of Rosa Ng Sy and Teresita Ng, dated September 6,
1990, was essentially to the effect that the transaction between
them and Jimmy T. Go concerning the quedans and the sugar
thereby covered was "bogus and simulated (being part of the
latter's) complex banking schemes and financial maneuvers;"
that the simulated transaction "was just a tolling scheme to
avoid VAT payment and other BIR assessments (considering
that) as . . . confidentially intimated (by said Jimmy Go) . . .
Noah's Ark is under sequestration by the PCGG," and that the
quedans "were in fact used by Noah's Ark Executive Director,
Luis T. Ramos, and one Cresenciana K. Zoleta as security for
their loans from the bank . . . . (in the aggregate amount) of
P39.1 million pesos."
On January 31, 1991, PNB filed a "Motion for Summary
Judgment." It asserted that "from the pleadings, documents,
and admissions on file, there is no genuine issue as to a
material fact proper for trial and that plaintiff is entitled as a
matter of law, . . . (to) a summary judgment." It contended that
the defenses set up by Noah's Ark, et al. in their responsive
pleading involve purely questions of law — i.e., (a) that the
vendees of the sugar covered by the quedans in dispute never
acquired title to the goods because of their failure to pay the
stipulated purchase price and hence, ownership over the sugar
was retained by Noah's Ark, et al.; and (b) PNB's action is
premature since as pledgee it failed to exercise the remedies
provided in the contract of pledge and the Civil Code. And it
specified in no little detail the admissions and documents on
record demonstrating the absence of any genuine factual issue.
On these premises, it prayed "that a summary judgment be
rendered for plaintiff against the defendants for the reliefs
prayed for in the complaint," these reliefs being:
(a) to deliver to PNB the sugar stocks covered by the
Warehouse Receipts/Quedans which are now in the latter's
possession as holder for value and in due course; or
alternatively, to pay plaintiff actual damages in the amount of
P39.1 Million exclusive of interest, penalties and charges; and
(b) to pay plaintiff attorney's fees, litigation expenses and
judicial costs estimated at no less than P1 Million; (and) such
other reliefs just and equitable under the premises.
An opposition to the motion was presented by defendants
Noah's Ark, et al., dated March 4, 1991, asserting the existence
of genuine issues, to wit: whether or not the sale was ever
consummated considering that "the checks issued by the first
indorsees in payment of said quedans bounced," and whether
or not PNB acquired ownership over the quedans considering
that "it did not dispose (of) said quedans under Art. 2112 of the
Civil Code, as specifically reflected in the contract of pledge,"
both contentions allegedly being "material facts which has (sic)
to be supported by evidence."
The third-party defendants (Rosa Ng Sy and Teresita Ng)
also opposed the motion for summary judgment insofar as
concerned their counterclaim in relation to the third-party
complaint asserted against them.
On May 2, 1991, the Trial Court issued an Order denying the
motion for summary judgment on the ground that an
"examination of the pleadings and the record readily shows
that there exists sharply conflicting claims among the parties
relative to the ownership of the sugar quedans as to whether or
not the subject quedans falls (sic) squarely within the coverage
of the Warehouse Receipt Law and whether or not the
transaction between plaintiff and third party defendants is
governed by contract of pledge that would require plaintiff's
compliance with Art. 2112, Civil Code on pledge as regards the
disposition of the subjects quedans." PNB's for reconsideration
was denied by Order dated July 4, 1991.
PNB thereupon filed a petition for certiorari with the Court of
Appeals, which was docketed as CA-G.R. SP No. 25938. This
special civil action eventuated in a Decision promulgated on
December 13, 1991 by the Sixth Division of that Court, 1
nullifying and setting aside the challenged Orders of May 2,
1991 and July 4, 1991, and commanding that "summary
judgment be rendered forthwith in favor of the PNB against
Noah's Ark Sugar Refinery, et al., as prayed for in petitioner's
Motion for Summary Judgment." Said the Appellate Court:2
In issuing the questioned Orders, the respondent Court ruled
that "questions of law should be resolved after and not before,
the questions of fact are properly litigated." A scrutiny of
defendants' affirmative defenses does not show material
questions of facts as to the alleged non-payment of purchase
price by the vendees/first indorsers, and which non-payment
is not disputed by PNB as it does not materially affect PNB's
title to the sugar stock as holder of the negotiable quedans.
