CASENT REALTY DEVELOPMENT CORP. v.

PHILBANKING CORPORATION,
GR No. 150731, 2007-09-14 RULE 33
Facts:
In 1984, petitioner Casent Realty Development Corporation executed two
promissory notes in favor of Rare Realty Corporation (Rare Realty) involving
the amounts of PhP 300,000 (PN No. 84-04) and PhP 681,500 (PN No. 84-05).
Respondent alleged that despite demands, petitioner failed to pay the
promissory notes upon maturity such that its obligation already amounted to
PhP 5,673,303.90 as of July 15, 1993. Respondent filed on July 20, 1993 a
complaint before the Makati City RTC for the... collection of said amount
Thus, petitioner, by way of compulsory counterclaim, alleged that it made an
overpayment of approximately PhP 4 million inclusive of interest based on
Central Bank Reference Lending Rates on dates of overpayment. Petitioner
further claimed moral and exemplary damages and... attorney's fee, amounting
to PhP 4.5 million plus the costs of suit as a consequence of respondent's
insistence on collecting
The parties failed to reach an amicable settlement during the pre-trial
conference. Thereafter, respondent presented its evidence and formally offered
its exhibits. Petitioner then filed a Motion for Judgment on Demurrer to the
Evidence,[11] pointing... out that the plaintiff's failure to file a Reply to the
Answer which raised the Dacion and Confirmation Statement constituted an
admission of the genuineness and execution of said documents; and that since
the Dacion obliterated petitioner's obligation covered by... the promissory
notes, the bank had no right to collect anymore.
Respondent subsequently filed an Opposition[12] which alleged that: (1) the
grounds relied upon by petitioner in its demurrer involved its defense and not
insufficiency of evidence; (2) the Dacion and Confirmation Statement had yet
to be offered in... evidence and evaluated; and (3) since respondent failed to file
a Reply, then all the new matters alleged in the Answer were deemed
controverted.[13]
The trial court ruled in favor of petitioner and dismissed the complaint
through the May 12, 1999 Order,... The appellate court ruled that under the
Rules of Civil Procedure, the only issue to be resolved in a demurrer is whether
the plaintiff has shown any right to relief under the facts presented and the
law. Thus, it held that the trial court erred when it considered the Answer...
which alleged the Dacion, and that its genuineness and due execution were
not at issue. It added that the court a quo should have resolved whether the
two promissory notes were covered by the Dacion, and that since petitioner's
demurrer was granted, it... had already lost its right to present its evidence
Issues:
WHETHER OR NOT THE COURT OF APPEALS ERRED IN EXCLUDING THE
PETITIONER'S AFFIRMATIVE DEFENSES IN ITS ANSWER IN RESOLVING A
DEMURRER TO EVIDENCE
Does respondent's failure to file a Reply and deny the Dacion and Confirmation
Statement under oath constitute a judicial admission of the genuineness and
due execution of these documents?
Should judicial admissions be considered in resolving a demurrer to
evidence? If yes, are the judicial admissions in this case sufficient to warrant
the dismissal of the complaint?
Ruling:
In Gutib v. Court of Appeals, we defined a demurrer to evidence as "an
objection by one of the parties in an action, to the effect that the evidence
which his adversary produced is insufficient in point of law, whether true or
not, to make out a case or sustain the... issue."[21]
What should be resolved in a motion to dismiss based on a demurrer to
evidence is whether the plaintiff is entitled to the relief based on the facts and
the law. The evidence contemplated by the rule on demurrer is that which
pertains to the merits of the... case, excluding technical aspects such as
capacity to sue.[22] However, the plaintiff's evidence should not be the only
basis in resolving a demurrer to evidence. The "facts" referred to in Section 8
should include all the means sanctioned by... the Rules of Court in
ascertaining matters in judicial proceedings. These include judicial
admissions, matters of judicial notice, stipulations made during the pre-trial
and trial, admissions, and presumptions, the only exclusion being the
defendant's evidence.
On appeal to the CA, respondent claimed that even though it failed to file a
Reply, all the new matters alleged in the Answer are deemed controverted
anyway, pursuant to Rule 6, Section 10:
Section 10. Reply.--A reply is a pleading, the office or function of which is to
deny, or allege facts in denial or avoidance of new matters alleged by way of
defense in the answer and thereby join or make issue as to such new matters.
If a party does... not file such reply, all the new matters alleged in the answer
are deemed controverted.
We agree with petitioner. Rule 8, Section 8 specifically applies to actions or
defenses founded upon a written instrument and provides the manner of
denying it. It is more controlling than Rule 6, Section 10 which merely
provides the effect of failure to file a
Reply. Thus, where the defense in the Answer is based on an actionable
document, a Reply specifically denying it under oath must be made; otherwise,
the genuineness and due execution of the document will be deemed
admitted.[23] Since respondent... failed to deny the genuineness and due
execution of the Dacion and Confirmation Statement under oath, then these
are deemed admitted and must be considered by the court in resolving the
demurrer to evidence. We held in Philippine American General
Insurance Co., Inc. v. Sweet Lines, Inc. that "[w]hen the due execution and
genuineness of an instrument are deemed admitted because of the adverse
party's failure to make a specific verified denial thereof, the instrument need
not be presented... formally in evidence for it may be considered an admitted
fact."[24]
In any case, the CA found that:
From the facts of the case, the genuineness and due execution of the Dacion
en Pago were never put to issue. Genuineness merely refers to the fact that
the signatures were not falsified and/or whether there was no substantial
alteration to the document.
While due execution refers to whether the document was signed by one with
authority.[
Principles:

