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FERNANDO MEDICAL ENTERPRISES INC. VS.

WESLEYAN UNIVERSITY
GR No. 207970, Jannuary 20, 2016
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 under the following contracts:
a. Memorandum of Agreement dated January 9, 2006 for the supply old medical
equipment in the total amount of P18,625,000.00;
b. Deed of Undertaking dated July 5, 2006 for the installation of medical gas pipeline
system valued at P8,500,000.00;
c. Deed of Undertaking dated July 27, 2006 for the supply of one unit of Diamond Select
Slice CT and one unit of Diamond Select CV-P costing P65,000,000.00; and
d. Deed of Undertaking dated February 2, 2007 for the supply of furnishings and equipment
worth P32,926,650.00.
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, respectively represented by Rafael P. Fernando and
Guillermo T. Maglaya, Sr., 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 denying paragraph 6,7,8 of the complaint alleging that he lacks “knowledge or information
sufficient to form a belief as to the truth or falsity thereof, inasmuch as the alleged transactions
were undertaken during the term of office of the past officers of defendant Wesleyan University-
Philippines.”
ISSUE: Whether or not the respondent’s denial may be considered “specific denial” within the
purview of the Rules of Civil Procedure.
RULING: NO. Paragraph no. 6 alleged that the respondent's total obligation as of February 15, 2009
was P123,901,650.00, but its balance thereafter became only P54,654,195.54 because it had since
then paid P67,357,683.23 to the petitioner. Paragraph no. 7 stated that the petitioner had agreed
with the respondent on February 11, 2009 to reduce the balance to only P50,400,000.00, which
the respondent would pay in 36 months through 36 postdated checks of P1,400,000.00 each,
which the respondent then issued for the purpose. Paragraph no. 8 averred that after four of the
checks totalling P5,600,000.00 were paid the respondent stopped payment of the rest, rendering
the entire obligation due and demandable pursuant to the February 11, 2009 agreement.
Considering that paragraphs no. 6, 7 and 8 of the complaint averred matters that the respondent
ought to know or could have easily known, the answer did not specifically deny such material
averments. It is settled that denials based on lack of knowledge or information of matters clearly
known to the pleader, or ought to be known to it, or could have easily been known by it are
insufficient and constitute ineffective or sham denials.
That the respondent qualified its admissions and denials by subjecting them to its special
and affirmative defenses of lack of jurisdiction over its person, improper venue, litis pendentia and
forum shopping was of no consequence because the affirmative defenses, by their nature,
involved matters extrinsic to the merits of the petitioner's claim, and thus did not negate the
material averments of the complaint. The essential query in resolving a motion for judgment on
the pleadings is whether or not there are issues of fact generated by the pleadings. Whether issues
of fact exist in a case or not depends on how the defending party's answer has dealt with the
ultimate FACTS alleged in the complaint. The defending party's answer either admits or denies the
allegations of ultimate FACTS in the complaint or other initiatory pleading. The allegations of
ultimate FACTS the answer admit, being undisputed, will not require evidence to establish the
truth of such FACTS, but the allegations of ultimate FACTS the answer properly denies, being
disputed, will require evidence.
The answer admits the material allegations of ultimate FACTS of the adverse party's
pleadings not only when it expressly confesses the truth of such allegations but also when it omits
to deal with them at all. The controversion of the ultimate FACTS must only be by specific denial.
Section 10, Rule 8 of the Rules of Court recognizes only three modes by which the denial in the
answer raises an issue of fact. The first is by the defending party specifying each material allegation
of fact the truth of which he does not admit and, whenever practicable, setting forth the substance
of the matters upon which he relies to support his denial. The second applies to the defending
party who desires to deny only a part of an averment, and the denial is done by the defending
party specifying so much of the material allegation of ultimate FACTS as is true and material and
denying only the remainder. The third is done by the defending party who is without knowledge
or information sufficient to form a belief as to the truth of a material averment made in the
complaint by stating so in the answer. Any material averment in the complaint not so specifically
denied are deemed admitted except an averment of the amount of unliquidated damages.
BENGUET EXPLORATION, INC. vs. COURT OF APPEALS
G.R. No. 117434 | February 9, 2001

FACTS:

On November 29, 1985, Benguet Exploration, Inc. (Benguet) filed a complaint for damages against
Seawood Shipping, Inc. (Seawood Shipping) with the RTC of Makati. On March 4, 1986, Benguet
filed another complaint for damages against respondent Switzerland General Insurance, Co., Ltd.
(Switzerland Insurance).

The two cases were consolidated. 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
Benguet presented its employees, Rogelio Lumibao and Ernesto Cayabyab, as witnesses. While
Switzerland Insurance presented its evidence and 3 witnesses, Eduardo Pantoja, Anastacio Fabian,
and Edgardo Dio.

Based on the evidence presented, the trial court rendered its decision dismissing Benguet’s
complaint as well as Switzerland Insurances third-party complaint against Seawood Shipping.

On appeal, its decision was affirmed by the CA. Benguet moved for reconsideration, but its motion
was denied. Hence this petition.

Benguet contends that the CA gravely erred in ruling that it failed to establish the loss or shortage
of the subject cargo because such loss was sufficiently established by documentary and
testimonial evidence, as well as the admissions of private respondents. It argues that documents
regarding the tonnage of the copper concentrates have been properly identified and that the bill
of lading, the Certificate of Weight, and the Mates Receipt, all of which stated that 2,243.496 wet
metric tons of copper concentrates were loaded on the ship, create a prima facie presumption
that such amount was indeed what was loaded on the vessel. Petitioner asserts that the Draft
Survey Report of OMIC was sufficient evidence to prove that the cargo which arrived in Japan had
a shortage of 355 wet metric tons.
ISSUE: Whether or not the genuineness and due execution of the documents presented, i.e., Bill
of Lading, Certificate of Loading, Certificate of Weight, Mates Receipt, were properly established
by the testimony of its witness, Ernesto Cayabyab, and that as a result, there is a prima facie
presumption that their contents are true.

HELD: No.

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. In another case, we held that 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. It is equally true, however,
that execution can only refer to the actual making and delivery, but it cannot involve other matters
without enlarging its meaning beyond reason. 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
petitioners 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% more or less. On the other hand, Certified Adjusters, Inc., to which
Switzerland Insurance hadyy referred petitioners claim, prepared a report which showed that a
total of 2,451.630 wet metric tons of copper concentrates were delivered at Poro Point. As the
report stated:

It is to be pointed out that there were no actual weighing made at Benguet Exploration, Inc.s site.
The procedure done was that after weighing the trucks before and after unloading at Philex Poro
Point Installation, the weight of the load was determined and entered on Philex Trip Ticket which
was later on copied and entered by the truck driver on Benguet Exploration, Inc.s Transfer Slip.
Considering the discrepancies in the various documents showing the actual amount of copper
concentrates transported to Poro Point and loaded in the vessel, there is no evidence of the exact
amount of copper concentrates shipped. 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 Mates 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 vessel. This fact is compounded
by the admissions made by Lumibao and Cayabyab that they had no personal knowledge of the
actual amount of copper concentrates loaded on the vessel. Correctly did the CA rule:

In the face of these admissions, appellants claim of loss or shortage is placed in serious doubt,
there being no other way of verifying the accuracy of the figures indicated in appellants
documentary evidence that could confirm the alleged loss of 355.736 MT. Notwithstanding the
figure stated in Bill of Lading No. PP/0-1 that 2,243.496 WMT of copper concentrates was loaded
by appellant at the port of origin, it should be stressed that this is merely prima facie evidence of
the receipt by the carrier of said cargo as described in the bill of lading. Thus, it has been held that
recitals in the bill of lading as to the goods shipped raise only a rebuttable presumption that such
goods were delivered for shipment and as between the consignor and a receiving carrier, the fact
must outweigh the recital (Saludo vs. Court of Appeals, 207 SCRA 498, 509 [1992]). Resultingly,
the admissions elicited from appellants witnesses that they could not confirm the accuracy of the
figures indicated in their documentary evidence with regard to the actual weight of the cargo
loaded at the port of origin and that unloaded at the port of destination, in effect rebuts the
presumption in favor of the figure indicated in the bill of lading.