What is determinative of the propriety of summary judgment
is not the existence of conflicting claims for prior parties but
whether from an examination of the pleadings, depositions,
admissions and documents on file, the defenses as to the main
issue do not tender material questions of fact (see Garcia vs.
Court of Appeals 167 SCRA 815) or the issues thus tendered are
in fact sham, fictitious, contrived, set up in bad faith or so
unsubstantial as not to constitute genuine issues for trial. (See
Vergara vs. Suelto, et al., 156 SCRA 753; Mercado, et al. vs.
Court of Appeals, 162 SCRA 75). The questioned Orders
themselves do not specify what material facts are in issue. (See
Sec. 4, Rule 34, Rules of Court).
To require a trial notwithstanding pertinent allegations of the
pleadings and other facts appearing on record, would
constitute a waste of time and an injustice to the PNB whose
rights to relief to which it is plainly entitled would be further
delayed to its prejudice.
In issuing the questioned Orders, We find the respondent
Court to have acted in grave abuse of discretion which justify
holding null and void and setting aside the Orders dated May 2
and July 4, 1990 of respondent Court, and that a summary
judgment be rendered forthwith in favor of the PNB against
Noah's Ark Sugar Refinery, et al., as prayed for in the
petitioner's Motion for Summary Judgment.
SO ORDERED.
Noah's Ark, et al. moved for reconsideration, but their motion
was denied by the Appellate Tribunal's Resolution dated
March 6, 1991.
The judgment became final. Entry of Judgment was made on
May 26, 1992. Thereafter the case was remanded to the Court
of origin.
On June 18, 1992, the Regional Trial Court rendered judgment,
but not in accordance with the aforesaid decision of the Court
of Appeals. As stated in the opening paragraph of this opinion,
instead of a summary judgment "in favor of the PNB against
Noah's Ark Sugar Refinery, et al., as prayed for in . . . (PNB)'s
Motion for Summary Judgment," the Trial Court's verdict
decreed the dismissal of "plaintiff's complaint against
defendants Noah's Ark Sugar Refinery, Alberto T. Looyuko,
Jimmy Go and Wilson T. Go . . . . for lack of cause of action;"
and dismissal as well of the counterclaim pleaded by the latter
against PNB, and of the third-party complaint, and the
third-party defendant's counterclaim.
The Trial Court declared that if "the only material facts
established on the basis of the pleadings, documentary
evidence on record, admissions and stipulations during the
hearing on PNB's application for a writ of preliminary
attachment, are the facts as alleged by plaintiff and accepted as
established by the Court of Appeals, this Court will have no
difficulty in finding for plaintiff as prayed for in its motion for
summary judgment. But are the facts alleged by plaintiff the
only material facts established on the basis of the pleadings,
documentary evidence on record, stipulations and admissions
during the proceedings on the application for a writ of
preliminary attachment?" To this question the Trial Court gave
a negative answer, it being its view that other facts, "as alleged
by defendants . . . (and) not disputed by PNB, have been
likewise established."
The Trial Court later denied PNB's motion for reconsideration
(by Order dated September 4, 1992), evidently finding merit in
the argument of Noah's Ark, et al., therein quoted, that
"Certiorari as a mode of appeal involves the review of
judgment, award of final order on the merits, while the original
action for certiorari and as a special civil action is generally
directed against an interlocutory order of the Court, prior to an
appeal from the judgment of the main case which in the case at
bar is specific performance . . ."
Hence, this appeal.