GMA NETWORK v. CENTRAL CATV, GR No. 176694, 2014-07-18 rule 33

Facts:
Sometime in February 2000, the petitioner, together with the Kapisanan ng
mga Brodkaster ng Pilipinas, Audiovisual Communicators, Incorporated,
Filipinas Broadcasting Network and Rajah Broadcasting Network, Inc.
(complainants), filed with the NTC a complaint against the... respondent to
stop it from soliciting and showing advertisements in its cable television
(CATV) system, pursuant to Section 2 of Executive Order (EO) No. 205.[5]
Under this provision, a grantee's authority to operate a CATV system shall...
not infringe on the television and broadcast markets. The petitioner alleged
that the phrase "television and broadcast markets" includes the commercial or
advertising market.
In its answer, the respondent admitted the airing of commercial advertisement
on its CATV network but alleged that Section 3 of EO No. 436, which was
issued by former President Fidel V. Ramos on September 9, 1997, expressly
allowed CATV providers to carry advertisements and... other similar paid
segments provided there is consent from their program providers.[6]
After the petitioner presented and offered its evidence, the respondent filed a
motion to dismiss by demurrer to evidence claiming that the evidence
presented by the complainants failed to show how the respondent's acts of
soliciting and/or showing advertisements infringed upon... the television and
broadcast market.[7]
The NTC granted the respondent's demurrer to evidence and dismissed the
complaint.
It ruled that since EO No. 205 does not define "infringement," EO No. 436
merely clarified or filled-in the details of the term to mean that the CATV
operators may show advertisements, provided... that they secure the consent
of their program providers. In the present case, the documents attached to the
respondent's demurrer to evidence showed that its program providers have
given such consent. Although the respondent did not formally offer these
documents as... evidence, the NTC could still consider them since they formed
part of the records and the NTC is not bound by the strict application of
technical rules.[8]
With the denial of its motion for reconsideration,[11] the petitioner went to the
CA, alleging that the NTC committed grave procedural and substantive errors
in dismissing the complaint.
The CA upheld the NTC ruling. The NTC did not err in considering the
respondent's pieces of evidence that were attached to its demurrer to evidence
since administrative agencies are not bound by the technical rules of
procedure.[12]
Issues:
 1. Whether the CA erred in affirming the order of the NTC which granted the
respondent's motion to dismiss by demurrer to evidence.

Ruling:
The remedy of a demurrer to evidence is applicable in the proceedings before
the NTC, pursuant to Section 1, Rule 9, Part 9 of its Rules of Practice and
Procedure which provides for the suppletory application of the Rules of Court.
Rule 33[22] of the Rules of Court provides for the rule on demurrer to evidence
In other words, the issue to be resolved in a motion to dismiss based on a
demurrer to evidence is whether the plaintiff is entitled to the relief prayed for
based on the facts and the law.
The "facts" referred to in Section 8 should include all the means sanctioned by
the Rules of Court in... ascertaining matters in judicial proceedings. These
include judicial admissions, matters of judicial notice, stipulations made
during the pre-trial and trial, admissions, and presumptions, the only
exclusion being the defendant's evidence.
In granting the demurrer to evidence in the present case, the NTC considered
both the insufficiency of the allegations in the complaint and the insufficiency
of the complainants' evidence in light of its interpretation of the provisions of
EO No. 205 and EO No. 436. The
NTC ruled that the complainants, including the petitioner, failed to prove by
substantial evidence that the respondent aired the subject advertisements
without the consent of its program providers, as required under EO No. 436.
The NTC, therefore, has issued the assailed order... upon a consideration of
the applicable laws and the evidence of the petitioner. On this score, the grant
of the demurrer suffers no infirmity.
However, the NTC further extended its consideration of the issue to the
respondent's pieces of evidence that were attached to its demurrer to evidence.
On this score, we agree with the petitioner that the NTC erred.
Rule 33 of the Rules of Court, as explained in our ruling in Casent, proscribes
the court or the tribunal from considering the defendant's evidence in the
resolution of a motion to dismiss based on a demurrer to evidence.
While an administrative agency is not strictly bound by technical rules of
procedure in the conduct of its administrative proceedings, the relaxation of
the rules should not result in violating fundamental evidentiary rules,
including due process.[25]
In the present case, the NTC proceeded against the very nature of the remedy
of demurrer to evidence when it considered the respondent's evidence,
specifically the certifications attached to the respondent's demurrer to
evidence. Despite the petitioner's... objections,[26] the NTC disregarded the
rule on demurrer by allowing the submission of the respondent's evidence
while depriving the petitioner of the opportunity to question, examine or refute
the submitted documents.[27]
That the petitioner had the chance to peruse these documents is of no
moment. In a demurrer to evidence, the respondent's evidence should not have
been considered in the first place. As the NTC opted to consider the
respondent's evidence, it should not have resolved the case... through the
remedy of demurrer but instead allowed the respondent to formally present its
evidence where the petitioner could properly raise its objections. Clearly, there
was a violation of the petitioner's due process right.
Principles:

ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION, Petitioner,

vs.
SANNAEDLE CO., LTD. R.34
Facts
Pursuant to the Memorandum of Agreement, petitioner made various
payments amounting to US$3,129,667.32 leaving a balance of
US$615,620.33. Respondent claims that it made several written demands for
petitioner to pay the said balance, but the latter continuously refused to heed
its plea.
Thereafter, petitioner filed its Answer with Counterclaim
Respondent then moved for judgment on the pleadings on the ground that the
Answer admitted all material allegations of the Complaint and, therefore, failed
to tender an issue.
n effect, admitted the existence of the Memorandum of Agreement and its
failure to pay the balance despite repeated demands.
RTC
In a Judgment5 dated October 6, 2000, the Regional Trial Court (RTC) of
Makati City rendered judgment in favor of respondent.
The Court notes that in the Answer with Counterclaim of the [petitioner], the
execution of the Memorandum of AgreementFurther, it did not deny
specifically the claim of the [respondent] of being entitled to collect the said
amount of US$615,620.33
Court of appeals
Affirmed the decisions of trial court.
ISSUE
Whether or not the judgment on pleading is proper?
HELD
Section 1, Rule 34 of the 1997 Rules of Civil Procedure
Sec. 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. However, in actions for declaration of nullity or annulment of
marriage or for legal separation, the material facts alleged in the complaint
shall always be proved.1

