CIVIL PROCEDURE CASES – Judgement and Final Orders (Rule 36)
G.R. No. L-17721 October 16, 1961
GREGORIO APELARIO, doing business under the style "GREGORIO
TRADING," plaintiff-appelleee, vs. INES CHAVEZ & COMPANY, LTD., doing business
under the style "FIDELITY MOTOR SUPPLY COMPANY, LTD., and INES
CHAVEZ, defendants-appellants.
Appeal from a judgment on the pleadings rendered by the Court of First Instance of Manila
on June 8, 1959 in its Case No. 39822, and certified by the Court of Appeals to this Court on
the ground that only questions of law are involved.
The record shows that on April 8, 1959, plaintiff Gregorio Apelario filed a complaint against
Ines Chavez & Company, Ltd., a limited partnership, and its general partner, Ines Chavez.
It was therein averred, in substance, that on or about October 28, 1958, the defendant
partnership had purchased on credit from plaintiff ten sets of axle assemblies for the sum
of P2,400.00 (par. 3); that on December 6, 1958, defendant delivered in payment to the
plaintiff two postdated cash checks for P1,200.00 each, drawn against the Philippine Bank
of Commerce (par. 4); that when the checks were presented for payment, they were
dishonored for lack of funds, whereupon the defendant took back the checks and replaced
them with two other checks, also postdated, for the same amount as before (par. 5); that
these checks were also dishonored (par. 6); that the plaintiff, on February 23, 1959,
demanded payment in cash, but defendant refused to pay (par. 7); that because of such
malicious and wilfull refusal, plaintiff had to engage the services of counsel for an agreed
fee of P750.00 (par. 8); that defendant was about to remove and dispose of its properties
with intent to defraud the plaintiff, wherefore a writ of attachment became necessary (par.
9); and prayer was made for judgment in favor of plaintiff and against the defendant for the
sum of P2,400.00, with legal interest from the filing of the complaint, and for P750.00
attorney's fees, with expenses and costs. Plaintiff also moved and duly obtained a writ of
attachment.
Defendants obtained the lifting of the attachment by filing a counterbond on April 14, 1959;
and on May 7, 1959, they filed an answer admitting the allegations of paragraphs 1 and 6
of the complaint, admitting that plaintiff had demanded payment of P2,400, but pleaded
that —
defendants could not pay the plaintiff, because they have so many accounts
receivable which have not yet been paid to them, of which fact the defendant was
duly informed by the plaintiff and thereby requested to wait a while. (R. App. p. 27)
Defendants further averred having no knowledge or information of the allegations of
paragraph 8 of the complaint concerning the attorneys' fees; denied having performed any
act of removal or disposal of its property, branding plaintiff's allegations in paragraph 9 to
be false and malicious; and prayed for dismissal of the complaint.
Upon motion of the plaintiff, and over the objection of defendants, the trial court rendered
judgment on the pleadings, sentencing defendants to pay P2,400, plus legal interest from
the filing of the complaint; and P500 attorney's fees.
Defendants appealed, and now claim that it was error for the lower court to have rendered
judgment on the pleadings, because the answer raised material issues.
We find no merit in the appeal. As pointed out in the judgment complained of the
defendants-appellants had admitted all the material allegations of the complaint
concerning the existence of the debt and its non-payment. The pleaded excuse, that they
had requested plaintiff to wait because appellants' many accounts receivable had not yet
been collected, is clearly no defense, for a debtor can not delay payment due just to suit
its convenience, and the creditor is not an underwriter of his debtor's business unless so
stipulated.
The denial of the averment concerning the stipulated fees of plaintiff's attorney tendered
no genuine issue, for even without such allegations, it was discretionary in the court to
allow reasonable attorneys' fees by way of damages, if it found just and equitable to allow
their recovery (Civ. Code, Art. 2208). In this case, allowance of such fees was justified
since defendant admitted having issued to the creditor checks without funds, not once but
twice. It is well to note the P750 attorney's fees claimed by plaintiff were reduced to P500
only.
Nor does the denial of the complaint's averments concerning the fraudulent removal and
disposition of defendant's property constitute a bar to a judgment on the pleadings, since
the defendant neither claimed nor asked for any damages on account of the issuance and
levy of the writ of attachment.
WHEREFORE, the appealed judgment of the Court of First Instance is affirmed. Costs
against appellants.
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G.R. No. L-28140 March 19, 1970
CAPITOL MOTORS CORPORATIONS, plaintiff-appellee, vs. NEMESIO I.
YABUT, defendant-appellant.
Appeal on a question of law from the judgment of the Court of First Instance of Rizal in its
Civil Case. No. Q-9869.
On March 1, 1966, Capitol Motors Corporations filed a complaint against Nemesio I. Yabut.
It was therein averred that on April 24, 1965, the defendant executed in favor of the plaintiff
a promissory note (copy of which was attached to the complaint) for the sum of
P30,134.25, payable in eighteen (18) equal monthly installments with interest at 12% per
annum, the first installment to become due on June 10, 1965, that it was stipulated in the
promissory note that should the defendant fail to pay two (2) successive installments, the
principal sum remaining unpaid would immediately become due and demandable and the
defendant would, by way of attorney's fees and costs of collection, be obligated to the
plaintiff for an additional sum equivalent to 25% of the principal and interest due; that as
of February 23, 1966, the sum remaining unpaid on the promissory note was P30,754.79,
including accrued interest; that the defendant defaulted in the payment of two (2)
successive installments, and likewise failed to pay the interest due on the promissory note;
and that in spite of demands by the plaintiff, the defendant failed and refused to pay the
said principal sum and interest due. Prayer was made that the defendant be ordered to
pay the plaintiff the sum of P30,754.79, as well as the interest due thereon from February
23, 1966, and an additional sum equivalent to 25% of the amount due, plus costs.
On April 27, 1966, and within the reglementary period, the defendant, through his counsel,
filed an answer which reads:
DEFENDANT through counsel alleges:
1. Paragraph 1 of the complaint is admitted.
2. Paragraphs 2, 3, 4, 5, 6 and 7 of the complaint are specifically denied for lack
of knowledge sufficient to form a belief as to the truth thereof.
WHEREFORE, it is respectfully prayed that the Complaint be dismissed with costs
against the plaintiff.
On June 16, 1966, the plaintiff filed a motion for judgment on the pleadings, on the ground
that the defendant, not having set forth in his answer the substance of the matters relied
upon by him to support his denial, had failed to deny specifically the material allegations
of the complaint, hence, must be deemed to have admitted them. The defendant did not
file an opposition to the motion. On September 13, 1966, after hearing on the motion, the
CIVIL PROCEDURE CASES – Judgement and Final Orders (Rule 36)
court issued an order granting the said motion and considering the case submitted for
decision on the basis of the pleadings; and on January 9, 1967, the court rendered
judgment granting in toto the plaintiff's prayer in its complaint.
In this appeal, defendant-appellant contends that the court a quo erred in considering him
as having failed to deny specifically the material allegations of the complaint, and,
consequently, in deciding the case on the basis of the pleadings. Citing Moran, Comments
on the Rules of Court, Vol. I, 1963 Ed., p. 281, he argues that since Section 10, Rule 8 of
the Revised Rules of Court, recognizes three (3) modes of specific denial, namely: (1) by
specifying each material allegation of fact in the complaint the truth of which the defendant
does not admit, and, whenever practicable, setting forth the substance of the matters which
he will rely upon to support his denial or (2) by specifying so much of an averment in the
complaint as is true and material and denying only the remainder or (3) by stating that the
defendant is without knowledge or information sufficient to form a belief as to the truth of
a material averment in the complaint, which has the effect of a denial, and he has adopted
the third mode of specific denial, his answer tendered an issue, and, consequently the
court a quo could not render a valid judgment on the pleadings.
This appeal is without merit.
We agree with defendant-appellant that one of the modes of specific denial contemplated
in Section 10, Rule 8, is a denial by stating that the defendant is without knowledge or
information sufficient to form a belief as to the truth of a material averment in the complaint.
The question, however, is whether paragraph 2 of defendant-appellant's answer
constitutes a specific denial under the said rule. We do not think so. In Warner Barnes &
Co., Ltd. vs. Reyes, et al., G.R. No. L-9531, May 14, 1958 (103 Phil., 662), this Court said
that the rule authorizing an answer to the effect that the defendant has no knowledge or
information sufficient to form a belief as to the truth of an averment and giving such answer
the effect of a denial, does not apply where the fact as to which want of knowledge is
asserted, is so plainly and necessarily within the defendant's knowledge that his averment
of ignorance must be palpably untrue. In said case the suit was one for foreclosure of
mortgage, and a copy of the deed of mortgage was attached to the complaint; thus,
according to this Court, it would have been easy for the defendants to specifically allege
in their answer whether or not they had executed the alleged mortgage. The same thing
can be said in the present case, where a copy of the promissory note sued upon was
attached to the complaint. The doctrine in Warner Barnes & Co., Ltd. was reiterated in J.
P. Juan & Sons, Inc. vs. Lianga Industries, Inc., G.R. No. L-25137, July 28, 1969 (28 SCRA
807). And in Sy-quia vs. Marsman, G.R. No. L-23426, March 1, 1968 (22 SCRA 927), this
Court said:
With regard to the plea of lack of knowledge or information set up in paragraph 3
of the answer, this Court's decision in Warner Barnes vs. Reyes, 103 Phil. 662,
665, is authority for the proposition that this form of denial must be availed of with
2