In CA-G.R. SP No. 25938 above mentioned, after an extensive
review of the entire record of the case before the Regional Trial
Court (including the admissions of Noah's Ark, et al. and the
parties' stipulations of fact), as well as the pleadings filed by
the parties before it, the Court of Appeals arrived at the
conclusion that a summary judgment was proper since "there
was no substantial controversy on a(ny) material fact, the only
issues for the Court's
determination . . . (being) purely . . . questions of law, as
follows:
1) Whether or not the non-payment of the purchase price for
the sugar stock evidenced by the quedans, by the original
depositors/ vendees (RNS Merchandising and St. Therese
Merchandising) rendered invalid the negotiation of said
quedans by vendees/first indorsers to indorsers (Ramos and
Zoleta) and the subsequent negotiation of Ramos and Zoleta to
PNB.
2) Whether or not PNB as indorsee/ pledgee of quedans was
entitled to delivery of sugar stocks from the warehouseman,
Noah's Ark."
These legal questions were disposed of by the Appellate Court
as follows:
The validity of the negotiation by RNS Merchandising and St.
Therese Merchandising to Ramos and Zoleta, and by the latter
to PNB to secure a loan cannot be impaired by the fact that the
negotiation between Noah's Ark and RNS Merchandising and
St. Therese Merchandising was in breach of faith on the part of
the merchandising firms or by the fact that the owner (Noah's
Ark) was deprived of the possession of the same by fraud,
mistake or conversion of the person to whom the warehouse
receipt/quedan was subsequently negotiated if (PNB) paid
value therefor in good faith without notice of such breach of
duty, fraud, mistake or conversion. (See Article 1518, New Civil
Code). And the creditor (PNB) whose debtor was the owner of
the negotiable document of title (warehouse receipt) shall be
entitled to such aid from the court of appropriate jurisdiction
attaching such document or in satisfying the claim by means as
is allowed by law or in equity in regard to property which
cannot be readily attached or levied upon by ordinary process.
(See Art. 1520, New Civil Code). If the quedans were
negotiable in form and duly indorsed to PNB (the creditor), the
delivery of the quedans to PNB makes the PNB the owner of
the property covered by said quedans and on deposit with
Noah's Ark, the warehouseman. (See Sy Cong Bieng & Co. vs.
Hongkong & Shanghai Bank Corp., 56 Phil. 598).
In the case at bar, We found that the factual bases underlying
the defendant's affirmative defenses (upon which PNB has
moved for summary judgment) are not disputed and have been
stipulated by the parties and therefore do not require
presentation of evidence. PNB's right to enforce the obligation
of Noah's Ark as a warehouseman, to deliver the sugar stock to
PNB as holder of the quedans, does not depend on the
outcome of the third-party complaint because the validity of
the negotiation transferring title to the goods to PNB as holder
of the quedans is not affected by an act of RNS Merchandising
and St. Therese Merchandising, in breach of trust, fraud or
conversion against Noah's Ark.
The Court considers the Appellate Court's conclusions of fact
and law to be correct.
The Trial Judge's argument that the Appellate Court's decision
failed to take account of other "material facts established on
the basis of the pleadings, documentary evidence on record,
stipulations and admissions during the proceedings on the
application for a writ of preliminary attachment," is quite
transparently specious. For the matters cited by His Honor, as
allegedly not examined by the Court of Appeals, were in fact
duly considered by the latter — i.e., that "the various postdated
checks issued by the buyers (RNS Merchandising and St.
Therese Merchandising) in favor of Noah's Ark were
dishonored when presented for payment . . (and hence) the
buyers never acquired title to the sugar evidenced by the
quedans," 3 and that PNB "did not follow the procedure stated
in Article 2112 of the Civil Code." 4 In its decision, as just
pointed out, the Court of Appeals explicitly ruled that the
"validity of the negotiation" of the quedans to PNB" cannot be
impaired by the fact that the negotiation between Noah's Ark
and RNS Merchandising and St. Therese Merchandising was
made in breach of faith on the part of the merchandising firms
or by the fact that the owner (Noah's Ark) was deprived of the
possession of the same by fraud, mistake or conversion . . ." 5
It also ruled that the quedans were negotiable documents and
had been duly negotiated to the PNB which thereby acquired
the rights set out in Article 1513 of the Civil Code," 6 viz.:"
(1) Such title to the goods as the person negotiating the
documents to him had or had ability to convey to a purchaser
in good faith for value and also such title to the goods as the
person to whose order the goods were to be delivered by the
terms of the document had or had ability to convey to a
purchaser in good faith for value; and
(2) The direct obligation of the bailee issuing the document to
hold possession of the goods for him according to the terms of
the document as fully as if such bailee had contracted directly
with him.