In this case it is irrefutable that petitioner acknowledged having entered

into a Memorandum of Agreement with respondent and that it still has an
unpaid balance of US$615,620.33. While petitioner allegedly raised affirmative
defenses, i.e., defect in the certification of non-forum shopping, no legal
capacity to sue and fortuitous event, the same cannot still bar respondent
from seeking the collection of the unpaid balance. Other than these affirmative
defenses, petitioner’s denial neither made a specific denial that a
Memorandum of Agreement was perfected nor did it contest the genuineness
and due execution of said agreement.

G.R. No. 163280, February 2, 2010

DORIS U. SUNBANUN
vs
AURORA B. GO

CARPIO, J.

Facts of the Case:

The petitioners claimed that their family has long been known in the
community to be engaged in the water supply business; they operated the
“Rovila Water Supply” from their family residence and were engaged in the
distribution of water to customers in Cebu City. The petitioners alleged that Lilia
was a former trusted employee in the family business and claimed ownership
over the family business through a corporation named “Rovila Water Supply,
Inc.” (Rovila Inc.) Upon inquiry with the Securities and Exchange Commission
(SEC), the petitioners claimed that Rovila Inc. was surreptitiously formed with
the respondents as the majority stockholders.The respondents filed a first
motion to dismiss on the ground that the RTC had no jurisdiction over an intra–
corporate controversy however the RTC denied the motion. Petitioners amended
their complaint, with leave of court, when Lourdes and Luciano died.

The respondents filed their Answer and petitioners’ sister,

LagrimasPacaña–Gonzales, filed a motion for leave to intervene and her answer–
in–intervention was granted by the trial court. At the subsequent pre–trial, the
respondents manifested to the RTC that a substitution of the parties was
necessary in light of the deaths of Lourdes and Luciano. The RTC issued a pre–
trial order where one of the issues submitted was whether the complaint should
be dismissed.Respondents again filed a motion to dismiss on the grounds,
among others, that the petitioners are not the real parties in interest to institute
and prosecute the case and that they have no valid cause of action against the
respondents. The petitioners filed the present petition.The respondents
reiterated in their comment that the petitioners are not the real parties in
interest.

They likewise argued that they moved for the dismissal of the case during
the pre–trial conference due to the petitioners’ procedural lapse in refusing to
comply with a condition precedent, which is, to substitute the heirs as plaintiffs.
The respondents also argued that the grounds invoked in their motion to dismiss
were timely raised, pursuant to Section 2, paragraphs g and i, Rule 18 of the
Rules of Court. Specifically, the nature and purposes of the pre–trial include,
among others, the dismissal of the action, should a valid ground therefor be
found to exist; and such other matters as may aid in the prompt disposition of
the action.

Issue of the Case:

Whether or not the motion to dismiss filed by respondents during the

conclusion of pre-trial conference is valid and binding.

Ruling of the Court:

The RTC denied the respondents’ motion to dismiss. It ruled that, save for
the grounds for dismissal which may be raised at any stage of the proceedings,
a motion to dismiss based on the grounds invoked by the respondents may only
be filed within the time for, but before, the filing of their answer to the amended
complaint.

Thus, even granting that the defenses invoked by the respondents are
meritorious, their motion was filed out of time as it was filed only after the
conclusion of the pre–trial conference. Furthermore, the rule on substitution of
parties only applies when the parties to the case die, which is not what happened
in the present case. The RTC likewise denied the respondents’ motion for
reconsideration. The CA granted the petition and ruled that the RTC committed
grave abuse of discretion as the petitioners filed the complaint and the amended
complaint as attorneys–in–fact of their parents. As such, they are not the real
parties in interest and cannot bring an action in their own names; thus, the
complaint should be dismissed pursuant to the Court’s ruling in Casimiro v.
Roque and Gonzales.

Both the RTC and the CA found that the motion to dismiss was only filed
after the filing of the answer and after the pre–trial had been concluded. Because
there was no motion to dismiss before the filing of the answer, the respondents
should then have at least raised these grounds as affirmative defenses in their
answer. The RTC’s assailed orders did not touch on this particular issue but the
CA ruled that the respondents did, while the petitioners insist that the
respondents did not. In the present petition, the petitioners reiterate that there
was a blatant non–observance of the rules when the respondents did not amend
their answer to invoke the grounds for dismissal which were raised only during
the pre–trial and, subsequently, in the subject motion to dismiss.

Our examination of the records shows that the CA had no basis in its
finding that the respondents alleged the grounds as affirmative defenses in their
answer. The respondents merely stated in their petition for certiorari that they
alleged the subject grounds in their answer. However, nowhere in the petition
did they support this allegation; they did not even attach a copy of their answer
to the petition. It is basic that the respondents had the duty to prove by
substantial evidence their positive assertions. Considering that the petition for
certiorari is an original and not an appellate action, the CA had no records of
the RTC’s proceedings upon which the CA could refer to in order to validate the
respondents’ claim. Clearly, other than the respondents’ bare allegations, the
CA had no basis to rule, without proof, that the respondents alleged the grounds
for dismissal as affirmative defenses in the answer. The respondents, as the
parties with the burden of proving that they timely raised their grounds for
dismissal, could have at least attached a copy of their answer to the petition.
This simple task they failed to do.

