You are on page 1of 8

Fernando Medical Enterprises, Inc. vs Wesleyan University Philippines, Inc.

G,R. No. 207970. January 20,2016

Bersamin, J.:

From January 9, 2006 until February 2, 2007, the petitioner, a domestic corporation dealing with medical
equipment and supplies, delivered to and installed medical equipment and supplies at the respondent's
hospital. According to the petitioner, the respondent paid only P67,3 57,683.23 of its total obligation of
P123,901,650.00, leaving unpaid the sum of P54,654,195.54.

However, on February 11, 2009, the petitioner and the respondent entered into an agreement whereby the
former agreed to reduce its claim to only P50,400,000.00, and allowed the latter to pay the adjusted
obligation on installment basis within 36 months.

In the letter dated May 27, 2009, the respondent notified the petitioner that its new administration had
reviewed their contracts and had found the contracts defective and rescissible due to economic prejudice
or lesion; and that it was consequently declining to recognize the February 11, 2009 agreement because of
the lack of approval by its Board of Trustees and for having been signed by Maglaya whose term of office
had expired.

On June 24, 2009, the petitioner sent a demand letter to the respondent. Due to the respondent's failure to
pay as demanded, the petitioner filed its complaint for sum of money in the RTC.

The respondent moved to dismiss the complaint upon the following grounds, namely: (a) lack of
jurisdiction over the person of the defendant; (b) improper venue; (c) litis pendentia; and (d) forum
shopping. In support of the ground of litis pendentia, it stated that it had earlier filed a complaint for the
rescission of the four contracts and of the February 11, 2009 agreement in the RTC in Cabanatuan City;
and that the resolution of that case would be determinative of the petitioner's action for collection.

After the RTC denied the motion to dismiss on July 19, 2009, the respondent filed its answer. On
September 28, 2011, the petitioner filed its Motion for Judgment Based on the Pleadings, stating that the
respondent had admitted the material allegations of its complaint and thus did not tender any issue as to
such allegations. The respondent opposed the Motion for Judgment Based on the Pleadings, arguing that
it had specifically denied the material allegations in the complaint.

On July 2, 2013, the CA promulgated its decision. Although observing that the respondent had admitted
the contracts as well as the February 11, 2009 agreement, the CA ruled that a judgment on the pleadings
would be improper because the outstanding balance due to the petitioner remained to be an issue in the
face of the allegations of the respondent in its complaint for rescission in the RTC in Cabanatuan City.

Whether the Court of Appeals erred in going outside of the respondent's answer by relying on the
allegations contained in the latter's complaint for rescission.

Ruling of the SC:

Yes, the Court of Appeals erred in going outside of the respondent's answer by relying on the allegations
contained in the latter's complaint for rescission. In order to resolve the petitioner's Motion for Judgment
Based on the Pleadings, the trial court could rely only on the answer of the respondent filed in Civil Case
No. 09-122116. Under Section 1, Rule 34 of the Rules of Court, the answer was the sole basis for
ascertaining whether the complaint's material allegations were admitted or properly denied. As such, the
respondent's averment of payment of the total of P78,401,650.00 to the petitioner made in its complaint
for rescission had no relevance to the resolution of the Motion for Judgment Based on the Pleadings. The
CA thus wrongly held that a factual issue on the total liability of the respondent remained to be settled
through trial on the merits. It should have openly wondered why the respondent's answer in Civil Case
No. 09-122116 did not allege the supposed payment of the P78,401,650.00, if the payment was true, if
only to buttress the specific denial of its alleged liability. The omission exposed the respondent's denial of
liability as insincere.
Go Tong Electrical Supply Co., Inc. and George C. Go v. BPI Family Savings Bank, Inc. Substituted by
Philippine Investment One, Inc.
G.R. No. 187 487. June 29, 2015.

Perlas-Bernabe, J.:

Respondent filed a complaint against petitioners Go Tong Electrical Supply Co., Inc. and its President,
George C. Go, seeking that the latter be held jointly and severally liable to it for the payment of their loan
obligation in the aggregate amount of P87,086,398.71, inclusive of the principal sum, interests and
penalties as of May 28, 2002, as well as attorney’s fees, litigation expenses and costs of suit.

Respondent alleges that as early as 1996, when petitioners had applied and was granted financial
assistance by the then Bank of South East Asia. Subsequently, DBS Bank of the Philippines, who became
the successor in interest of BSA. The application for financial assistance was renewed on January 6, 1999
through a credit agreement, and on even date, petitioner, represented by go among others obtained a loan
from DBS in the amount of P40,491,051.65 for which petitioner executed a promissory note for the same
amount in favor of DBS. As an additional security, go executed a Comprehensive Surety Agreement
(CSA) covering any and all obligations undertaken by Go Tong Electrical including aforesaid loan. Upon
default of petitioners, DBS – and later, its successor-in-interest, herein respondent – demanded payment
from petitioners but to no avail, hence the aforesaid complaint.

