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Fernando Medical Enterprises, Inc. vs.

Wesleyan University of the respondent in its complaint for rescission in the RTC in
Philippines, Inc. Cabanatuan City.
G.R. No. 207970. January 20, 2016
Issue:
Whether the denial of judgment of the pleadings is proper
Doctrine:
The trial court may render a judgment on the pleadings upon
motion of the claiming party when the defending party's answer Ruling of the SC:
fails to tender an issue, or otherwise admits the material No. 1. The manner of denial was not effective as a specific denial
allegations of the adverse party's pleading. For that purpose, and did not negate the material averments of the complaint.
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 a. The answer admits the material allegations of ultimate facts
the pleadings because the defending party's pleading in another of the adverse party's pleadings not only when it expressly
case supposedly tendered an issue of fact. confesses the truth of such allegations but also when it omits to
deal with them at all. The controversion of the ultimate facts
Facts: must only be by specific denial. Section 10, Rule 8 of the Rules of
From January 9, 2006 until February 2, 2007, Fernando Medical Court recognizes only three modes by which the denial in the
Ent. (FEM), delivered and installed medical equipment and answer raises an issue of fact.
supplies at the Wesleyan’s hospital. According to the FEM, the
respondent paid only P67,3 57,683.23 of its total obligation of A. The first is by the defending party specifying each material
P123,901,650.00, leaving unpaid the sum of P54,654,195.54. allegation of fact the truth of which he does not admit and,
However, on February 11, 2009, the petitioner and the whenever practicable, setting forth the substance of the matters
respondent represented by Maglaya, entered into an agreement upon which he relies to support his denial.
whereby the former agreed to reduce its claim to only
P50,400,000.00, and allowed the latter to pay the adjusted B. The second applies to the defending party who desires to deny
obligation on installment basis within 36 months. In the letter only a part of an averment, and the denial is done by the
dated May 27, 2009, the respondent notified the petitioner that defending party specifying so much of the material allegation of
its new administration had reviewed their contracts and had ultimate facts as is true and material and denying only the
found the contracts defective and rescissible due to economic remainder.
prejudice or lesion; and that it was consequently declining to
recognize the February 11, 2009 agreement because of the lack C. The third is done by the defending party who is without
of approval by its Board of Trustees and for having been signed knowledge or information sufficient to form a belief as to the
by Maglaya whose term of office had expired. On June 24, 2009, truth of a material averment made in the complaint by stating so
the petitioner sent a demand letter to the respondent. Due to in the answer. Any material averment in the complaint not so
the respondent's failure to pay as demanded, the petitioner filed specifically denied are deemed admitted except an averment of
its complaint for sum of money in the RTC.
the amount of unliquidated damages.
The respondent moved to dismiss the complaint upon the The paragraphs denied alleges the following: 1) Wesleyan
following grounds, namely: (a) lack of jurisdiction over the University’s total obligation, 2) agreement to reduce the balance
person of the defendant; (b) improper venue; (c) litis pendentia; at a lower amount payable in 36 postdated checks, 3) when
and (d) forum shopping. In support of the ground of litis
Wesleyan University stopped payment rendering the obligation
pendentia, it stated that it had earlier filed a complaint for the
due and demandable. The matters averred are matters that the
rescission of the four contracts and of the February 11, 2009
Wesleyan University ought to know or could have easily known,
agreement in the RTC in Cabanatuan City; and that the resolution
of that case would be determinative of the petitioner's action for the answer did not specifically deny such material averments. It
collection. is settled that denials based on lack of knowledge or information
of matters clearly known to the pleader, or ought to be known
After the RTC denied the motion to dismiss, FEM then filed its to it, or could have easily been known by it are insufficient, and
Motion for Judgment Based on the Pleadings, stating that the constitute ineffective or sham denials. The affirmative defenses,
respondent had admitted the material allegations of its by their nature, involved matters extrinsic to the merits of the
complaint and thus did not tender any issue as to such FERNANDO MEDICAL ENTERPRISES's claim, and thus did not
allegations. The respondent opposed the Motion for Judgment negate the material averments of the complaint.
Based on the Pleadings, arguing that it had specifically denied
the material allegations in the complaint. 2. The Wesleyan University has already admitted the averments
of non-payment as well as the Feb 11, 2009 agreement.
RTC denyied the Motion for Judgment Based on the Pleadings
considering that the allegations stated on the Motion are The Feb 11, 2009 agreement pleaded by the FERNANDO
evidentiary in nature. CA ruled that a judgment on the pleadings MEDICAL ENTERPRISES is an actionable document. In the case of
would be improper because the outstanding balance due to the a written instrument or document upon which an action or
petitioner remained to be an issue in the face of the allegations defense is based, which is also known as the actionable
document. The adverse party is deemed to admit the maturing on February 5, 2000. As additional security, Go