WHEREFORE, the Court DENIES the petition. The Court AFFIRMS the 30
September 2003 Decision and the 18 March 2004 Resolution of the Court of
Appeals in CA-G.R. CV No. 67836.

Tan v Dela Vega Rule 35

OA: Petition for quieting of title and declration of nullity of Free Patent against
heris of Macario Mencias.
1992: Respondents learned that the defendant-heirs are ejecting the
occupants of the contested lot – that Mencias obtained a title of the said lot
previously and such has been inherited by his heirs. Respondents state that
the said lot is a mere portion of their own lot which is covered by their TCT.
Plaintiff-heirs state that their right to the said lot arises from a different TCT
and that Respondents’ assertion is incorrect.
Said lot was sold already by the respondent-heirs to New Atlantis Real Estate
who joins this petition as co-plaintiff raising the defense of buyers in good faith
(given that the annotation was not seen in the TCT of the heirs).
For failure to file their Answer, defendant Aurora M. Gabat,11 public
defendants Secretary of the Department of Environment and Natural
Resources, Director of Land Management Bureau and the Register of Deeds of
Marikina,12 were declared in default.
2003: Respondents filed a motion for judgment on the pleadings, granted. TC
ruled in favor of respondents and ruled that free-patent of Mencias is void and
the subsequent sale is invalid. CA affirms.

ISSUE: Whether or not the judgment on the pleadings is proper in this case

HELD:
In this case, we find that the trial court erred in rendering judgment on
the pleadings because the pleadings filed by the parties generated
ostensible issues that necessitate the presentation of evidence.
Respondents’ action for declaration of nullity of Free Patent No. 495269 and
the titles derived therefrom is based on their claim that the lot titled in the
name of petitioners, is a portion of a bigger tract of land previously titled in the
name of their (respondents) predecessors-in-interest.
It is clear from the foregoing that the pleadings filed in the instant case
generated the following issues: (1) whether respondents’ TCT No. 257152 is
valid; (2) whether Lot 89 is covered by TCT No. 257152; and (3) whether
petitioners are purchasers in good faith. This is clearly not a proper case for
judgment on the pleadings considering that the Answers tendered factual
issues. The trial court rendered a summary judgment on March 21, 2003 and
not a judgment on the pleadings.

In any case, a summary judgment is likewise not warranted in this case

as there are genuine issues which call for a full blown trial. 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.20

In the instant case, presentation of evidence is necessary to determine the

validity of TCT No. 22395 from which respondents’ title (TCT No. 257152) was
derived. As alleged by defendant heirs, TCT No. 22395 was a mere
reconstitution of TCT No. 45046, which per verification from the Register of
Deeds of Rizal pertain to a different piece of land measuring only about 356
square meters and located in San Juan, Rizal. These allegations were never
refuted by respondents, hence, they cannot be simply brushed aside by the
trial court.

SPOUSES EDUARDO B. EVANGELISTA and EPIFANIA C. EVANGELISTA,

Petitioners,
vs.
MERCATOR FINANCE CORP., LYDIA P. SALAZAR, LAMEC'S** REALTY AND
DEVELOPMENT CORP. and the REGISTER OF DEEDS OF BULACAN,
Respondents.

1. Petitioners filed a complaint1 for annulment of titles against respondents,

Mercator Finance Corporation, Lydia P. Salazar, Lamecs Realty and
Development Corporation
- they are the registered owners of 5 parcels of land contained in the Real
Estate Mortgage executed by them and Embassy Farms, Inc.
- MAIN CONTENTION: they executed the Real Estate Mortgage in favor of
Mercator ONLY as officers of Embassy Farms.
- They did not receive the proceeds of the loan evidenced by a promissory note,
as all of it went to Embassy Farms.
- so the mortgage was without any consideration as to them since they did not
personally obtain any loan or credit accommodations. There being no principal
obligation on which the mortgage rests, the real estate mortgage is void.
- now they're assailing the validity of the foreclosure proceedings by mercator ,
the sale in the public auction, new tct's, and subsequent sale to Salazar, and
the subsequent sale and transfer to herein respondent Lamecs.

2. Mercator:
- contended that "on February 16, 1982, plaintiffs executed a Mortgage in
favor of defendant Mercator for and in consideration of certain loans and other
forms of credit accommodations given by mercator, amounting to P844,625,
and those that mortgagee may extend to the plaintiff mortgagors.
- since petitioners and Embassy Farms signed the promissory note as co-
makers, aside from the Continuing Suretyship and the succeeding promissory
notes restructuring the loan, then petitioners are jointly and severally liable
with Embassy Farms.
- Due to their failure to pay the obligation, the foreclosure and subsequent sale
of the mortgaged properties are valid.

3. Respondents Salazar and Lamecs:

- innocent purchasers for value and in good faith, relying on the validity of the
title of Mercator.
- they are guilty of laches and estoppel. It was only after a lapse of almost ten
(10) years from the foreclosure of the property and the subsequent sales that
they made their claim.

4. After pre-trial, Mercator moved for summary judgment on the ground that
except as to the amount of damages as petitioners had admitted the existence
of the promissory note, the continuing suretyship agreement and the
subsequent promissory notes restructuring the loan, hence, there is no
genuine issue regarding their liability. All transacations were valid.

5. Petitioners opposed the motion for summary judgment claiming that

because their personal liability to Mercator is at issue, there is a need for a
full-blown trial.