In their answer with counterclaim, petitioners merely stated that they “specifically deny” the allegations
under the complaint. Of particular note is their denial of the execution of the loan agreement, the PN, and
the CSA “for being self-serving and pure conclusions intended to suit [respondent’s] purposes”. By way
of special and affirmative defenses, petitioners argued, among others, that: (a) the real party-in-interest
should be DBS and not respondent; (b) no demand was made upon them; and (c) Go cannot be held liable
under the CSA since there was supposedly no solidarity of debtors. Petitioners further interposed
counterclaims for the payment of moral and exemplary damages, as well as litigation and attorney's fees
in the total amount of ₱1,250,000.00.

RTC ruled in favor of the respondent, thereby ordering petitioners to jointly and severally pay the former.
Unconvinced, the petitioners appealed to the CA, to which the CA rendered a decision sustaining the
RTC’s ruling in toto.

Whether or not the CA erred in upholding the RTC’s ruling

No. The Supreme Court concurs with the CA decision holding that the genuineness and due execution of
the loan documents in this case were deemed admitted by petitioners under the parameters of Section 8,
Rule 8 of the rules of Court.

A reading of the Answer shows that petitioners failed to specifically deny the execution of the Credit
Agreement, PN, and CSA under the auspices of the above-quoted rule. The mere statement in paragraph 4
of their Answer, i.e., that they "specifically deny" the pertinent allegations of the Complaint "for being
self-serving and pure conclusions intended to suit plaintiff’s purposes,” does not constitute an effective
specific denial as contemplated by law. Verily, a denial is not specific simply because it is so qualified by
the defendant. Stated otherwise, a general denial does not become specific by the use of the word
"specifically." Neither does it become so by the simple expedient of coupling the same with a broad
conclusion of law that the allegations contested are "self-serving" or are intended "to suit plaintiff’s

Citing the earlier case of Songco v. Sellner, the Court expounded on how to deny the genuineness and due
execution of an actionable document, viz:

The defendant must declare under oath that he did not sign the document or that it is otherwise false or
fabricated. Neither does the statement of the answer to the effect that the instrument was procured by
fraudulent representation raise any issue as to its genuineness or due execution. On the contrary such a
plea is an- admission both of the genuineness and due execution thereof, since it seeks to avoid the
instrument upon a ground not affecting either.

Thus, with said pleading failing to comply with the "specific denial under oath" requirement under
Section 8, Rule 8 of the Rules, the proper conclusion, as arrived at by the CA, is that petitioners had
impliedly admitted the due execution and genuineness of the documents evidencing their loan obligation
to respondent.
BENGUET EXPLORATION, INC vs. Court of Appeals, Switzerland General Insurance Co., LTD., and
Seawood Shipping Inc.
G.R. No. 117434 February 9, 2001

Petitioner Benguet Exploration, Inc. (Benguet) filed a complaint for damages against SeawoodShipping
and Switzerland General Insurance, Co., Ltd.

Switzerland Insurance filed a third-party complaint against Seawood Shipping, praying that the latter be
ordered to indemnify it for whatever might be adjudged against it in favor of petitioner.Thereafter, the
cases were jointly tried, during which petitioner Benguet presented its employees, Rogelio Lumibao and
Ernesto Cayabyab, as witnesses.

Rogelio Lumibao, marketing assistant of Benguet, was in charge of exportation. His responsibilities
included the documentation of export products, presentations with banks, and other duties connected with
the export of products. He explained that private respondent Seawood Shipping was chartered by
petitioner Benguet to transport copper concentrates. The bill of lading stated that the cargo, consisting of
2,243.496 wet metric tons of copper concentrates, was loaded on board Sangkulirang No. 3 at Poro Point,
San Fernando, La Union. It was insured by Switzerland Insurance (marine insurance policy was marked.
When the cargo was unloaded in Japan, however, Rogelio Lumibao received a report dated August 19,
1985, from a surveyor in Japan stating that the cargo was 355 metric tons short of the amount stated in the
bill of lading. For this reason, petitioner Benguet made a claim of the loss to Seawood Shipping and
Switzerland Insurance. In its letter, dated August 21, 1985, petitioner Benguet made a formal demand for
the value of the alleged shortage. As both Seawood Shipping and Switzerland Insurance refused the
demand, petitioner Benguet brought these cases against Seawood Shipping and Switzerland Insurance.

Ernesto Cayabyab had been with Benguet for 13 years and, at the time of his testimony, he was secretary
of Nil Alejandre, manager of Benguet. According to Cayabyab, he was sent to the warehouseat La Union
to assist in the loading of the copper concentrates. These copper concentrates were to be loaded on the
ship Sangkulirang No. 3. Cayabyab said he was present when the cargo was loaded on the ship, as
evidenced by the Certificate of Loading, Certificate of Weight, and the Mate's Receipt all dated July 28,
1985. According to Cayabyab, the Marine Surveyor and the Chief Mate would go around the boat to
determine how much was loaded on the ship. Cayabyab stated that he saw petitioner Benguet's
representative and his immediate superior, Mr. Alejandre, and the Inspector of Customs, Mr. Cardenas,
sign the Certificate of Weight. Cayabyab also witnessed the ship captain sign the Certificate of Weight,
which stated therein that 2,243.496 wet metric tons of copper concentrates were loaded on the ship.
Cayabyab likewise confirmed the authenticity of the Mate's Receipt, saying that he witnessed the Chief
Mate sign the document.