The Court of Appeals found correctly that the indications in
the pleadings to the contrary notwithstanding, no substantial
triable issue of fact actually existed, and that certain issues
raised in answer, even if taken as established, would not
materially change the ultimate findings relative to the main
claim. 7 Its decision is entirely in accord with this Court's
rulings regarding the propriety of summary judgments invoked
by the Appellate Tribunal, i.e., Vergara, Sr. v. Suelto, 8 and
Mercado v. Court of Appeals. 9 According to Vergara, for
instance, "even if the answer does tender issues — and
therefore a judgment on the pleadings is not proper — a
summary judgment may still be rendered on the plaintiff's
motion if he can show to the Court's satisfaction that "except
as to the amount of damages, there is no genuine issue as to
any material fact," 10 that is to say, the issues thus tendered
are not genuine, are in other words sham, fictitious, contrived,
set up in bad faith, patently unsubstantial. 11 The
determination may be made by the Court on the basis of the
pleadings, and the depositions, admissions and affidavits that
the movant may submit, as well as those which the defendant
may present in turn."12
In any event, the conclusions of fact and law set out in the
Appellate Court's decision are undeniably binding on all the
parties to the case, the respondent Regional Trial Judge
included. Having been rendered by a competent court within
its jurisdiction, and having become final and executory, the
decision now operates as the immutable law among the
parties, the respondent Trial Judge included; it has become the
law of the case and may no longer, in subsequent proceedings,
be altered or modified in any way, much less reversed or set at
naught, by the latter, or any other judge, not even by the
Supreme Court; it is an unalterable determination of the
propriety of a summary judgment in the action in question,
and upon all the issues therein raised or which could have been
raised relative to the merits of said action.13
The Trial Judge may not evade compliance with the final
judgment of the Court of Appeals on the theory that the latter
had acted only on a mere interlocutory order (the order
denying PNB's motion for summary judgment), while he had
subsequently adjudged the action for specific performance on
the merits. Quite obvious is that the Court of Appeals had
decided that a summary judgment was proper in said action of
specific performance, that this was in truth a determination of
the merits of the suit, that that decision had become final and
executory, and that the decision expressly commanded His
Honor to render such a judgment. Under the circumstances,
the latter's duty was clear and inescapable.
It was not within the Trial Judge's competence or discretion to
take exception to, much less overturn, any of the factual or
legal conclusions laid down by the Court of Appeals in its
verdict. He was as much bound thereby as the private parties
themselves. His only function was to implement and carry out
the Appellate Tribunal's judgment. It was an act of
supererogation, of presumptuousness, on His Honor's part to
disregard the Court's clear and categorical command, and to
dispose of the case in a manner diametrically opposed thereto.
In doing so, the Trial Judge committed grave error which must
forthwith be corrected.
WHEREFORE, the Trial Judge's Decision in Civil Case No.
90-53023 dated June 18, 1992 is REVERSED and SET ASIDE
and a new one rendered conformably with the final and
executory Decision of the Court of Appeals in CA-G.R. SP No.
25938, ordering the private respondents, Noah's Ark Sugar
Refinery, Alberto T. Looyuko, Jimmy T. Go and William T. Go,
jointly and severally:
a) to deliver to the petitioner Philippine National Bank, "the
sugar stocks covered by the Warehouse Receipts/Quedans
which are now in the latter's possession as holder for value and
in due course; or alternatively, to pay (said) plaintiff actual
damages in the amount of P39.1 Million," with legal interest
thereon from the filing of the complaint until full payment;
and
b) to pay plaintiff Philippine National Bank attorney's fees,
litigation expenses and judicial costs hereby fixed at the
amount of one hundred fifty thousand pesos (150,000.00), as
well as the costs.