6. RTC granted the motion for summary judgement and dismissed the
complaint:
- the liability of the signatories thereto are solidary in view of the phrase
"jointly and severally."
- On the promissory note the signatures of Eduardo B. Evangelista, Epifania C.
Evangelista and another signature of Eduardo B. Evangelista below the words
Embassy Farms, Inc. It is crystal clear then that the plaintiffs-spouses signed
the promissory note NOT only as officers of Embassy Farms but in their
personal capacity.
- Plaintiffs by affixing their signatures thereon in a dual capacity have bound
themselves as solidary debtor(s) with Embassy Farms, Inc. to payMercator
- That the principal contract of loan is void for lack of consideration, in the
light of the foregoing is untenable. MFR denied.

issue: WON they are not personally liable, Embassy Farms only
held: No

1. Summary judgement proper: there are no genuine issues raised by

petitioners. Petitioners do not deny that they obtained a loan from Mercator.
They merely claim that they got the loan as officers of Embassy Farms without
intending to personally bind themselves or their property. However, a simple
perusal of the promissory note and the continuing suretyship agreement
shows otherwise. These documentary evidence prove that petitioners are
solidary obligors with Embassy Farms.

2. The note was signed at the bottom by petitioners Eduardo B. Evangelista

and Epifania C. Evangelista, and Embassy Farms, Inc. with the signature of
Eduardo B. Evangelista below it.

3. The Continuing Suretyship Agreement also proves the solidary obligation of

petitioners ((3) The obligations hereunder are joint and several and
independent of the obligations of the Principal. )

4. as to the argument that there is an ambiguity in the wording of the

promissory note and that since it was Mercator who provided the form, then
the ambiguity should be resolved against it.

SC SAYS: Courts can interpret a contract only if there is doubt in its letter.25
But, an examination of the promissory note shows no such ambiguity.
Besides, assuming arguendo that there is an ambiguity, Section 17 of the
Negotiable Instruments Law states, viz:
SECTION 17. Construction where instrument is ambiguous. – Where the
language of the instrument is ambiguous or there are omissions therein, the
following rules of construction apply:
(g) Where an instrument containing the word "I promise to pay" is signed by two
or more persons, they are deemed to be jointly and severally liable thereon.

5. as to the argument that: the promissory note does not convey their true
intent in executing the document.
SC SAYS: NO. Even if petitioners intended to sign the note merely as officers
of Embassy Farms, still they executed a continuing suretyship agreement. A
surety is one who is solidarily liable with the principal. Petitioners cannot
claim that they did not personally receive any consideration for the contract for
well-entrenched is the rule that the consideration necessary to support a
surety obligation need not pass directly to the surety, a consideration moving
to the principal alone being sufficient. A surety is bound by the same
consideration that makes the contract effective between the principal parties
thereto.

IN VIEW WHEREOF, the petition is dismissed.

BPI v Sps. Yu || Gr. No 184122 || Jan 20, 2010 r.35

Doctrine: A summary judgment is apt when the essential facts of the case are
uncontested or the parties do not raise any genuine issue of fact.

Summary: Spouses Yu as Tuanson Builders borrowed P75m from FEBTC

secured by real estate mortgages. Unable to pay, they asked for a restructuring
of the loan which was granted. However, they still failed to pay. They asked
BPI to release some mortgaged lands as the value exceeded the amount of the
total debt but this was ignored. Sps Yu withheld their amortizations and thus
BPI extra-judicially foreclosed. Sps Yu sought the annulment of the foreclosure
sale. A compromise agreement was entered into between Sps Yu and
Magnacraft dropping the charges against the latter. Sps Yu filed their new
complaint before the RTC against BPI for recovery of alleged excessive penalty
charges, attorney’s fees, foreclosure expenses that the bank caused to be
incorporated in the price of the auctioned properties. Yus claimed that BPI was
in estoppel to claim more than the amount stated in its published notices.
Consequently, it must turn over the excess bid of P6m. After pre-trial, the Yus
moved for summary judgment, pointing out that based on the answer, the
common exhibits of the parties, and the answer to the written interrogatories
to the sheriff, no genuine issues of fact exist in the case. The issue is whether
or not the case presented no genuine issues of fact such as to warrant a
summary judgment by the RTC. A summary judgment is apt when the
essential facts of the case are uncontested or the parties do not raise any
genuine issue of fact. Since the parties admitted not only the existence,
authenticity, and genuine execution of these documents but also what they
stated, the trial court did not need to hold a trial for the reception of the
evidence of the parties.

Facts:
Spouses Yu, doing business as Tuanson Trading and Tuanson Builders
Corporation, borrowed various sums totaling P75m from Far East Bank and
Trust Company (FEBTC). For collateral, they executed real estate mortgages
over several of their properties including certain lands located in Legazpi City
owned by Tuanson Trading.

Unable to pay their loans, the Sps Yu and Tuanson Builders requested a
loan restructuring, which the bank, now merged BPI, granted. By this time,
the Sps Yu loan balance stood at P 33.4m The restructured loan used the
same collaterals with the exception of TCT 40247 that secured a loan of P1.6m

Despite the restructuring, however, the Sps Yu still had difficulties

paying their loan. They asked BPI to release some of the mortgaged lands since
their total appraised
 value far exceeded the amount of the remaining debt.
BPI ignored their request. Sps Yu withheld payments on their amortizations.
Thus, BPI extra judicially foreclosed the mortgaged properties in Legazpi City
and in Pili, Camarines Sur.

Sps Yu sought the annulment of the foreclosure sale by court action

against BPI and the winning bidder Magnacraft Development Corporation. In
the course of the proceedings, Sps Yu and Magnacraft entered into a
compromise agreement that affirmed the latter’s ownership of 3 out of the 10
parcels of land auctioned. By virtue of this, the court dismissed the complaint
against Magnacraft, without prejudice to the Yus filing a new one against BPI.

On October 2003, the Sps Yu filed their new complaint before the RTC
against BPI for recovery of alleged excessive penalty charges, attorney’s
fees, foreclosure expenses that the bank caused to be incorporated in the
price of the auctioned properties.