Whether the genuineness and due execution of the documents presented were properly established
by the testimony of the plaintiff’s witness, resulting to prima facie presumption that their contents are

The admission of the due execution and genuineness of a document simply means that "the party
whose signature it bears admits that he signed it or that it was signed by another for him with his
authority; that at the time it was signed it was in words and figures exactly as set out in the pleading of the
party relying upon it; that the document was delivered; and that any formal requisites required by law,
such as a seal, an acknowledgment, or revenue stamp, which it lacks, are waived by him. When the law
makes use of the phrase 'genuineness and due execution of the instrument' it means nothing more than
that the instrument is not spurious, counterfeit, or of different import on its face from the one executed.
The only object of the rule was to enable a plaintiff to make out a prima facie, not a conclusive
case, and it cannot preclude a defendant from introducing any defense on the merits which does not
contradict the execution of the instrument introduced in evidence
In this case, respondents presented evidence which casts doubt on the veracity of these documents.
Respondent Switzerland Insurance presented Export Declaration No. 1131/85 which petitioner's own
witness, Rogelio Lumibao, prepared, in which it was stated that the copper concentrates to be transported
to Japan had a gross weight of only 2,050 wet metric tons or 1,845 dry metric tons, 10 percent more or
less. On the other hand, Certified Adjusters, Inc., to which Switzerland Insurance had referred petitioner's
claim, prepared a report which showed that a total of 2,451.630 wet metric tons of copper concentrates
were delivered at Poro Point.
Thus, whatever presumption of regularity in the transactions might have risen from the
genuineness and due execution of the Bill of Lading, Certificate of Weight, Certificate of Loading, and
Mate's Receipt was successfully rebutted by the evidence presented by respondent Switzerland Insurance
which showed disparities in the actual weight of the cargo transported to Poro Point and loaded on the
and Monark Equipment Corporation
G.R. No. 160242. May 17, 2005

Callejo, Sr., J.:

Monarch Equipment Corporation (MEC) filed a complaint for a sum of money with damages against the
Asian Construction and Development Corporation (ACDC) with the Regional Trial Court of Quezon
City. The complaint was for the payment of the equipment leased by it and purchases for various
equipment, which despite demands, ACDC failed to pay.

ACDC filed a motion to file and admit answer with third-party complaint against Becthel Overseas
Corporation (Becthel). ACDC admitted its indebtedness to MEC but alleged that their non-payment was
due to Becthel’s failure and refusal to pay its obligation with ACDC for the leased equipment which was
used for his construction project. ACDC alleged that Bechtel contracted the services of Asiakontrukt for
the construction work at its project using the leased equipment, that although Asiakontrukt complied with
its work, Becthel did not pay for its services, hence alleging that Bechtel needs to be impleaded in this
case for contribution, indemnity, subrogation or other reliefs to offset or pay the amount of money claim
of Monark on the leased equipments.

MEC opposes motion to file a third party complaint on the ground that ACDC already admitted its
principal obligation to MEC and that these transactions were independent and the allowance of the
complaint would only delay the proceedings.

MEC then filed for a motion for summary judgment on the ground the there was no genuine issue as to
the obligation of ACDC to MEC to which, ACDC filed an opposition for the motion for summary
judgment alleging therein that there is a genuine issue on the amount claimed and that it had a third-party
complaint against Bechtel in connection with the reliefs sought against it which had to be litigated.

RTC rendered a judgment in favor of MEC, ordering ACDC to pay the amount of 5,0171,335.86 plus
12% interest from the filing of the complaint until fully paid. On appeal, CA affirmed the decision
rendered by the appellate court also ruling that since MEC had prayed for judgment on the pleadings, it
essentially waived its claim for damages other than 5,071,335.86.

Whether or not Third party complaint is proper.

No. The bringing of a third party defendant is proper if he would be liable to the plaintiff or to the
defendant or both for all or part of the plaintiff’s claim against the original defendant, although the third
party defendant’s liability arises out of another transaction. There must be a causal connection between
the claim of the plaintiff in his complaint and a claim for contribution, indemnity, or other relief of the
defendant against the third party defendant.

In the case at bar, the claims of the MEC against the ACDC arose out of the contracts of lease and sale;
such transactions are different and separate from those between Becthel and the ACDC as third party
plaintiff for the construction of the latter’s project. Controversy is entirely distinct from each other.
Hence, there being no causal connection between MEC’s claim for rental and balance of purchase price
for equipment and the failure of Bechtel to pay balance to ACDC after completion of its project, the third
party complaint filed shall not be allowed.