SO ORDERED.
Padilla, Regalado, Nocon and Puno, JJ., concur.

THIRD DIVISION
[G.R. NO. 156178 - January 20, 2006]
PHILIPPINE NATIONAL BANK and ASSET
PRIVATIZATION TRUST, Petitioners, v.
REFRIGERATION INDUSTRIES, INC., Respondent.
DECISION
QUISUMBING, J.:
This is a Petition for Review on Certiorari seeking reversal of
the Decision1 dated November 22, 2002, of the Court of
Appeals in CA-G.R. CV No. 51912. The decision affirmed the
Summary Judgment2 dated August 7, 1995, of the Regional
Trial Court (RTC) of Makati, Branch 61, in Civil Case No.
13944.
The facts in this case are culled from the records.
Petitioners are the Philippine National Bank (PNB), a private
banking corporation, and the Asset Privatization Trust (APT),
an agency created by Proclamation No. 50 that takes title to or
possession, conserves, provisionally manages, and disposes
assets, which have been identified for privatization or
disposition, for the benefit of the National Government.
Respondent Refrigeration Industries Inc. (RII) is a
manufacturer of refrigerators and compressors.
Prior to 1984, respondent RII occupied a portion of the
assembly plant of Delta Motor Corporation (DMC). RII
installed in the plant equipment, machinery and other chattels
RII used in its business.3
In February 1984, PNB, then a government-owned and
controlled bank, foreclosed several parcels of real estate and
chattels of DMC located at the DMC Compound. In an auction
of the foreclosed properties, PNB was the highest bidder. Thus,
it took possession of all chattels inside the DMC compound,
both as owner of chattels and as mortgagee of the remaining
properties.4
On June 18, 1984 when PNB took possession of the DMC
compound, RII demanded the release of its properties still
inside the compound, now the subject of the case, after RII
made statements claiming ownership over them. PNB allowed
RII to remove some of its personal properties from the DMC
compound, upon the latter's showing of proof of ownership.
However, respondent failed to produce any proof of
ownership,5 with respect to the contested properties found in
Annex "C" of the Complaint. PNB's refusal to release the
subject properties led to the filing of a complaint by RII for
Recovery of Possession with Damages before the RTC of
Makati on June 10, 1986.
At all the scheduled pre-trial conferences, PNB consistently
manifested in court its willingness to release the chattels
conditioned upon RII's showing of evidence of ownership.
Eventually, some of the properties were released.
By virtue of Proclamation No. 50 as implemented by
Administrative Circular No. 14 dated February 27, 1989,
certain properties of RII inside DMC's compound, with some
other acquired assets of PNB covered by the Circular, were
transferred to the Asset Privatization Trust (APT). Hence in
1992, APT was impleaded as a party-defendant. Pursuant to
Republic Act No. 8758,6 the corporate existence of APT
expired on December 31, 2000. On December 6, 2000, former
President Joseph Estrada signed Executive Order No. 323
creating the Privatization and Management Office (PMO)
which succeeded the APT. At the time, RII had not yet shown
additional evidence to support its claim over the remaining
personal properties in PNB's possession.
Six (6) years later, on February 10, 1995, RII filed a Motion for
Summary Judgment.7 It averred that there was no genuine
issue to any material fact except the issue on damages, costs
and attorneys' fees. RII alleged that during the pre-trial
conference, PNB manifested to APT, in a letter8 dated May 11,
1989, that the machineries and equipments of RII listed in
Annex "C" of the complaint were erroneously transferred to
APT, and that in a letter9 dated May 31, 1989, APT
acknowledged the mistakes and agreed to release the
properties to the authorized representative of RII.