BPI essentially admitted the foreclosure of the mortgaged properties for

P39m corresponded only to Sps Yu debt as of date of filing of the petition. The
notice of the auction sale said that the total was inclusive of interest, penalty
charges, attorney’s fee and expenses of this foreclosure.

BPI further admitted its bid of P45m for all the auctioned properties. BPI
also admitted that Magnacraft submitted the highest and winning bid of
P45.5m. The sheriff turned over this amount to BPI. According to BPI, it in
turn remitted to the Clerk of Court the P400k difference between its bid price
and that
of Magnacrafts. Although the proceeds of the sale exceeded the P39m stated in
the notice of sale by P6m, the bid amount increased because it now included
litigation expenses and attorneys fees as well as interests and penalties
as recomputed.

BPI admitted that it also pushed through with the second auction for the
sale of a lot in Pili, Camarines Sur that secured a remaining debt of P5.5m BPI
made the lone bid of P1.7m

The Yus had three causes of action against BPI.

First. The bank imposed excessive penalty charges and interests: over P5
million in penalty charges computed at 36% per annum compared to the 12%
per annum that the Court fixed in jurisprudence. In addition, BPI collected a
14% yearly interest on the principal, bringing the combined penalty charges
and interest to 50% of the principal per annum.
Second. BPI also imposed a charge of P4m in attorney’s fees, the
equivalent of 10% of the principal, interest, and penalty charges.
Third. BPI did not provide documents to support its claim for foreclosure
expenses of P446k and cost of publication of P518k.
 As an alternative to their three causes of action, the Yus claimed that BPI
was in estoppel to claim more than the amount stated in its published notices.
Consequently, it must turn over the excess bid of P6m

After pre-trial, the Yus moved for summary judgment, pointing out
that based on the answer, the common exhibits of the parties, and the answer
to the written interrogatories to the sheriff, no genuine issues of fact exist in
the case. The Yus waived their claim for moral damages so the RTC can
dispose of the case through a summary judgment

Initially, the RTC granted only a partial summary judgment. It

reduced the penalty charge to 12% per annum until the debt would have been
fully paid but maintained the attorney’s fees since BPI already waived the
amount that formed part of the attorney’s fee and reduced the rate of
attorney’s fee to 10%. The RTC ruled that facts necessary to resolve the
issues on penalties and fees had been admitted by the parties thus
dispensing with the need to receive evidence. BPI appealed to CA which
affirmed RTC’s decision.

Still, the RTC held that it needed to receive evidence for the resolution of
the issues of (1) whether or not the foreclosure and publication expenses were
justified; (2) whether or not the foreclosure of the lot in Pili, Camarines Sur,
was valid given that the proceeds of the foreclosure of the properties in Legazpi
City sufficiently covered the debt; and (3) whether or not BPI was entitled to its
counterclaim for attorneys fees, moral damages, and exemplary damages.

The Yus moved for partial reconsideration. They argued that, since BPI
did not mark in evidence any document in support of the foreclosure expenses
it claimed, it may be assumed that the bank had no evidence to prove such
expenses. The Yus also pointed out that BPI did not dispute the fact that the
proceeds of the sale of the properties in Legazpi City fully satisfied the debt.
Thus, the court could already resolve without trial the issue of whether or not
the foreclosure of the Pili property was valid.

Further, the Yus sought reconsideration of the reduction of penalty

charges and the allowance of the attorneys fees. They claimed that the penalty
charges should be deleted for violation of R.A. 3765 or the Truth in Lending
Act. BPIs disclosure did not state the rate of penalties on late amortizations.
Also, the Yus asked the court to reduce the attorneys fees from 10% to 1% of
the amount due. RTC reconsidered its earlier decision and rendered a
summary judgment:

1. Deleting the penalty charges imposed by BPI for non-compliance with the
Truth in Lending Act;
2. Reducing the attorneys fees to 1% of the principal and interest;
3. Upholding the reasonableness of the foreclosure expenses and cost of
publication, both with interests;
4. Reiterating the turnover by the Clerk of Court to the Yus of the excess in the
bid price;

5. Deleting the Yus claim for moral damages they having waived it;
 6.
Denying the Yus claim for attorneys fees for lack of basis; and
 7. Dismissing
BPIs counterclaim for moral and exemplary damages and forattorneys fees for
lack of merit considering that summary judgment has been rendered in favor
of the Yus.

BPI appealed to the CA. CA affirmed the RTC’s decision. Hence, this petition.

Issue: 1) Whether or not the case presented no genuine issues of fact such
as to warrant a summary judgment by the RTC – Yes (MAIN ISSUE)

2) Where summary judgment is proper, whether or not the RTC and the CA a)
correctly deleted the penalty charges because of BPIs alleged failure to comply
with the Truth in Lending Act; b) correctly reduced the attorneys fees to 1% of
the judgment debt; and c) properly dismissed BPIs counterclaims for moral
and exemplary damages, attorneys fees, and litigation expenses.

Held: A summary judgment is apt when the essential facts of the case are
uncontested or the parties do not raise any genuine issue of fact.

In this case, the Court explained that to resolve the issue of the excessive
charges allegedly incorporated into the auction bid price, the RTC simply had
to look at a) the pleadings of the parties; b) the loan agreements, the
promissory note, and the real estate mortgages between them; c) the
foreclosure and bidding documents; and d) the admissions and other
disclosures between the parties during pre-trial. Since the parties
admitted not only the existence, authenticity, and genuine execution of
these documents but also what they stated, the trial court did not need
to hold a trial for the reception of the evidence of the parties.

