I. Title: Bitanga v. Pyramid
G.R. 173526, 28 August 2008 CA: Modified, Marilyn not liable under CA or guaranty.
II. Doctrine
For a summary judgment to be proper movant must establish two requisites: (a) there must
be no genuine issue as to any material fact, except for the amount of damages; and (b) the
party presenting the motion for summary judgment must be entitled to a judgment as a
matter of law. Where, on the basis of the pleadings of a moving party, including documents
appended thereto, no genuine issue as to a material fact exists, the burden to produce a
genuine issue shifts to the opposing party. If the opposing party fails, the moving party is
entitled to a summary judgment.
III. Facts
Pyramid entered into an agreement with Macrogen (where Benjamin is the president)
to construct a Shoppers Gold Building. Pyramid commenced the construction,
however, Macrogen failed to settle the billings. Benjamin assured Pyramid that it
would be paid and requested it to continue the construction. Relying on such
assurance, Pyramid continued the construction. In August 1988, Pyramid suspended
the construction because Macrogen failed to comply with condition imposed for its
continuation. Pyramid then instituted with CIAC a case for arbitration seeking
payment. Benjamin conveyed willingness to amicably settle.
Parties then entered into a Compromise Agreement wherein Macrogen agreed to pay
P6M in 6 equal installments, and in case of default for 2 successive monthly
installments, whole amount would be due. Benjamin guaranteed the obligation of
Macrgen by executing a Contract of Guaranty. CIAC: approved the Compromise
Agreement. Macrogen failed and refused to pay all the monthly installments, Pyramid
then moved for issuance of writ of execution, which CIAC granted. Sheriffs return:
Macrogens only property is a bank deposit of P20K with Planters Bank.
Written & verbal demands were sent to Benjamin as guarantor to pay/point out
available properties of Macrogen sufficient to cover its debt, however the same were
left unheeded. Re: Liab of Marilyn, Macrogen 99% owned by AAHI, which is owned
99% by Marilyn. Construction redounded to the benefit of both and due to her
enormous interest, she cannot be unaware of Macrogens obli.
Pyramid Construction filed a Complaint for specific performance and damages with
application for the issuance of a writ of preliminary attachment v. Benjamin and
Marilyn Bitanga.
Marilyns MD: no cause of action, not a party to the compromise agreement and did
not co-sign the guaranty contract. RTC: denied for lack of merit. Sec. 4 Rule 3. Sps
as parties shall sue and be sued jointly except as provided by law. Benjamins
Answer: (1) neither made representations that Macrogen would faithfully comply
with its obli under the Compromise Agreement (CA) nor offer to gurantee the same.
In fact it was Pyramid who required Macrogen to offer some form of security before
agreeing with the CA; (2) Marilyn not aware of the oblis he assumed; (3) Entitled to
benefit of excussion, uncollected credits of Macrogen enough to cover its debt.
Pyramids Motion for summary judgment: (1) Bitangas admission during pre-trial of
the genuineness and due execution of the Contract of Guaranty. (2) Contention re:
excussion not a genuine issue, and had already exhausted all legal remedies to collect
from Macrogen but was unsuccessful as proven by the Sheriffs return. (3) Bitangas
forfeited their right to avail of excussion since they ignored the demand letter. (2)
claim of Marilyns non-participation a sham. Opposing the motion, Bitangas claim
that the person who received the demand letter was neither an employee of Macrogen
nor authorize to receive it.
RTC: Partial decision, Bitangas to pay P6M less P20k from Macrogen; MR denied.
Hence this petition for review.
IV. Issues
(1) Whether CA erred in affirming the validity of partial summary judgment. (NO)
V. Held
Rule 35 Sec. 1. Summary judgment for claimant. A party seeking to recover upon a claim,
counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the
pleading in answer thereto has been served, move with supporting affidavits, depositions
or admissions for a summary judgment in his favor upon all or any part thereof.
For a summary judgment to be proper movant must establish two requisites: (a) there must
be no genuine issue as to any material fact, except for the amount of damages; and (b) the
party presenting the motion for summary judgment must be entitled to a judgment as a
matter of law. Where, on the basis of the pleadings of a moving party, including documents
appended thereto, no genuine issue as to a material fact exists, the burden to produce a
genuine issue shifts to the opposing party. If the opposing party fails, the moving party is
entitled to a summary judgment.
In this case, the issue re: propriety of the service of the demand letter is a sham issue.
Benjamin does not deny the receipt of the demand letter from the Pyramid. He merely
raises a howl on the impropriety of service thereof, stating that the address to which the
said letter was sent was not his residence but the office of Macrogen.
When Benjamin signed the Guaranty Contract, his address was the same where the
demand letter was sent. He neither denies that the address is of Macrogen nor denies that
this is his office; he merely insists that the one who received it was not an employee.
However no evidence was presented to substantiate his claim.
Under Section 6, Rule 13 of the Rules of Court, there is sufficiency of service when the
papers, or in this case, when the demand letter is personally delivered to the party or his
counsel, or by leaving it in his office with his clerk or with a person having charge thereof,
such as what was done in this case.
Re: Benefit of Excussion
Benjamin cannot avail of the same for his failure to comply with Art 2060 which requires
that he must set it up against the creditor upon the latters demand for payment and point
out to the creditor available property of the debtor within the Philippines sufficient to
cover the amount of the debt.
In this case, despite having been served a demand letter at his office, Benjamin still failed
to point out to Pyramid properties of Macrogen sufficient to cover its debt. Such failure
forecloses his right to set it up. Further Under 2059(5), excussion shall not take place if it
may be presumed that execution of principal dr;s prop would not result in satisfaction of
the obli, such as this case.
Petition DENIED, CA affirmed.