Both PNB and APT (PMO) opposed the motion on the ground
that there still existed a genuine factual issue, which was the
ownership of the chattels.
On August 7, 1995, a Summary Judgment was rendered by the
lower court, the decretal portion of which reads:
WHEREFORE, premises above considered, and there is no
genuine issue left to be litigated, the motion for summary
judgment is hereby GRANTED, and judgment is hereby
rendered for plaintiff as against defendants who are hereby
ORDERED to effect the return of all the chattels and/or
personal properties of plaintiff that were taken by them as
stated in Annex "C" of the Complaint.
SO ORDERED.10
PNB appealed to the Court of Appeals.
On November 22, 2002, the Court of Appeals affirmed in toto
the trial court's decision. Hence, this petition raising a single
issue as follows:
THE HONORABLE COURT OF APPEALS DID NOT
CONSIDER THE EXISTENCE OF A GENUINE ISSUE IN
THIS CASE, THAT OF THE OWNERSHIP OF THE
CONTESTED CHATTELS, THAT WOULD PRECLUDE
ISSUANCE OF SUMMARY JUDGMENT.11
Simply put, was the summary judgment proper? Did the
appellate court err in affirming the trial court's
decision?cralawlibrary
Petitioners contend that the Court of Appeals gravely erred in
affirming the summary judgment. There was no admission
made as to RII's ownership of the contested chattels, thus,
there still exists a genuine issue as to a material fact that
precludes the issuance of summary judgment.
After considering the records of this case, we find that
petitioners' contention could not be upheld. We agree that the
Court of Appeals correctly held that the summary judgment
was properly rendered by the trial court.
Firstly, it may be noted that PNB admitted in its May 11, 1989
letter to APT that the contested chattels belonged to RII, but
were erroneously taken during the foreclosure of DMC's
properties; that these were eventually transferred to APT.
Secondly, we also note that APT admitted that PNB wrote the
letter dated May 11, 1989; and that APT wrote a letter dated
May 29, 1989 to PNB. With these admissions, there is no
genuine issue concerning RII's ownership of the chattels and
their erroneous delivery to APT had remained. A "genuine
issue" is an issue of fact which requires the presentation of
evidence. When the facts as pleaded appear uncontested or
undisputed, then there is no real or genuine issue or question
as to the facts.12 ςηαñrοblεš νιr†υαl lαω
lιbrαrÿ
Summary judgment, as prescribed by the rules must then
ensue as a matter of law, to weed out sham claims or defenses
at an early stage of the litigation, to avoid the expense and loss
of time involved in a trial, and to separate what is formal or
pretended in denial or averment from what is genuine and
substantial, so that only the latter may subject a suitor to the
burden of trial.13
Contrary to petitioners' claim that there was no admission on
their part that respondent owned the chattels, our review of
the records shows that petitioners failed to either specifically
deny or directly assail and raise as an issue, the validity of the
letter dated May 11, 1989 and the letter dated May 29, 1989.
Their failure to deny the genuineness and due execution of the
said documents amounts to a judicial admission pursuant to
Section 8,14 Rule 8 of the Rules of Court.
Judicial admissions do not require proof and may not be
contradicted in the absence of a prior showing that the
admissions had been made through palpable mistake.15 These
letters are deemed admitted as evidence, and they likewise
supersede the defenses interposed by petitioners in their
respective answers.
It may lastly be recalled that from the very start, PNB
consistently manifested its willingness to release the said
properties upon respondent's proof of ownership over them.
The correspondence between the parties shows that PNB
actually admitted that the subject chattels belonged to RII but
were erroneously transferred to petitioner APT. Conformably
then, the trial court's summary judgment is proper and correct.
No reversible error was committed by the Court of Appeals in
affirming it.
WHEREFORE, the instant petition is DENIED for lack of
merit. The assailed Decision dated November 22, 2002 of the
Court of Appeals in CA-G.R. CV No. 51912 is AFFIRMED.
Costs against petitioners.
SO ORDERED.
2