BPI contends that a summary judgment was not proper given the
following issues that the parties raised: 1) whether or not the loan agreements
between them were valid and enforceable; 2) whether or not the Yus have a
cause of action against BPI; 3) whether or not the Yus are proper parties in
interest; 4) whether or not the Yus are estopped from questioning the
foreclosure proceeding after entering into a compromise agreement with
Magnacraft; 5) whether or not the penalty charges and fees and expenses of
litigation and publication are excessive; and 6) whether or not BPI violated the
Truth in Lending Act.

But, the Supreme Court held that these are issues that could be
readily resolved based on the facts established by the pleadings and the
admissions of the parties. Indeed, BPI has failed to name any document or
item of fact that it would have wanted to adduce at the trial of the case. A trial
would have been such a great waste of time and resources.

OLIVAREZ REALTY CORPORATION v. BENJAMIN CASTILLO, GR No.

196251, 2014-07-09
Facts:
Benjamin Castillo was the registered owner of a 346,918-square-meter parcel
of land located in Laurel, Batangas, covered by Transfer Certificate of Title No.
T-19972.[4] The Philippine Tourism Authority allegedly claimed ownership of
the same parcel of land... based on Transfer Certificate of Title No. T-18493.[5]
On April 5, 2000, Castillo and Olivarez Realty Corporation, represented by Dr.
Pablo R. Olivarez, entered into a contract of conditional sale[6] over the
property. Under the deed of conditional sale, Castillo agreed to sell his
property to Olivarez Realty
Corporation for P19,080,490.00. Olivarez Realty Corporation agreed to a down
payment of P5,000,000.00,... As to the balance of P14,080,490.00, Olivarez
Realty Corporation agreed to pay in 30 equal monthly installments every
eighth day of the month beginning in the month that the parties would receive
a decision voiding the Philippine Tourism Authority's title to the... property.[8]
Under the deed of conditional sale, Olivarez Realty Corporation shall file the
action against the Philippine Tourism Authority "with the full assistance of
[Castillo]."
Should the action against the Philippine Tourism Authority be denied, Castillo
agreed to reimburse all the amounts paid by Olivarez Realty Corporation.
The parties agreed that Olivarez Realty Corporation may immediately occupy
the property upon signing of the deed of conditional sale. Should the contract
be cancelled, Olivarez Realty Corporation agreed to return the property's
possession to Castillo and forfeit all the... improvements it may have
introduced on the property.
On September 2, 2004, Castillo filed a complaint[14] against Olivarez Realty
Corporation and Dr. Olivarez with the Regional Trial Court of Tanauan City,
Batangas.
Castillo alleged that Dr. Olivarez convinced him into selling his property to
Olivarez Realty Corporation on the representation that the corporation shall be
responsible in clearing the property of the tenants and in paying them
disturbance compensation. He further alleged that
Dr. Olivarez solely prepared the deed of conditional sale and that he was made
to sign the contract with its terms "not adequately explained [to him] in
Tagalog."[15]
After the parties had signed the deed of conditional sale, Olivarez Realty
Corporation immediately took possession of the property. However, the
corporation only paid P2,500,000.00 of the purchase price. Contrary to the
agreement, the corporation did not file any action against... the Philippine
Tourism Authority to void the latter's title to the property. The corporation
neither cleared the land of the tenants nor paid them disturbance
compensation. Despite demand, Olivarez Realty Corporation refused to fully
pay the purchase price.[16]
Arguing that Olivarez Realty Corporation committed substantial breach of the
contract of conditional sale and that the deed of conditional sale was a
contract of adhesion, Castillo prayed for rescission of contract under Article
1191 of the Civil Code of the Philippines.
In their answer,[18] Olivarez Realty Corporation and Dr. Olivarez admitted that
the corporation only paid P2,500,000.00 of the purchase price. In their
defense, defendants alleged that Castillo failed to "fully assist"[19] the...
corporation in filing an action against the Philippine Tourism Authority.
Neither did Castillo clear the property of the tenants within six months from
the signing of the deed of conditional sale. Thus, according to defendants, the
corporation had "all the legal right to... withhold the subsequent payments to
[fully pay] the purchase price."[20]
Castillo replied to the counterclaim,[22] arguing that Olivarez Realty
Corporation and Dr. Olivarez had no right to litigation expenses and attorney's
fees. According to Castillo, the deed of conditional sale clearly states that the
corporation "assume[d]... the responsibility of taking necessary legal
action"[23] against the Philippine Tourism Authority, yet the corporation did
not file any case. Also, the corporation did not pay the tenants disturbance
compensation. For the corporation's failure to fully pay... the purchase price,
Castillo claimed that he had "all the right to pray for the rescission of the
[contract],"[24] and he "should not be held liable . . . for any alleged damages
by way of litigation expenses and attorney's fees."[25]
On March 8, 2006, Castillo filed a motion for summary judgment and/or
judgment on the pleadings.[30] He argued that Olivarez Realty Corporation
and Dr. Olivarez "substantially admitted the material allegations of [his]
complaint,"[31]... specifically:
1. That the corporation failed to fully pay the purchase price for his
property;[32]
2. That the corporation failed to file an action to void the Philippine Tourism
Authority's title to his property;[33] and
3. That the corporation failed to clear the property of the tenants and pay
them disturbance compensation.[34]
Should judgment on the pleadings be improper, Castillo argued that summary
judgment may still be rendered as there is no genuine issue as to any material
fact.
Olivarez Realty Corporation and Dr. Olivarez opposed[39] the motion for
summary judgment and/or judgment on the pleadings, arguing that the
motion was "devoid of merit."[40] They reiterated their claim that the
corporation withheld... further payments of the purchase price because "there
ha[d] been no favorable decision voiding the title of the Philippine Tourism
Authority."[41] They added that Castillo sold the property to another person
and that the sale was allegedly litigated in
Quezon City.[42]
