Fernando Medical
Enterprises, Inc. vs. Wesleyan University Philippines, Inc.
G.R. No. 207970.
January 20, 2016
BERSAMIN, J.:
Doctrine:
The trial court may
render a judgment on the pleadings upon motion of the claiming party
when the defending party's answer fails to tender an issue, or
otherwise admits the material allegations of the adverse party's
pleading. For that purpose, only the pleadings of the parties in the
action are considered. It is error for the trial court to deny the
motion for judgment on the pleadings because the defending party's
pleading in another case supposedly tendered an issue of fact.
Facts:
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.
Judgment of the RTC
At the hearing, the
court issued an Order denying the Motion for Judgment Based on the
Pleadings considering that the allegations stated on the Motion are
evidentiary in nature. The Court, instead of acting on the same, sets
the case for pre-trial, considering that with the Answer and the
Reply, issues have been joined.
Judgment of the CA
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.
Issue:
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.
WHEREFORE, the
Court REVERSES and SETS ASIDE the decision promulgated
on July 2, 2013; DIRECTS the Regional Trial Court, Branch 1,
in Manila to resume its proceedings in Civil Case No. 09-122116
entitled Fernando Medical Enterprises, Inc. v. Wesleyan
University-Philippines, and to forthwith act on and grant the Motion
for Judgment Based on the Pleadings by rendering the proper judgment
on the pleadings; and ORDERS the respondent to pay the costs
of suit.
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