sincerity and good faith, not for the purpose of confusing the other party, nor for
purposes of delay. Yet, so lacking in sincerity and good faith is this part of the
answer that defendants-appellants go to the limit of denying knowledge or
information as to whether they (defendants) were in the premises (Marsman Bldg.)
on January 4, 1961, as averred in paragraph 4 of the complaint. Yet whether such
a fact was or was not true could not be unknown to these defendants.
In National Marketing Corporation vs. De Castro, 106 Phil. 803 (1959), this Court held:
Furthermore, in his answer to the appellee's complaint, he merely alleged that 'he
has no knowledge or information sufficient to form a belief as to the truth of the
matters contained in paragraphs 3, 4, 5 and 6 so much so that he denies
specifically said allegations.' A denial is not specific simply because it is so
qualified. (Sections 6 and 7, Rule 9; El Hogar Filipino vs. Santos Investments, Inc.,
74 Phil. 79; Baetamo vs. Amador, 74 Phil. 735; Dacanay vs. Lucero, 76 Phil. 139;
Lagrimas vs. Lagrimas, 95 Phil. 113). Material averments in a complaint, other
than those as to the amount of damage, are deemed admitted when not specifically
denied. (Section 8, Rule 9,) The court may render judgment upon the pleadings if
material averments in the complaint are admitted. (Section 10, Rule 35; Baetamo
vs. Amador, supra, Lichauco vs. Guash, 76 Phil. 5; Lati vs. Valmores, G.R. No. L-
6877, 30 March 1954.)
CIVIL PROCEDURE CASES – Judgement and Final Orders (Rule 36)
There are two other reasons why the present appeal must fail. First. The present action is
founded upon a written instrument attached to the complaint, but defendant-appellant
failed to deny under oath the genuineness and due execution of the instrument; hence,
the same are deemed admitted. (Section 8, Rule 8 of the Revised Rules of Court; Songo
vs. Sellner, 37 Phil. 254; Philippine Commercial & Industrial Bank vs. ELRO Development
Corporation, et al., G.R. No. L-30830, August 22, 1969 [29, SCRA 38]; J. P. Juan & Sons,
Inc. vs. Lianga Industries, Inc., supra.) Second. Defendant-appellant did not oppose the
motion for judgment on the pleadings filed by plaintiff appellee; neither has he filed a
motion for reconsideration of the order of September 13, 1966, which deemed the case
submitted for decision on the pleadings, or of the decision rendered on January 9, 1967.
In Santiago vs. Basilan Lumber Company, G.R. No. L-15532, October 31, 1963 (9 SCRA
349), this Court said:
It appears that when the plaintiff moved to have the case decided on the pleadings,
the defendant interposed no objection and has practically assented thereto. The
defendant, therefore, is deemed to have admitted the allegations of the complaint,
so that there was no necessity for the plaintiff to submit evidence of his claim.
PREMISES CONSIDERED, the judgment appealed from is affirmed, with cost against
defendant-appellant.

It becomes evident from all the above doctrines that a mere allegation of ignorance of the
facts alleged in the complaint, is insufficient to raise an issue; the defendant must aver
positively or state how it is that he is ignorant of the facts so alleged. (Francisco, The
Revised Rules of Court in the Philippines, Vol. I, p. 417, citing Wood vs. Staniels, 3 Code
Rep. 152 and Vassalt vs. Austin, 32 Cal. 597.)

Thus, in at least two (2) cases where this Court ruled that judgment on the pleadings was
not proper, it will be seen that the reason was that in each case the defendants did
something more than merely alleging lack of knowledge or information sufficient to form a
belief. In Arrojo vs. Caldoza, et al., G.R. No. L-17454, July 31, 1963 (8 SCRA 547), the
defendants, in their answer to the complaint for recovery of possession of a parcel of land,
did not merely allege that they had no knowledge or information sufficient to form a belief
as to the truth of the material allegations in the complaint, but added the following: "The
truth of the matter is that the defendants have not occupied or taken any property belonging
to the plaintiff. They took possession and ownership only of the land belonging to them,
which properties were possessed and owned originally by their predecessors-in-interest,
who were the parents of the defendants ...." In Benavides vs. Alabastro, G.R. No. L-19762,
December 23, 1964 (12 SCRA 553), the defendant's answer did not only deny the material
allegations of the complaints but also set up certain special and affirmative defenses the
nature of which called for presentation of evidence.

3

G.R. No. L-10884 March 31, 1959
PHILIPPINE NATIONAL BANK, plaintiff-appellee, vs. PHILIPPINE LEATHER CO. INC.,
ET AL., defendants-appellants.
In its complaint filed in the Court of First Instance of Manila, the plaintiff alleges that on 1
September 1952 the defendant Philippine Leather Co., Inc. applied for a commercial letter
of credit in the sum of $14,814.80, in U.S. currency, under the terms and conditions set
forth in an application filed by the defendants in favor of the Turner Tanning Machinery Co.
of Peabody, Massachusetts, U.S.A. to cover the full invoice value of certain machineries
and their accessories; that on 3 October 1952 the plaintiff approved the application "subject
to 30% deposit and the joint and several signatures of Mr. Isidoro Tinoco and Mrs. Soledad
L. Basa" which conditions were complied with; that on 8 October 1952, the plaintiffs issued
Letter of Credit No. 51469 in favor of the Turner Tanning Machinery Company; that on 15
November 1952 the Turner Tanning Machinery Co., drew upon the letter of credit the sum
of $14,549.17, U.S. currency; that upon arrival in the Philippines of the machineries and
their accessories imported by the defendants under a trust receipt, that on 23 January
1953 the plaintiff presented to the defendants for payment the draft drawn by the Turner
Tanning Machinery Co., upon Letter of Credit No. 51469 which was accepted by them;
that after the draft had matured on 23 April 1953 the plaintiff made numerous demands
upon the defendants to pay the amount of the draft and the charges due thereon but the
defendants failed and refused to pay; and that as of 15 October 1953, the outstanding
balance of the defendants on the draft is P22,787.79, Philippine currency, plus interest
thereon at the rate of P4.89135 daily until fully paid. It alleges further that on 30 January
1953 the defendant Philippine leather Co., Inc., applied for a commercial letter of credit in
the sum of $2,587.50, U.S. currency, under the terms and conditions set forth in an
application filed by the defendants in favor of Bay State Chemical Co., of Boston,
Massachusetts, U.S.A., to pay for the importation of color dye; that the plaintiff approved
the application "subject to 30% deposit and the joint and several signatures of Mr. Isidoro
Tinoco and Mrs. Soledad L. Basa," which conditions were complied with; that thereafter
the plaintiff issued Letter of Credit No. 53753 in favor of the Bay State chemical Co., that
on 12 March 1953 the Bay State Chemical Co., drew upon the letter of credit the sum of
$2,482.40, U.S. currency; that the draft drawn by the Bay State Chemical Co., was
presented by the plaintiff to the defendants for payment; that the defendants failed and
refused to pay the amount of the draft and the charges due thereon; that because of the
failure and refusal of the defendants to pay their obligation, the plaintiff delivered the
documents of the shipment to the Luzon Brokerage Co., and requested it to claim and
store the shipment in its bonded warehouse, for which service and storage the defendants
are liable to the Luzon Brokerage Co.; that as of 15 October 1953; the outstanding balance
of the defendants on the draft is P4,503.05, Philippine currency, plus interest thereon at
the rate of P.083569 daily until fully paid.
The plaintiff prays that after hearing judgment be rendered ordering the defendants to pay
it the sum of P22,787.79, with daily interest thereon at the rate of P4.89135 from 15
CIVIL PROCEDURE CASES – Judgement and Final Orders (Rule 36)
October 1953 until fully paid; 10% of the said amount as attorney's fee; P4,503.05, with
daily interest thereon at the rate of P0.83569 from 15 October 1953 until fully paid; the
amount of storage and other charges that the Luzon Brokerage Co., would charge the
plaintiff for the handling and storage of the merchandise imported by the defendants under
Letter of Credit No. 53753; and the costs of the suit. The plaintiff further prays that pending
hearing and final judgment, a writ of attachment be issued commanding the Sheriff of the
City of Manila to levy upon attachment on the properties of the defendants as security for
the satisfaction of any judgment that it may secure against them.
In their answer filed on 28 December 1953 the defendants admit the plaintiff's averments
except as to the correctness of the amounts due on the two drafts, the correctness of which
they were still checking, and for that reason lacking sufficient knowledge or information to
form a belief as to the truth and veracity of the amounts due on the two drafts, they deny
the amounts claimed by the plaintiff to be due from them.
On 25 June 1954 the plaintiff filed a motion for summary judgment on the ground that since
the defendants had admitted the material averments of its complaint except as to the
correctness of the amounts due, the defendant's answer did not tender a genuine issue.
The plaintiff attached to its motion an affidavit subscribed and sworn to by Ceferino
Saavedra, Manager of the Special Assets Department of the plaintiff, in charge of all
outstanding accounts of its debtors, stating the payments made by the defendants on their
account and the exact total amount due from them.
On 7 October 1954 the Court granted the plaintiff's motion and rendered judgment ordering
the defendants, jointly and severally, to pay —
. . . the plaintiff in the first cause of action, the amount of P22,787.79, with a daily
interest of P4.89135 from October 15, 1953 up to full payment thereof, and 10%
of the amount due for attorney's fees. On the second cause of action, defendants
shall pay, jointly and severally, the sum of P4,503.05, with a daily interest of
P0.83569 from October 15, 1953 until full payment thereof.
Defendants shall also pay the costs.
The defendants appealed to the Court of Appeals. The latter certified the case to this Court
for the reason that only questions of law are raised.
Rule 36 provides:
Section 1. Summary judgment for claimant. — A party seeking to recover upon a
claim, counterclaim, or crossclaim or to obtain a declaratory relief may, at any time
4
 CIVIL PROCEDURE CASES – Judgement and Final Orders (Rule 36)
after the pleading in answer thereto has been served, move with affidavits for a
summary judgment in his favor upon all or any part thereof.

SEC. 3. Motion and proceedings thereon. — The motion shall be served at least
ten days before the time specified for the hearing. The adverse party prior to the
day of hearing may serve opposing affidavits. The judgment sought shall be
rendered forthwith if the pleadings, depositions, and admissions or file, together
with the affidavits, show that, except as to the amount of damages, there is no
genuine issue as to any of the material fact and that the moving party is entitled to
a judgment as a matter of law.

SEC. 5. Form of affidavits. — Supporting and opposing affidavits shall be made on

personal knowledge, shall set forth such facts as would be admissible in evidence,
and shall show affirmatively that the affiant is competent to testify to the matters
stated therein. Sworn or certified copies of all papers of parts thereof referred to in
an affidavit shall be attached thereto or served therewith.

The defendant's answer that as to the first cause of action they—

. . . are still checking on the correctness of the alleged balance outstanding against
them and in favor of the plaintiff; consequently, for lack of knowledge or information
sufficient to form a belief as to the truth and veracity of the averments embodied in
paragraph 7 thereof, they hereby specifically deny the allegations therein stated;

and that so to the second cause of action they—

. . . are checking on the veracity and correctness of the balance allegedly

outstanding in favor of the plaintiff manifested in paragraph 6 of the same, they, by
virtue thereof, specifically deny it for lack of knowledge and belief as to the truth of
the allegations embodied in the aforestated paragraph.

does not tender a genuine issue. In fact they admit that they are indebted to the plaintiff.
As the affidavit subscribed and sworn to by the Manager of the Special Assets Department
of the plaintiff, in charge of all outstanding accounts of its debtors, attached to the motion
for summary judgment, furnishes the Court with the payments made by the defendants on
their account and the amount due from them, which they failed to oppose by counter
affidavits, the plaintiff is entitled to summary judgment.1

The judgment appealed from is affirmed, with costs against the appellants.

5

G.R. No. L-49668 November 14, 1989
POLICARPIO, LUCIO, JULIAN, CATALINO, BONIFACIO, CONRADA, DOMINGO,
PAQUITA, AND LILIA, ALL SURNAMED GALICIA, petitioners, vs. THE HON.
WENCESLAO M. POLO, in his capacity as Presiding Judge, CFI, Branch V, Samar
(Calbayog City), ZOSIMA PALAJOS, TITING LISTOJAS, ALFREDO PALAJOS,
MANUELITO ROSIALDA, respondents.
This is a petition for review on certiorari seeking to set aside the summary judgment
entered by the then Court of First Instance of Samar, Br. V in Civil Case No. 758-CC
entitled, "Policarpio, Lucio, Julian, Catalino, Bonifacio, Conrada, Domingo, Paquita and
Lilia, all surnamed Galicia v. Zosima Palajos, Titing Listojas, Alfredo Palajos and Manuelito
Rosialda" and to order the trial court to try the above-cited case on the merits.
The facts are undisputed.
On December 15, 1973. a complaint for forcible entry (Civil Case No. 56) entitled "Amancio
Palajos v. Policarpio, Perfecto, Victorio Julian and Eduardo, all surnamed Galicia," was
filed in the Municipal Court of Almagro, Samar, alleging that Amancio Palajos is the owner
and in actual possession of a parcel of land located at Bacjao, Almagro, Samar, more
particularly described as follows:
A parcel of land with an area of about 4-88-00 hectares, more or less, assessed at
P 360.00 as per Tax Declaration No. 8547 in the name of Juan Palajos, it is,
however, 14.2860 hectares as per approved survey plan, the boundaries of which
are: N — Pedro Galicia and the Poblacion of Barrio Bacjao; S — Emilio Carpon,
Magno Suico and Teresa Subito; and W — Bernardo Ballarante and Cenon S.
Aguilar.
which he acquired by way of donation from his father, Juan Palajos. It is further alleged
that defendants (petitioners herein) forcibly entered the northeastern portion of the said
property covering an area of about 1 1/2 hectares.
The trial of the case was set several times but was postponed at the instance of defendants
(petitioners herein). For the fifth time, i.e., on July 19, 1974, neither the defendants nor
counsel appeared. Accordingly, the court granted a trial ex parte on motion of plaintiffs
counsel (Rollo, p. 24).
Subsequently, the municipal trial court rendered judgment against defendants (petitioners
herein), the dispositive portion of which reads:
WHEREFORE, this Court hereby renders judgment ordering defendants
Policarpio Galicia, Perfecto Galicia, Victorio Galicia, Julian Galicia and Eduarda
CIVIL PROCEDURE CASES – Judgement and Final Orders (Rule 36)
Galicia to restore to plaintiff Amancio Palajos the portion of land described in par.
4 of the plaintiffs complaint consisting of one and one-half hectares and which is
the northeastern portion of land under Tax Dec. No. 8547 as described in
paragraph 2 thereof, ordering the defendants to pay to plaintiff a monthly rental in
the amount of FIFTY PESOS (P 50.00) on the premises in question for its use and
occupation from September, 1973, up to the time when said premises is finally
restored to the plaintiff, and to pay the costs. SO ORDERED.
On September 28, 1974, defendants filed a motion for reconsideration and to grant a new
trial but was denied in an Order dated October 24, 1974 (Rollo, p. 28).
On November 12, 1974, defendants filed a notice of appeal but the same was likewise
denied by the trial court on the ground that it was filed beyond the reglementary period of
fifteen (15) days to perfect an appeal.
For failure of the defendants to pay the rentals adjudged in the forcible entry case (CC No.
56), a writ of execution was issued and after levy, the deputy sheriff of Calbayog City, on
August 4, 1976, sold at public auction the real property owned by petitioners' deceased
father adjoining the land subject of the forcible entry case more particularly described as
follows:
A piece of real estate consisting of coconut and cornland situated at Bo. Bacjao,
Almagro, Samar, Philippines, bounded on the NORTH, by Isabelo Palajos; on the
SOUTH, by Narciso Pajalino; and on the WEST, by Seashore, containing an area
of 2-60-00 hectares, more or less assessed at P180.00, under Tax Declaration No.
12048, in the name of Pedro Galicia (deceased); (Rollo, p. 30).
On October 10, 1977, or over 14 months after the execution sale, petitioners filed a
complaint for Ownership and Damages against herein respondents in the then Court of
First Instance of Samar, 13th Judicial District, Br. V, docketed as Civil Case No. 758-CC,
alleging that they are co-owners of a certain parcel of agricultural land (subject of the
auction sale) which they inherited from their deceased father, Pedro Galicia, more
particularly described as follows:
A parcel of coconut and corn land located at Bacjao, Almagro, Samar, Philippines,
with an area of 26,000 sq. m. and bounded on the NORTH, by Isabelo Palajos;
SOUTH, by Narciso Pauline; EAST, by Benedicto Paulino and WEST, by
Seashore covered by Tax Declaration No. 12048 in the name of Pedro Galicia.
The complaint further alleged that pursuant to Civil Case No. 56 (forcible entry case),
respondents were able to take possession of the land in question as said case was heard
6

ex-parte; and that a decision was rendered in respondents' favor and said decision was
executed sometime in 1976 (Rollo, p. 36-37).
In their Answer, respondents (defendants below) countered that they were able to take
possession of the land described in the complaint by virtue of the decision and later,
execution of the decision in the forcible entry case, which, by petitioners' (plaintiffs below)
averment in their complaint is an admission of an existing judgment that would
constitute res judicata; that they are the lawful owners of the disputed land the same
having been subjected to levy and execution in 1975 thru a sale in favor of respondents'
predecessor-in-interest, Juan Palajos.
The issues having been enjoined, the case was set for pre-trial by respondent judge Hon.
Wenceslao M. Polo. At the pre-trial, counsel for private respondents moved for time within
which to file a motion for summary judgment which was granted by respondent judge in
his order dated June 28, 1978.
Defendants' (private respondents herein) motion for summary judgment was filed on July
7, 1978 (Rollo, p. 43) alleging that no genuine issue exists in the case at bar after the pre-
trial was conducted and admission of facts were had (Rollo, p. 44), while plaintiffs
(petitioners herein) filed their opposition to the motion for summary judgment dated July
17, 1978 alleging among others, that genuine issues exist (Rollo, pp. 45-47).
On August 11, 1978, the court a quo rendered the assailed summary judgment dismissing
petitioners' complaint (Rollo, p. 48-53), the pertinent portion of which reads:
As demonstrated by the parties, there is no question that the land in dispute is that
parcel described in paragraph 3 of the complaint, a portion of which was a subject
in a forcible entry case before the Municipal Trial Court of Almagro Samar (Exhibit
1, 2 and 3) with the defendants now as sucessors-in-interest of the plaintiff, and
most of the herein plaintiffs as defendants.
The pleadings also show that upon the death of the primitive owner, Pedro Galicia,
the plaintiffs as children and grandchildren possessed and owned this land pro-
indiviso, until the possession of said portion was transferred to the defendants
when the decision in that forcible entry case was executed in 1976 (Exhibit 7) such
being the case, therefore, with respect to this portion of the land in dispute, the
possession is settled, which would constitute as a bar to this action.
xxx xxx xxx
With respect to the other portion of the land in dispute, the plaintiffs admit that
possession was transferred to the defendant by virtue of a sale executed by the
CIVIL PROCEDURE CASES – Judgement and Final Orders (Rule 36)
sheriff; the one year period having elapsed without exercising their right of
redemption, as a result a final deed of sale was issued. The legality of the sale not
having been assailed by them, for all intents and purposes, ownership on this land
have been vested on the defendants as heirs of Juan Palajos.
WHEREFORE, premises above considered, judgment is hereby rendered ordering
the dismissal of the plaintiffs' complaint, without pronouncement as to cost."
A motion to re-open the case for trial on the merits was filed by plaintiffs but was denied in
an order dated November 27, 1978 (Rollo, p. 62). Hence, this instant petition.
Petitioners contend that the trial court erred when it decided Civil Case No. 758-CC by
summary judgment when there are several genuine issues involved therein which require
a trial of these issues on the merits, such as:
(A) WAS THE EXECUTION SALE CONDUCTED BY DEPUTY PROVINCIAL
SHERIFF EUFROCINO T. OLIFERNES OF LOT NO. 1363 OF THE LATE PEDRO
GALICIA, PETITIONERS' FATHER, VALID TO CONFER UPON THE
DEFENDANTS IN SAID CASE A JUST TITLE OVER SAID REALTY?
(B) WERE THE UNDIVIDED SHARES AND PARTICIPATIONS OF JULIAN
GALICIA AND CATALINO GALICIA WHO WERE TWO OF THE LEGITIMATE
CHILDREN OF PEDRO GALICIA NOT IMPLEADED AS PARTIES IN CIVIL CASE
NO. 56 IN THE MUNICIPAL COURT OF ALMAGRO OVER LOT NO. 1363,
AFFECTED BY THAT EXECUTION SALE?
(C) WERE THE UNDIVIDED SHARES AND PARTICIPATIONS OF EDUARDA
GALICIA AND PERFECTO GALICIA OVER LOT NO. 1363, BUT WHO WERE
NOT IMPLEADED AS PARTIES IN CIVIL CASE NO. 758-CC OF THE COURT
OF FIRST INSTANCE OF SAMAR (CALBAYOG CITY) AFFECTED BY THE
DECISION OF THE LATTER COURT OF SUMMARY JUDGMENT? (Rollo, p. 10).
The crucial issue in this case is whether or not the trial court erred when it decided Civil
Case No. 758-CC by summary judgment.
It is the contention of petitioners that the trial court erred in deciding their complaint (CC
No. 758-CC) by summary judgment when there are several genuine issues involved
therein which require a full trial on the merits. Among other things, petitioners contend that
the execution sale conducted by the Deputy Provincial Sheriff was null and void and would
have merited a trial on the merits. Moreover, it is further contended that as between Civil
Case No. 56 and Civil Case No. 758-CC, there can be no res judicata, considering that
there is no Identity of parties, cause of action and subject matter between the two actions.
7

After a thorough review of the records, the Court finds no cogent reason to disturb the
summary judgment rendered by respondent judge.
The Rules of Court authorizes the rendition of summary judgment if the pleadings,
depositions and admissions on file together with the affidavits, show that, except as to the
amount of damages, there is no issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law (Sec. 3, Rule 34). Conversely, summary judgment
is not proper where the pleadings tender vital issues the resolution of which call for the
presentation of evidence (Villanueva v. NAMARCO, 28 SCRA 729 [1969]; Guevarra, et
al., v. CA, et al., 124 SCRA 297 [1983]).
Summary judgment "is a device for weeding out sham claims or defenses at an early stage
of the litigation, thereby avoiding the expense and loss of time involved in a trial. The very
object is 'to separate what is formal or pretended in denial or averment from what is
genuine and substantial, so that only the latter may subject a suitor to the burden of trial.'
The test, therefore, of a motion for summary judgment is-whether the pleadings, affidavits,
and exhibits in support of the motion are sufficient to overcome the opposing papers and
to justify a finding as a matter of law that there is no defense to the action or the claim is
clearly meritorious" (Estrada v. Hon. Consolacion, et al., 71 SCRA 523 [1976]).
In addition, summary judgment is one of the methods sanctioned in the present Rules of
Court for a prompt disposition of civil actions wherein there exists no serious controversy.
The procedure may be availed of not only by claimants, but also by defending parties who
may be the object of unfounded claims. A motion for summary judgment assumes that
scrutinizing the facts will disclose that the issues presented by the pleadings need not be
tried because they are so patently unsubstantial as not to be genuine issues, or that there
is no genuine issue as to any material facts or where the facts appear undisputed and
certain from the pleadings, depositions, admissions and affidavits (Singleton v. Philippine
Trust Co., 99 Phil, 91 [1956], cited in Bayang v. CA, 148 SCRA 91 [1987]).
Examining petitioners' complaint, the Court finds that the disputed property is the same
parcel of land, which adjoins private respondents' lot which was the subject of the forcible
entry case and from which petitioners were ordered to vacate. When petitioners (then
defendants), failed to satisfy the rentals adjudged in the forcible entry case, said adjoining
parcel of land was sold at public auction to Juan Palajos (respondents' predecessor-in-
interest) as the higher bidder in the execution sale to satisfy the monetary judgment
rendered therein. The property so described in petitioners' complaint (Rollo, p. 36)
squarely fits what has been levied upon and sold at public auction (Rollo, p. 30), the owners
of which are now private respondents upon the demise of their predecessor-in-interest.
There is thus no question that issue of ownership of the disputed land subject of the
present petition has long been foreclosed in the forcible entry case which culminated in
the public auction sale of the parcel of land now sought to be recovered. Having failed to
CIVIL PROCEDURE CASES – Judgement and Final Orders (Rule 36)
redeem the property sold at the public auction sale within the reglementary period of twelve
(12) months (Sec. 30, Rule 39 of the Rules of Court), petitioners cannot now claim that
they still own said property. Petitioners' complaint for Ownership and Damages is but a
belated and disguised attempt to revive a judgment debtors' right of redemption which has
long expired. There being no issue as to any material fact raised in the pleadings, summary
judgment may be rendered.
Neither can the issue of the validity of the execution sale help petitioners' cause. Well-
settled in this jurisdiction, is the rule that issues not raised and/or ventilated in the lower
court cannot be raised for the first time on appeal (Rebodos v. WCC, 6 SCRA 717 [1962];
DBP v. CA, 116 SCRA 636 and a long line of cases). A review of the records of the case
shows that petitioners failed to directly assail and raise as issue, the validity of the
aforementioned auction sale in their complaint. It was only when the respondent judge
noted such omission in his decision dismissing Civil Case No. 758-CC dated August 11,
1978 (Rollo, p. 48-53) that petitioners later filed a separate action for Annulment of Auction
Sale and Damages on October 4, 1978 (Civil Case No. 837-CC; Rollo, p. 31-35). The
validity of the execution sale not having been raised and/or litigated in the case subject of
the present appeal, the Court, at this stage, cannot pass upon the same for the purpose
of determining the propriety of the summary judgment. Objections to the execution sale
cannot be considered in the Supreme Court inasmuch as it was not raised in the lower
court (Ramiro v. Grano 54 Phil. 744 [1930]; citing Tan Machan v. de la Trinidad, 3 Phil.
684 [1904] and U.S. v. Inductive, 40 Phil. 84 [1919]).
WHEREFORE, the instant petition is hereby DENIED for lack of merit. Costs against
petitioners.
SO ORDERED.
8

G.R. No. 106436 December 3, 1994
VIRGILIO D. IMSON, petitioner, vs. HON. COURT OF APPEALS, HOLIDAY HILLS
STOCK AND BREEDING FARM CORPORATION, FNCB FINANCE
CORPORATION, respondents.
The case at bench arose from a vehicular collision on December 11, 1983, involving
petitioner's Toyota Corolla and a Hino diesel truck registered under the names of private
respondents FNCB Finance Corporation and Holiday Hills Stock and Breeding Farm
Corporation. The collision seriously injured petitioner and totally wrecked his car.
On January 6, 1984, petitioner filed with the RTC Baguio City a Complaint for
1
Damages 2 Sued were private respondents as registered owners of the truck; truck driver Felix
B. Calip, Jr.; the beneficial owners of the truck, Gorgonio Co Adarme, Felisa T. Co (also known
as Felisa Tan), and Cirilia Chua Siok Bieng, and the truck insurer, Western Guaranty
Corporation.
The Complaint prayed that defendants be ordered to pay, jointly and severally, two
hundred seventy thousand pesos (P270,000.00) as compensatory damages, fifty
thousand pesos (P50,000.00) each as moral and exemplary damages, and attorney's fees,
litigation expenses, and cost of suit. 8
Defendants driver and beneficial owners failed to answer and were declared in default. On 4
May 29, 1987, however, petitioner and defendant insurer, entered into a compromise
agreement which provided, inter alia:
1. Defendant Western Guaranty Corporation (Western Guaranty for short) admits
that its total liability under the laws and the insurance contract sued upon is
P70,000.00;
2. In full settlement of its liability under the laws and the said insurance contract,
defendant Western Guaranty shall pay plaintiff (herein petitioner) the amount of
P70,000.00 upon the signing of this compromise agreement;
3. This compromise agreement shall in no way waive nor prejudice plaintiffs
(herein petitioner's) rights to proceed against the other defendants with respect the
remainder of his claims;
4. This compromise agreement shall be a full and final settlement of the issues
between plaintiff (herein petitioner) and defendant Western Guaranty in their
complaint and answer and, from now on, they shall have no more right against one
another except the enforcement of this compromise agreement.
CIVIL PROCEDURE CASES – Judgement and Final Orders (Rule 36)
In consequence of the compromise agreement, the trial court dismissed the Complaint for
Damages against Western Guaranty Corporation on June 16, 1987. 8 A copy of the Order
of dismissal was received by private respondent Holiday Hills Stock and Breeding Farm
Corporation on July 13, 1987. Nearly eighteen (18) months later, said private respondent
moved to dismiss the case against all the other defendants. It argued that since they are all
indispensable parties under a common cause of action, the dismissal of the case against
defendant insurer must result in the dismissal of the suit against all of them. The trial court
denied the motion.
Private respondent Holiday Hills Stock and Breeding Farm Corporation assailed the denial
order through a Petition for Certiorari, Prohibition and Mandamus With Restraining Order
filed with respondent Court of Appeals. The Petition was docketed as CA-G.R. SP No.
17651. On July 10, 1992, the Court of Appeals, 7 through its Special Sixth Division, 8 reversed
the trial court, as it ruled:
The petitioner (herein private respondent Holiday Hills Stock and Breeding Farm
Corporation) cites the doctrine laid down in Lim Tanhu v. Hon. Ramolete, 66 SCRA 425,
as applied later in Co v. Acosta, 134 SCRA 185, to support its averment that the court a
quo gravely abused its discretion in refusing to dismiss the case.
Essentially, the doctrine adverted to essays that in a common cause of action where all
the defendants are indispensable parties, the court's power to act is integral and cannot
be split, such that it cannot relieve any of them and at the same time render judgment
against the rest.
We find applicability of the doctrine to the case at bar.
A cursory reading of the complaint . . . reveals that the cause of action was the alleged
bad faith and gross negligence of the defendants resulting in the injuries complained of
and for which the action for damages was filed. The inclusion of Western Guaranty
Corporation was vital to the claim, it being the insurer of the diesel truck without which, the
claim could be set for naught. Stated otherwise, it is an indispensable party as the
petitioner (herein private respondent stock and breeding farm corporation) . . . . Private
respondent's (herein petitioner's argument that the said insurance company was sued on
a different cause of action, i.e., its bounden duty under the insurance law to pay or settle
claims arising under its policy coverage, is untenable, for the cited law perceives the
existence of a just cause, and according to the answer filed by the Western Guaranty
Corporation . . . the proximate cause of the accident was the fault of the plaintiff (herein
petitioner), hence it was not liable for damages. There is in fact a congruence of affirmative
defense among the answering defendants.
Moreover, it is undisputed that the injury caused is covered by the insurance company
concerned. Thus, when the said insurer settled its liability with the private respondent
9

(petitioner herein) . . . , the other defendants, as the insured and indispensable parties to
a common cause of action, necessarily benefited from such settlement including the
defaulted defendants, for as stated in the aforecited cases, it is deemed that anything done
by or for the answering defendant is done by or for the ones in default since it is implicit in
the rule that default is in essence a mere formality that deprives them of no more than to
take part in the trial, but if the complaint is dismissed as to the answering defendant, it
should also be dismissed as to them. 9 (Citations omitted.)
Petitioner now comes to this Court with the following assignments of error:
A. RESPONDENT COURT OF APPEALS COMMITTED A REVERSIBLE ERROR
IN RULING THAT THE DEFENDANTS IN CIVIL CASE NO. 248-R ARE
INDISPENSABLE PARTIES;
B. RESPONDENT COURT OF APPEALS COMMITTED A REVERSIBLE ERROR
IN RULING THAT IN CIVIL CASE NO. 248-R THERE IS A COMMON CAUSE OF
ACTION AGAINST THE DEFENDANTS THEREIN;
C. RESPONDENT COURT OF APPEALS COMMITTED A REVERSIBLE ERROR
IN RULING THAT IN CIVIL CASE NO. 248-R THE RULING OF THIS
HONORABLE COURT IN LIM TAN HU VS. RAMOLETE IS APPLICABLE;
D. RESPONDENT COURT OF APPEALS COMMITTED A REVERSIBLE ERROR
IN RULING THAT THE DOCTRINE OF ESTOPPEL AND LACHES ON MATTERS
OF JURISDICTION IS NOT APPLICABLE IN CIVIL CASE NO. 248-R.
There is merit to the petition,.
In the case of Lim Tanhu v. Ramolete, 66 SCRA 425, 458-459 (1975) this court held that:
. . . (I)n all instances where a common cause of action is alleged against several
defendants, some of whom answer and the others do not, the latter or those in
default acquire a vested right not only to own the defense interposed in the answer
of their co-defendant or co-defendants not in default but also to expect a result of
the litigation totally common with them in kind and in amount whether favorable or
unfavorable. The substantive unity of the plaintiffs cause against all the defendants
is carried through to its adjective phase as ineluctably demanded by the
homogeneity and indivisibility of justice itself. . . . The integrity of the common
cause of action against all the defendants and the indispensability of all of them in
the proceedings do not permit any possibility of waiver of the plaintiffs right only as
to one or some of them, without including all of them, and so, as a rule, withdrawal
must be deemed to be a confession of weakness as to all. . . . . Where all the
CIVIL PROCEDURE CASES – Judgement and Final Orders (Rule 36)
defendants are indispensable parties, for which reason the absence of any of them
in the case would result in the court losing its competency to act validly, any
compromise that the plaintiff might wish to make with any of them must, as a matter
of correct procedure, have to await until after the rendition of the judgment, at which
stage the plaintiff may then treat the matter of its execution and the satisfaction of
his claim as variably as he might please. Accordingly, in the case now before Us
together with the dismissal of the complaint against the non-defaulted defendants,
the court should have ordered also the dismissal thereof as to petitioner (referring
to the defaulting defendants in the case).
In sum, Lim Tanhu states that where a complaint alleges a common cause of action
against defendants who are all indispensable parties to the case, its dismissal against any
of them by virtue of a compromise agreement with the plaintiff necessarily results in the
dismissal of the case against the other defendants, including those in default. The ruling
is rooted on the rationale that the court's power to act in a case involving a common cause
of action against indispensable parties "is integral and cannot be split such that it cannot
relieve any of them and at the same time render judgment against the rest. 10
For Lim Tanhu to apply to the case at bench, it must be established that: (1) petitioner has
common cause of action against private respondents and the other defendants in Civil
Case No. 248-R; and (2) all the defendants are indispensable parties to the case.
Cause of action has a fixed meaning in this jurisdiction. It is the delict or wrong by which
the right of the plaintiff is violated by the defendant. 11 The question as to whether a plaintiff
has a cause of action is determined by the averments in the pleadings pertaining to the acts of
the defendant. Whether such acts give him a right of action is determined by substantive law. 12
In the case at bench, it is clear that petitioner has different and separate causes of action
against the defendants in the case. The allegations in the Complaint show that petitioner
seeks to recover from the truck driver for his wrong which caused injury to petitioner and
his car. The cause of action against him is based on quasi-delict under Article 2176 of the
New Civil Code. Quasi-delict, too, is the basis of the cause of action against defendants
beneficial and registered owners. But in their case, it is Article 2180 of the same Code
which governs the rights of the parties.
However, with respect to defendant Western Guaranty Corporation, petitioner's cause of
action is based on contract. He seeks to recover from the insurer on the basis of the third
party liability clause of its insurance contract with the owners of the truck. This is
acknowledged by the second paragraph of the compromise agreement between petitioner
and defendant insurer, thus:
10
 CIVIL PROCEDURE CASES – Judgement and Final Orders (Rule 36)
2. In full settlement of its liability under the laws and the said insurance contract,
defendant Western Guaranty shall pay plaintiff (herein petitioner) the amount of
P70,000.00 upon the signing of this compromise agreement.

Quite clearly then, Lim Tanhu will not apply to the case at bench for there is no
showing that petitioner has a common cause of action against the defendants in
Civil Case No. 248-R.

But this is not all. Defendants in Civil Case No. 248-R are not all indispensable parties. An
indispensable party is one whose interest will be affected by the court's action in the
litigation, and without whom no final determination of the case can be had. The party's
interest in the subject matter of the suit and in the relief sought are so inextricably
intertwined with the other parties' that his legal presence as a party to the proceeding is
an absolute necessity. 13 In his absence there cannot be a resolution of the dispute of the
parties before the court which is effective, complete, or equitable. 14

Conversely, a party is not indispensable to the suit if his interest in the controversy or
subject matter is distinct and divisible from the interest of the other parties and will not
necessarily be prejudiced by a judgment which does complete justice to the parties in
court. 15 He is not indispensable if his presence would merely permit complete relief between
him and those already parties to the action, or will simply avoid multiple litigation. 16

It is true that all of petitioner's claims in Civil Case No. 248-R is premised on the wrong
committed by defendant truck driver. Concededly, the truck driver is an indispensable party
to the suit. The other defendants, however, cannot be categorized as indispensable
parties. They are merely proper parties to the case. Proper parties have been described
as parties whose presence is necessary in order to adjudicate the whole controversy, but
whose interests are so far separable that a final decree can be made in their absence
without affecting them. 17 It is easy to see that if any of them had not been impleaded as
defendant, the case would still proceed without prejudicing the party not impleaded. Thus, if
petitioner did not sue Western Guaranty Corporation, the omission would not cause the
dismissal of the suit against the other defendants. Even without the insurer, the trial court would
not lose its competency to act completely and validly on the damage suit. The insurer, clearly,
is not an indispensable party in Civil Case No. 248-R.

IN VIEW WHEREOF, the instant petition is GRANTED. The Decision, dated July 10, 1992,
of the Court of Appeals in CA-G.R. SP No. 17651 is REVERSED AND SET ASIDE. The
Complaint in Civil Case No. 248-R is REINSTATED and REMANDED to the trial court for
further proceedings. No costs. SO ORDERED.

11