genuineness and due execution of the actionable document executed a Comprehensive Surety Agreement (CSA) covering
unless he specifically denies them under oath, and sets forth any and all obligations undertaken by Go Tong Electrical,
what he claims to be the facts, but the requirement of an oath including the aforesaid loan. Upon default of petitioners, DBS -
does not apply when the adverse party does not appear to be a and later, its successor-in-interest, herein respondent -
party to the instrument or when compliance with an order for an demanded payment from petitioners, but to no avail, hence, the
aforesaid complaint. Petitioners in their answer with
inspection of the original instrument is refused. In this case he
counterclaim merely stated that they “specifically deny” the
has already admitted the due execution of the said document
allegations in the complaint. RTC ruled in favor of Respondents.
and its liabilities. CA affirmed.
3. The Court of Appeals erred in ruling that judgment on the
Issue: whether the genuineness and due execution of the loan in
pleading is improper by going outside of the Wesleyan
document in this case were deemed admitted
University's answer, relying on the allegations contained in the
latter's complaint for rescission holding that the factual issue on Ruling: Yes. Section 8, Rule 8 of the Rules which provides:
liability remains to be settled.
SEC. 8. How to contest such documents. — When an action or
Under Section 1, Rule 34 of the Rules of Court, the answer was
defense is founded upon a written instrument, copied in or
the sole basis for ascertaining whether the complaint's material
attached to the corresponding pleading as provided in the
allegations were admitted or properly denied. As such, the
preceding Section, the genuineness and due execution of the
Wesleyan University's averment of payment to the FERNANDO
instrument shall be deemed admitted unless the adverse party,
MEDICAL ENTERPRISES made in its complaint for rescission had
under oath, specifically denies them, and sets forth what he
no relevance to the resolution of the Motion for Judgment Based
claims to be the facts; but the requirement of an oath does not
on the Pleadings. The CA thus wrongly held that a factual issue
apply when the adverse party does not appear to be a party to
on the total liability of the Wesleyan University remained to be
the instrument or when compliance with an order for an
settled through trial on the merits. It should have openly
inspection of the original instrument is refused
wondered why the Wesleyan University's answer in Civil Case
A reading of the Answer shows that petitioners failed to
No. 09-
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
WHEREFORE, the Court REVERSES and SETS ASIDE the decision
"specifically deny" the pertinent allegations of the Complaint
promulgated on July 2, 2013; DIRECTS the Regional Trial Court,
"for being self-serving and pure conclusions intended to suit
Branch 1, in Manila to resume its proceedings in Civil Case No.
plaintiffs purposes," does not constitute an effective specific
09-122116 entitled Fernando Medical Enterprises, Inc. v.
denial as contemplated by law. Verily, a denial is not specific
Wesleyan University-Philippines, and to forthwith act on and
simply because it is so qualified by the defendant. Stated
grant the Motion for Judgment Based on the Pleadings by
otherwise, a general denial does not become specific by the use
rendering the proper judgment on the pleadings;
of the word "specifically." Neither does it become so by the
and ORDERS the respondent to pay the costs of suit.
simple expedient of coupling the same with a broad conclusion
of law that the allegations contested are "self-serving" or are
G.R. No. 187487, June 29, 2015
intended "to suit plaintiffs purposes."
GO TONG ELECTRICAL SUPPLY CO., INC. AND GEORGE C.
GO, Petitioners, v. BPI FAMILY SAVINGS BANK, INC.,
The Court expounded on how to deny the genuineness and due
SUBSTITUTED BY PHILIPPINE INVESTMENT ONE [SPV-AMC],
execution of an actionable document: defendant must declare
INC.,
under oath that he did not sign the document or that it is
otherwise false or fabricated. Neither does the statement of the
Topic: Sec. 8 Rule 8 Rules of Court: How to Contest such
answer to the effect that the instrument was procured by
documents
fraudulent representation raise any issue as to its genuineness
or due execution. On the contrary such a plea is an admission
Facts: Respondent filed a complaint against petitioners Go Tong
both of the genuineness and due execution thereof, since it
Electrical Supply Co., Inc. (Go Tong Electrical) and its President,
seeks to avoid the instrument upon a ground not affecting
George C. Go (Go; collectively petitioners) for the payment of
either.
their loan obligation. Respondent alleged that on 1996, Go Tong
Electrical applied for and was granted financial assistance by
To add, Section 8, Rule 8 of the Rules further requires that the
Bank of Southeast Asia (BSA) which later was succeeded by DBS
defendant "sets forth what he claims to be the facts," which
Bank of the Phil. Application for financial assistance was
requirement, likewise, remains absent from the Answer in this
renewed through credit agreement on January 6, 1999. On even
case.
date, Go Tong Electrical, represented by Go, among others,
obtained a loan from DBS in the principal amount of
Thus, with said pleading failing to comply with the "specific
P40,491,051.65, for which Go Tong Electrical executed
denial under oath" requirement under Section 8, Rule 8 of the
Promissory Note No. for the same amount in favor of DBS,
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.

WHEREFORE, the petition is DENIED. The Decision dated


February 17, 2009 and the Resolution dated April 13, 2009 of the
Court of Appeals in CA-G.R. CV No. 86749 are
hereby AFFIRMED with the above-stated MODIFICATIONS