The trial court found that Olivarez Realty Corporation and Dr. Olivarez's
answer "substantially [admitted the material allegations of Castillo's] complaint
and [did] not . . . raise any genuine issue [as to any material fact]."[
According to the trial court, the corporation was responsible for suing the
Philippine Tourism Authority and for paying the tenants disturbance
compensation. Since defendant corporation neither filed any case nor paid the
tenants disturbance compensation, the trial court ruled... that defendant
corporation had no right to withhold payments from Castillo.[... he trial court
ruled that Olivarez Realty Corporation breached the contract of conditional
sale. In its decision[64] dated April 23, 2007, the trial court ordered the deed of
conditional sale rescinded and the P2,500,000.00 forfeited... in favor of Castillo
"as damages under Article 1191 of the Civil Code."[65]... the Court of Appeals
affirmed in toto the trial court's decision. According to the appellate court, the
trial court "did not err in its finding that there is no genuine controversy as to
the facts involved [in... this case]."[69] The trial court, therefore, correctly
rendered summary judgment.[70]
Issues:
Whether the trial court erred in rendering summary judgment;
Ruling:
The trial court correctly rendered... summary judgment, as there were no...
genuine issues of material fact in this... case
Under Rule 35 of the 1997 Rules of Civil Procedure, a trial court may dispense
with trial and proceed to decide a case if from the pleadings, affidavits,
depositions, and other papers on file, there is no genuine... issue as to any
material fact. In such a case, the judgment issued is called a summary
judgment.
An issue of material fact exists if the answer or responsive pleading filed
specifically denies the material allegations of fact set forth in the complaint or
pleading. If the issue of fact "requires the presentation of evidence, it is a
genuine issue of fact."[93] However, if the issue "could be resolved judiciously
by plain resort"[94] to the pleadings, affidavits, depositions, and other papers
on file, the issue of fact raised is sham, and the trial court may resolve the
action through summary... judgment.
A summary judgment is usually distinguished from a judgment on the
pleadings. Under Rule 34 of the 1997 Rules of Civil Procedure, trial may
likewise be dispensed with and a case decided through judgment on the
pleadings if the answer filed fails to tender an issue or otherwise... admits the
material allegations of the claimant's pleading.[95]
Judgment on the pleadings is proper when the answer filed fails to tender any
issue, or otherwise admits the material allegations in the complaint.[96] On
the other hand, in a summary judgment, the answer filed tenders issues as
specific denials and... affirmative defenses are pleaded, but the issues raised
are sham, fictitious, or otherwise not genuine.[97]
In this case, Olivarez Realty Corporation admitted that it did not fully pay the
purchase price as agreed upon in the deed of conditional sale. As to why it
withheld payments from Castillo, it set up the following affirmative defenses:
First, Castillo did not file a case to void... the Philippine Tourism Authority's
title to the property; second, Castillo did not clear the land of the tenants;
third, Castillo allegedly sold the property to a third person, and the
subsequent sale is currently being litigated before a Quezon City court.
Considering that Olivarez Realty Corporation and Dr. Olivarez's answer
tendered an issue, Castillo properly availed himself of a motion for summary
judgment.
However, the issues tendered by Olivarez Realty Corporation and Dr. Olivarez's
answer are not genuine issues of material fact. These are issues that can be
resolved judiciously by plain resort to the pleadings, affidavits, depositions,
and other papers on file; otherwise, these... issues are sham, fictitious, or
patently unsubstantial.
Petitioner corporation refused to fully pay the purchase price because no court
case was filed to void the Philippine Tourism Authority's title on the property.
However, paragraph C of the deed of conditional sale is clear that petitioner
Olivarez Realty Corporation is... responsible for initiating court action against
the Philippine Tourism Authority
Castillo's alleged failure to "fully assist"[99] the corporation in filing the case is
not a defense. As the trial court said, "how can [Castillo] assist [the
corporation] when [the latter] did not file the action [in the first place?]"[100]
Neither can Olivarez Realty Corporation argue that it refused to fully pay the
purchase price due to the Philippine Tourism Authority's adverse claim on the
property. The corporation knew of this adverse claim when it entered into a
contract of conditional sale. It even... obligated itself under paragraph C of the
deed of conditional sale to sue the Philippine Tourism Authority. This defense,
therefore, is sham.
Olivarez Realty Corporation's obligation to pay disturbance compensation is a
pure obligation. The performance of the obligation to pay disturbance
compensation did not depend on any condition. Moreover, the deed of
conditional sale did not give the corporation a period to... perform the
obligation. As such, the obligation to pay disturbance compensation was
demandable at once. Olivarez Realty Corporation should have paid the tenants
disturbance compensation upon execution of the deed of conditional sale.
Olivarez Realty Corporation, therefore, had no right to withhold payments of
the purchase price. As the trial court ruled, Olivarez Realty Corporation "can
only claim non-compliance [of the obligation to clear the land of the tenants in]
October 2000."
The claim that Castillo sold the property to another is fictitious and was made
in bad faith to prevent the trial court from rendering summary judgment.
Petitioners did not elaborate on this defense and insisted on revealing the
identity of the buyer only during... trial.[106] Even in their petition for review
on certiorari, petitioners never disclosed the name of this alleged buyer. Thus,
as the trial court ruled, this defense did not tender a genuine issue of fact,
with the defense "bereft of details."
As demonstrated, there are no genuine issues of material fact in this case.
These are issues that can be resolved judiciously by plain resort to the
pleadings, affidavits, depositions, and other papers on file. As the trial court
found, Olivarez Realty Corporation illegally... withheld payments of the
purchase price. The trial court did not err in rendering summary judgment.
Principles: