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CIVIL PROCEDURE (Atty.

Catherine Guerzo-Barrion) 1
3RD EXAM COVERAGE CASE ASSIGNMENT
RULE 17, SEC. 3
SPS. CORPUZ v. CITIBANK
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 175677

July 31, 2009

SPOUSES AZUCENA B. CORPUZ AND RENATO S.


CORPUZ, Petitioners,
vs.
CITIBANK, N.A. AND HON. RAUL B. VILLANUEVA as
Presiding Judge of Branch 255, Regional Trial Court in
Las Pias City, Respondents.

Informed of the incidents via overseas telephone calls to


Manila, Azucenas husband Renato Corpuz (Renato)
inquired why his wifes credit cards were not honored, to
which Citibank explained that her check-payments had not
yet been cleared at the time.4
Upon her return to the country, Azucena wrote Citibank on
January 13, 1999 informing it that her credit cards had not
been honored and demanding the refund of her overseas
call expenses amounting to 132,000 liras or P3,175.00 at the
time.5 Citibank did not respond to the letter, however,
drawing Azucena to write Citibank for the cancellation of the
cards.6
Citibank still sent billing statements to Azucena, however,
charging her interest charges and late payment penalties.7
Only after Azucenas counsel informed Citibank of imminent
legal remedies8 on her part did Citibank indulge Azucena
with a written explanation why her credit cards were not
honored in Italy.9

x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 177133

July 31, 2009

CITIBANK, N.A., Petitioner,


vs.
SPOUSES AZUCENA B. CORPUZ AND RENATO S.
CORPUZ, Respondents.

Azucena and Renato (hereafter the spouses) later filed on


November 12, 1999 a complaint for damages against
Citibank at the Regional Trial Court of Las Pias City.
To the Complaint, Citibank filed a motion to dismiss for
improper venue.10 The spouses opposed the motion and
moved to have Citibank declared in default.11 Branch 255 of
the RTC, by Order of September 28, 2000, denied the
motion to dismiss as well as the motion to declare Citibank in
default.12

DECISION
CARPIO MORALES, J.:
The facts which spawned the filing of the present
consolidated petitions are as follows:
Azucena Corpuz (Azucena) was a cardholder of Citibank
Mastercard No. 5423-3925-5788-2007 and Citibank VISA
Card No. 4539-7105-2572-2001 both issued by Citibank,
N.A. (Citibank). Each card had a credit limit of P40,000.00. In
view of her then impending official business trip to Europe,
Azucena paid in full on December 7, 1998 her monthly
charges1 on both credit cards via checks and also made
advance check payments of P20,000.00 on December 8,
1998 for her VISA Card, and another P20,000.00 for her
Mastercard on December 14, 1998, to cover future
transactions.2
While in Italy on December 9, 1998, Azucena dined at a
restaurant. To settle her bill of 46,000 liras, she presented
her VISA Card, but to her surprise and embarrassment, the
restaurant did not honor it. She then brought out her
Mastercard which the restaurant honored. On even date,
Azucena incurred a bill of 378,000 liras at a shop which she
intended to charge to her credit cards. This time, both her
VISA and Mastercard were not honored, drawing her to pay
the bill in cash.3

Citibank thus filed its Answer with Compulsory


Counterclaim.13 After an exchange of pleadings reply,
rejoinder and sur-rejoinder by the parties, and the issues
having been joined, the trial court set the case for pre-trial
conference14 on May 5, 2003 during which the spouses and
their counsel failed to appear, despite notice. On Citibanks
counsels motion, the trial court, by Order15 of even date,
dismissed the spouses Complaint and directed Citibank to
present evidence on its Compulsory Counterclaim.
The spouses moved for the reconsideration of the trial
courts May 5, 2003 Order, explaining that their failure to
attend the pre-trial conference was due to the negligence16 of
their counsel who "failed to inform [them] about [the pre-trial]
and include the same in his calendar because . . . the pretrial was still far away."
The spouses motion for reconsideration was denied by
Order of September 17, 2003.17 In the same Order, the trial
court directed Citibank to present evidence on its
Counterclaim within 30 days from receipt thereof. Citibank
received copy of this Order on September 29, 200318 and,
therefore, had up to October 29, 2003 to present evidence
on its Counterclaim.
The spouses assailed the trial courts Order dismissing their
Complaint via petition for certiorari before the Court of
Appeals, docketed as CA-G.R. SP No. 80095. During the

CIVIL PROCEDURE (Atty. Catherine Guerzo-Barrion) 2


3RD EXAM COVERAGE CASE ASSIGNMENT
pendency of this petition or on January 5, 2004, Citibank
filed before the trial court a motion to defer the presentation
of evidence on its Counterclaim in view of the pendency of
said petition of the spouses before the appellate court. The
trial court did not act on Citibanks motion, however, as it
bore no notice of hearing.19
Citibank re-filed on January 30, 2004 the motion to defer, this
time containing a notice of hearing.20 The trial court
thereupon set the motion for hearing on February 13, 2004
during which only Azucena appeared. The motion was
denied for lack of merit by Order of February 13, 2004.21
Citibank having failed to present evidence within 30 days
from its receipt22 on September 29, 2003 of the trial courts
Order of September 17, 2003, the trial court dismissed its
Counterclaim by Order of June 30, 2005.23 Its motion for
reconsideration of this June 30, 2005 Order having been
denied, Citibank went on certiorari to the Court of Appeals,
docketed as CA G.R. CV No. 86401.
In the meantime or on May 25, 2006, the appellate court, by
Decision of even date in CA-G.R. SP No. 80095, set aside
the trial courts September 17, 2003 Order 24 allowing
Citibank to present evidence ex parte on its Counterclaim,
but upheld the dismissal of the spouses Complaint, it holding
that they should have filed an appeal, instead of a petition for
certiorari, as the trial courts order dismissing their complaint
was a final decision on the merits. At all events, it
underscored that:
[the spouses] did not come forward with the most persuasive
of reasons for the relaxation of the rules. We cannot consider
the following excuses to be valid and justifiable: 1) the failure
to note down the date of pre-trial was because the date of
resetting was three months away; 2) the [spouses] counsel
was beset with heavy case load and conflict of schedule; 3)
the instant case was a personal case of [spouses] counsel
and not one of the cases assigned by the office where he
worked which was the reason why his secretary failed to
calendar the pre-trial; and 4) [spouses], being members of
the bar, were also busy with their own cases. (Underscoring
supplied)
The spouses and Citibank moved for reconsideration and
partial reconsideration, respectively, of the appellate courts
May 25, 2006 decision. By Resolution of November 30,
2006, the appellate court granted only Citibanks motion for
partial reconsideration, ultimately allowing it to prosecute its
Counterclaim. Thus the appellate court explained:25
Section 3, Rule 17 provides that if a complaint is dismissed
due to the fault of the plaintiff, such dismissal is "without
prejudice to the right of the defendant to prosecute his
counterclaim in the same or in a separate action. Under this
new innovation, the dismissal of the complaint due to the
fault of plaintiff does not necessarily carry with it the
dismissal of the counterclaim, compulsory or otherwise. In
fact, the dismissal of the complaint is without prejudice to the
right of defendants to prosecute the counterclaim. In this

case, the private respondent bank, after moving that the


case against it be dismissed for failure of the petitioners to
prosecute, properly moved that it be allowed to present
evidence ex-parte on its counterclaim. (Citations omitted;
emphasis and underscoring supplied)
The spouses motion for reconsideration of the appellate
courts Resolution of November 30, 2006 upholding the
dismissal of their Complaint having been denied, they filed a
petition for review before this Court, docketed as G.R. No.
175677, the first petition subject of this Decision.
In the meantime, the appellate court, by Decision of
September 27, 2006 in CA-G.R. CV No. 86401, affirmed the
trial courts June 30, 2005 Order dismissing Citibanks
Counterclaim, drawing Citibank to file a petition for review
before this Court, G.R. No. 177133, the other petition subject
of this Decision.
By Resolution of June 6, 2007, the Court denied Citibanks
petition for review in G.R. No. 177133 for failure to
sufficiently show that the appellate court had committed any
reversible error in dismissing its Counterclaim.26 Citibank
filed a Motion for Reconsideration during the pendency of
which the Court resolved to consolidate G.R. No. 177133
with G.R. No. 175677.27
RE G.R. NO. 175677: The spouses assert that their nonappearance at the pre-trial may be excused if there is a valid
cause such as when a party forgets the date of the pre-trial;
that the merits of their case should have been considered
when their Complaint was dismissed; that Sections 4 and 5
of Rule 18 on pre-trial and Section 3 of Rule 17 on dismissal
due to the fault of the plaintiff provide for different and distinct
sanctions, citing Pinga v. Heirs of German Santiago; and that
certiorari was their proper remedy before the appellate court
as the trial courts order was not in accord with Section 5 of
Rule 18 or even with Section 3 of Rule 17.28
The Court denies the spouses petition.
Section 529 of Rule 18 provides that the dismissal of an
action due to the plaintiffs failure to appear at the pre-trial
shall be with prejudice, unless otherwise ordered by the
court. In this case, the trial court deemed the plaintiffs-herein
spouses as non-suited and ordered the dismissal of their
Complaint. As the dismissal was a final order, the proper
remedy was to file an ordinary appeal and not a petition for
certiorari. The spouses petition for certiorari was thus
properly dismissed by the appellate court.
Procedural infirmities aside, this Court took a considered
look at the spouses excuse to justify their non-appearance
at the pre-trial but found nothing exceptional to warrant a
reversal of the lower courts disposition thereof.
Counsel for the spouses admit having failed to inform his
clients of the scheduled pre-trial because he forgot to note
the same in his calendar and eventually forgot about it due to
"heavy workload." The spouses eventually admitted too

CIVIL PROCEDURE (Atty. Catherine Guerzo-Barrion) 3


3RD EXAM COVERAGE CASE ASSIGNMENT
having received the notice of pre-trial.30 Azucena, who is a
lawyer herself, advanced the reason that she forgot about
the scheduled pre-trial owing to her then forthcoming
retirement at the Office of the Solicitor General to thus press
her to accomplish her assigned work including winding up all
administrative matters in the office prior to her leaving.
While Section 431 of Rule 18 of the Rules of Court allows as
an exception a valid cause for the non-appearance of a party
at the pre-trial, the instances cited by the spouses and their
counsel hardly constitute compelling exigencies or situations
which warrant occasional flexibility of litigation rules.
In Quelnan v. VHF Philippines32 where the counsel for the
therein petitioner failed to calendar a scheduled pre-trial in
his diary, the Court held that:

of Rule 17 which section, for convenience, is again quoted,36


viz:
SEC. 3. Dismissal due to fault of plaintiff. If, for no
justifiable cause, the plaintiff fails to appear on the date of
the presentation of his evidence in chief on the complaint, or
to prosecute his action for an unreasonable length of time, or
to comply with these Rules or any order of the court, the
complaint may be dismissed upon motion of the defendant or
upon the courts own motion, without prejudice to the right of
the defendant to prosecute his counterclaim in the same or
in a separate action. This dismissal shall have the effect of
an adjudication upon the merits, unless otherwise declared
by the court. (Emphasis and underscoring supplied),
explained:
xxxx

The alleged failure of petitioners counsel to record the


scheduled pre-trial in his 1997 diary to justify his absence at
the pre-trial cannot amount to excusable negligence. To
constitute excusable negligence, the absence must be due
to petitioners counsels failure to take the proper steps at the
proper time, not in consequence of his carelessness,
inattention or willful disregard of the process of the court, but
in consequence of some unexpected or unavoidable
hindrance or accident. (Underscoring in the original)
Petitioners counsels failure to record the date of pre-trial in
his 1997 diary reflects his carelessness, his failure to heed
his responsibility of not neglecting a legal matter entrusted to
him, especially given the fact that he was given a Special
Power of Attorney to represent petitioner in the pre-trial and
trial of the case and that the repeated resettings of the pretrial for a period of 1 year and more than 10 months had
unduly prolonged the disposition of petitioners complaint
which was filed in 1994 yet.
Petitioners counsel must know that pre-trial is mandatory.
Being mandatory, the trial court has discretion to declare a
party non-suited. Absent a showing of grave abuse in the
trial courts exercise thereof, as in the case at bar, appellate
courts will not interfere.33 (Citations omitted; underscoring
and emphasis supplied)
As for the spouses assertion that Section 5 of Rule 18 "does
not give the defendant [Citibank in this case] the alternative
remedy of prosecuting its Counterclaim, whether compulsory
or permissive, in the same or separate action because there
is no longer any pending action where he can prosecute his
claim," consideration thereof has been rendered
unnecessary by, as will be dealt with shortly, this Courts
denial of Citibanks motion for reconsideration of the
dismissal of its herein petition. Suffice it to state that the
spouses view, apparently established in BA Finance v. Co, 34
had long been abandoned by the Court.
In the 2006 case of Pinga v. Heirs of German Santiago,35 the
Court, after noting the observations of Justice Florenz
Regalado in his separate opinion in BA Finance on Section 3

Section 3, [of Rule 17] on the other hand, contemplates a


dismissal not procured by plaintiff, albeit justified by causes
imputable to him and which, in the present case, was
petitioners failure to appear at the pre-trial. This situation is
also covered by Section 3, as extended by judicial
interpretation, and is ordered upon motion of defendant or
motu proprio by the court. Here, the issue of whether
defendant has a pending counterclaim, permissive or
compulsory is not of determinative significance. The
dismissal of plaintiffs complaint is evidently a confirmation of
the failure of evidence to prove his cause of action outlined
therein, hence the dismissal is considered, as a matter of
evidence, an adjudication on the merits. This does not,
however, mean that there is likewise such an absence of
evidence to prove defendants counterclaim although the
same arises out of the subject matter of the complaint which
was merely terminated for lack of proof. To hold otherwise
would not only work injustice to defendant but would be
reading a further provision into Section 3 and wresting a
meaning therefrom although neither exists even by mere
implication. x x x x. (Emphasis and italics in the original;
underscoring supplied)37
Besides, Section 5 of Rule 18 which is, for convenience,
again requoted,38 provides:
SEC. 5. Effect of failure to appear. The failure of the
plaintiff to appear [at the pre-trial] when so required pursuant
to the next preceding section shall be cause for dismissal of
the action. The dismissal shall be with prejudice, unless
otherwise ordered by the court. A similar failure on the part of
the defendant shall be cause to allow the plaintiff to present
his evidence ex parte and the court to render judgment on
the basis thereof., must be read in conjunction with the
above-quoted Section 3 of Rule 17.
Thus, in Perkin Elmer Singapore v. Dakila Trading, 39 the
Court, discussing the application of the dictum in Pinga to
situations outside of Section 3 of Rule 17, held:
It is true that the aforesaid declaration of the Court refers to
instances covered by Section 3, Rule 17 of the 1997 Revised

CIVIL PROCEDURE (Atty. Catherine Guerzo-Barrion) 4


3RD EXAM COVERAGE CASE ASSIGNMENT
Rules of Civil Procedure on dismissal of the complaint due to
fault of the plaintiff. Nonetheless, it does not also preclude
the application of the same to the instant case just because
the dismissal of respondents [plaintiffs] Complaint was upon
the instance of the petitioner[-defendant] who correctly
argued lack of jurisdiction over its person.40
As the failure of the spouses to appear at the pre-trial
amounted to a failure to comply with the Rules or any order
of the court, the dismissal of their Complaint was essentially
due to their fault and the therein defendant Citibank could
still prosecute its Counterclaim in the same or in a separate
action.
RE G.R. NO. 177133: As stated early on, this Court, by
Resolution of November 30, 2006, denied Citibanks petition
for review from the appellate courts September 27, 2006
Decision in CA-G.R. CV No. 86401, drawing it to file a
motion for reconsideration now the subject of consideration.
In its Decision41 of September 27, 2006, the appellate court
affirmed the trial courts Orders dated June 30, 2005 and
January 13, 2006 dismissing Citibanks Counterclaim. In
affirming the trial courts dismissal Orders, the appellate
court ratiocinated:
The pending petition with the Court of Appeals does not
automatically suspend the proceedings in the lower court.
Under Section 7, Rule 65 of the 1997 Rules of Civil
Procedure it provides that unless a temporary restraining
order or writ of preliminary injunction was issued, the
proceedings of the principal case is never suspended.
xxxx
Citibank already knew of the denial [by Order of February 13,
2004] of its request for the deferment of its presentation of
evidence pending the spouses Petition for Certiorari as early
as February 23, 2004. It should have proceeded in
prosecuting its compulsory counterclaim, but despite that
Citibank never presented evidence on its counterclaim. It
never sought a reconsideration of the Order dated February
13, 2004, denying Citibanks ex parte Motion to present
evidence. It was only on August 4, 2005 when Citibank filed
a Motion for Reconsideration. Indeed, it is too late to ask for
a reconsideration of an Order that had long become final.
(Emphasis and underscoring supplied)
Citibank contends that the appellate court issued two
conflicting decisions in CA G.R. SP No. 80095 (the subject of
G.R. No. 175677) and CA G.R. CV No. 86401 (the subject of
G.R. No. 177133) where "one ruling hold[s] that [Citibank]
can prosecute its counterclaims and another ruling hold[s]
that it cannot prosecute the same counterclaims;"42 that the
trial courts order for it to present evidence on its
Counterclaim "did not acquire finality for being an incomplete
order as it failed to provide the period within which the ex
parte presentation . . . should be completed;" 43 that the trial
court erred in denying its motion to defer the presentation of
evidence on its Counterclaim for lack of notice of hearing
considering that a hearing on an ex parte motion is not

required;44 and that the motion for deferment was filed out of
deference to the appellate court where the spouses petition
involving the same parties was then still pending.45
The Court denies Citibanks Motion for Reconsideration.
To be sure, there is no conflict in the appellate courts rulings
in CA G.R. SP No. 80095 and CA G.R. CV No. 86401. The
appellate court ruled in CA G.R. SP No. 80095 that Citibank
could still prosecute its Counterclaim, while it ruled in CA
G.R. CV No. 86401 that Citibanks right to present evidence
thereon had lapsed, hence, it denied Citibanks motion to
defer and dismissed its Counterclaim.
Complementary as they are, the appellate courts rulings
essentially resolved that Citibank could present evidence on
its Counterclaim but within the 30-day period, as mandated
by the trial court.
The trial courts Order of September 17, 2003, which
reiterated its earlier May 5, 2003 Order, is not an incomplete
order as it is clear that Citibank was "allowed to present its
evidence [ex parte] on its counterclaim within the 30-day
period provided therein reckoned anew from the date of
receipt hereof." The Order plainly mentioned the allowable
period when Citibank was to present its evidence. As to
when the ex parte presentation of evidence would terminate,
the branch clerk of court, as the commissioner in such a
proceeding,46 has discretion thereon.
It bears noting that Citibank never attempted to present even
just initial evidence within the 30-day period ordered by the
trial court, despite receipt of such Order on September 29,
2003. It thereafter belatedly filed a motion to defer
presentation of evidence on January 5, 2004, or more than
two months after the expiration of the 30-day period. The
clerk of court, via Commissioners Report of October 20,
2003, even pointed out Citibanks failure to present
evidence.lawph!l
It bears noting furthermore that Citibank did not seek
reconsideration of the trial courts Order of February 13,
2004 denying its ex parte motion to present evidence, and it
was only after more than five months or on August 4, 2005
when it, again, belatedly filed a motion for reconsideration of
the June 30, 2005 Order dismissing its Counterclaim.
As for Citibanks faulting the trial court for denying its motion
for deferment for lack of notice of hearing, it does not lie,
given that Citibank re-filed the same motion, this time with
the requisite notice of hearing. Clearly, it is estopped from
raising this issue.
AT ALL EVENTS, the appellate court was correct in its
finding that the trial court did not commit any reversible error
in proceeding with the case as no restraining order or
injunction was issued in CA G.R. SP No. 80095. Section 7 of
Rule 65 of the Rules of Court, as amended, provides that a
petition for certiorari shall not interrupt the course of the

CIVIL PROCEDURE (Atty. Catherine Guerzo-Barrion) 5


3RD EXAM COVERAGE CASE ASSIGNMENT
principal case unless the public respondent is enjoined from
further proceeding with the case.47
WHEREFORE, the petition for review in G.R. No. 175677 is
DENIED for lack of merit.
Petitioners motion for reconsideration in G.R. No. 177133 is
DENIED for lack of merit.
Costs against petitioners in both petitions.
SO ORDERED.
RULE 26
SPS. VILLUGA v. KELLY HARDWARE
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 176570

July 18, 2012

SPOUSES RAMON VILLUGA and MERCEDITA VILLUGA,


Petitioners,
vs.
KELLY HARDWARE AND CONSTRUCTION SUPPLY INC.,
represented by ERNESTO V. YU, Executive VicePresident and General Manager, Respondent.

DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari under
Rule 45 of the Rules of Court seeking to reverse and set
aside the Decision1 and Resolution2 dated November 30,
2006 and February 8, 2007 of the Court of Appeals (CA) in
CA-G.R. CV No. 69001. The CA Decision affirmed the
Orders of the Regional Trial Court (RTC) of Bacoor, Cavite,
Branch 89, dated September 28, 1998 and May 6, 1999,
while theCA Resolution denied petitioners' Motion for
Reconsideration.
The factual and procedural antecedents of the case are as
follows:
On March 3, 1995, herein respondent filed with the RTC of
Bacoor, Cavite a Complaint for a Sum of Money and
Damages against herein petitioners alleging as follows:
xxxx

(3) During the period of November 19, 1992 to January 5,


1993, defendants [herein petitioners] made purchases of
various construction materials from plaintiff corporation
[herein respondent] in the sum of P259,809.50, which has
not been paid up to the present time, both principal and
stipulated interests due thereon.
(4) Plaintiff made several demands, oral and written, for the
same defendants to pay all their obligations due plaintiff
herein, but defendants fail and refuse to comply with, despite
demands made upon them, to the damage and prejudice of
plaintiff.
xxxx
WHEREFORE, premises considered, it is most respectfully
prayed of this Honorable Court that judgment be rendered in
favor of plaintiff and against defendants by ordering
defendants to pay the sum of:
(1) P259,809.50 as principal obligation due plaintiff, plus
interest due thereon at 14% interest per annum, until all
sums due are paid in full.
(2) P64,952.38 by way of reimbursements of attorney's fees
plus P500.00 appearance fee in court.
(3) P26,000.00 for litigation and other related expenses.
And to pay the cost of suit.3
In their Answer to Complaint,4 petitioners admitted having
made purchases from respondent, but alleged that they do
not remember the exact amount thereof as no copy of the
documents evidencing the purchases were attached to the
complaint. Petitioners, nonetheless, claimed that they have
made payments to the respondent on March 4, 1994 and
August 9, 1994 in the amounts of P110,301.80 and
P20,000.00, respectively, and they are willing to pay the
balance of their indebtedness after deducting the payments
made and after verification of their account.
In a Manifestation5 dated July 18, 1995, petitioners stated
that in order to buy peace, they were willing to pay
respondent the principal sum of P259,809.50, but without
interests and costs, and on installment basis.
In its Counter Manifestation,6 respondent signified that it was
amenable to petitioners' offer to pay the principal amount of
P259,809.50. However, respondent insisted that petitioners
should also pay interests, as well as litigation expenses and
attorney's fees, and all incidental expenses.
Subsequently, on August 11, 1995, respondent filed a Motion
for Partial Judgment on the Pleadings 7 contending that
petitioners were deemed to have admitted in their Answer
that they owed respondent the amount of P259,809.50 when
they claimed that they made partial payments amounting to
P130,301.80. Based on this premise, respondent prayed that

CIVIL PROCEDURE (Atty. Catherine Guerzo-Barrion) 6


3RD EXAM COVERAGE CASE ASSIGNMENT
it be awarded the remaining balance of P129,507.70.
Petitioners filed their Opposition8 to the said Motion.
On September 11, 1995, the RTC issued an Order9 deferring
resolution of respondent's Motion for Partial Judgment on the
ground that there is no clear and specific admission on the
part of petitioners as to the actual amount that they owe
respondent.
On January 30, 1996, respondent filed an Amended
Complaint,10 with leave of court, alleging that between
October 1992 until January 5, 1993, petitioners purchased
from it (respondent) various construction materials and
supplies, the aggregate value of which is P279,809.50; that
only P20,000.00 had been paid leaving a balance of
P259,809.50.
In their Answer to Amended Complaint,11 petitioners
reiterated their allegations in their Answer to Complaint.
On March 8, 1996, respondent filed a Request for
Admission12 asking that petitioners admit the genuineness of
various documents, such as statements of accounts, delivery
receipts, invoices and demand letter attached thereto as well
as the truth of the allegations set forth therein.
Respondent basically asked petitioners to admit that the
latter's principal obligation is P279,809.50 and that only
P20,000.00 was paid.
On June 3, 1996, respondent filed a Manifestation and
Motion13 before the RTC praying that since petitioners failed
to timely file their comment to the Request for Admission,
they be considered to have admitted the genuineness of the
documents described in and exhibited with the said Request
as well as the truth of the matters of fact set forth therein, in
accordance with the Rules of Court.
On June 6, 1996, petitioners filed their Comments on the
Request for Admission14 stating their objections to the
admission of the documents attached to the Request.
On January 24, 1997, respondent filed its Second Amended
Complaint,15 again with leave of court. The amendment
modified the period covered by the complaint. Instead of
October 1992 to January 5, 1993, it was changed to July 29,
1992 until August 10, 1994. The amendment also confirmed
petitioners' partial payment in the sum of P110,301.80 but
alleged that this payment was applied to other obligations
which petitioners owe respondent. Respondent reiterated its
allegation that, despite petitioners' partial payment, the
principal amount which petitioners owe remains
P259,809.50.

On September 4, 1997, respondent filed a Motion to


Expunge with Motion for Summary Judgment 17 claiming that
petitioners' Comments on respondent's Request for
Admission is a mere scrap of paper as it was signed by
petitioners' counsel and not by petitioners themselves and
that it was filed beyond the period allowed by the Rules of
Court. Respondent goes on to assert that petitioners, in
effect, were deemed to have impliedly admitted the matters
subject of the said request. Respondent also contended that
it is already entitled to the issuance of a summary judgment
in its favor as petitioners not only failed to tender a genuine
issue as to any material fact but also did not raise any
special defenses, which could possibly relate to any factual
issue.
In their Opposition to Motion to Expunge with Motion for
Summary Judgment,18 petitioners argued that respondent's
request for admission is fatally defective, because it did not
indicate or specify a period within which to answer; that
verification by petitioners' counsel is sufficient compliance
with the Rules of Court; that petitioners' request for
admission should be deemed dispensed with and no longer
taken into account as it only relates to the Amended
Complaint, which was already abandoned when the Second
Amended Complaint was filed; and that summary judgment
is improper and without legal basis, as there exists a genuine
controversy brought about by petitioners' specific denials and
defenses.
On September 28, 1998, the RTC issued an Order, the
dispositive portion of which reads as follows:
ACCORDINGLY, plaintiff's [herein respondent's] Motion to
Expunge with Motion for Summary Judgment is hereby
GRANTED.
Defendants' Petitioners "Comments on the Request for
Admission" dated 04 June 1996 is hereby expunged from the
record for being contrary to the Rules of Court. Judgment is
hereby rendered in favor of the plaintiff and against the
defendants as follows:
Defendants are hereby ordered to pay, jointly and severally,
plaintiff the sum of TWO HUNDRED FIFTY-NINE
[THOUSAND] EIGHT HUNDRED NINE PESOS and 50/100
(P259,809.50), with legal interest due thereon until the whole
amount is paid.
SO ORDERED.19
Petitioners filed a Motion for Reconsideration, but it was
denied by the RTC in its Order dated May 6, 1999.
Unyielding, petitioners filed an appeal with the CA.

Petitioners filed their Answer to the Second Amended


Complaint16 denying the allegations therein and insisting that
they have made partial payments.

On November 30, 2006, the CA rendered its presently


assailed Decision, affirming the September 28, 1998 and
May 6, 1999 Orders of the RTC.

CIVIL PROCEDURE (Atty. Catherine Guerzo-Barrion) 7


3RD EXAM COVERAGE CASE ASSIGNMENT
Petitioners' Motion for Reconsideration was subsequently
denied by the CA via its Resolution dated February 8, 2007.
Hence, the instant petition for review on certiorari raising the
following issues:
THE HONORABLE COURT SHOULD NOT HAVE DENIED
DEFENDANTS-APPELLANTS' (PETITIONERS) COMMENT
AND RULED THAT THERE WAS IMPLIED ADMISSION
CONTAINED IN THE REQUEST.
THERE SHOULD NOT HAVE BEEN A SUMMARY
JUDGMENT
AGAINST
DEFENDANTSAPPELLANTS
(PETITIONERS).20
In their first assigned error, petitioners insist in arguing that
respondent waived its Request for Admission when it filed its
Second Amended Complaint; that all motions or requests
based on the complaint, which was amended, should no
longer be considered. Petitioners also contend that the
Request for Admission was not in the form specified by the
Rules of Court as it did not specify a period within which to
reply as required by Section 1, Rule 26 of the same Rules.
As to the second assignment of error, petitioners aver that
the summary judgment issued by the RTC is improper and
without legal bases, considering that genuine issues were
raised in the pleadings filed by petitioners.
The petition lacks merit.
The Court agrees with the CA in holding that respondent's
Second Amended Complaint supersedes only its Amended
Complaint and nothing more.
Section 8, Rule 10 of the Rules of Court provides:
Sec. 8. Effect of amended pleading. An amended pleading
supersedes the pleading that it amends. However,
admissions in superseded pleadings may be received in
evidence against the pleader; and claims or defenses
alleged therein not incorporated in the amended pleading
shall be deemed waived.
From the foregoing, it is clear that respondent's Request for
Admission is not deemed abandoned or withdrawn by the
filing of the Second Amended Complaint.
The Court also finds no error when the CA ruled that
petitioners' Comments on the Request for Admission was
filed out of time, and quotes with approval the disquisition of
the appellate court on this matter, to wit:
x x x Pursuant to the above-quoted Section 2 of Rule 26 of
the Rules of Court, the party to whom the request is directed
must respond to the request within a period of not less than
ten (10) days after the service thereof, or upon such further
time the Court may allow on motion. In the instant case, the
plaintiff-appellee's herein respondent's "Request" failed to

designate any period for the filing of the defendantsappellants' herein petitioners' response. Neither did the trial
court fix the period for the same upon motion of the parties.
However, such failure to designate does not automatically
mean that the filing or the service of an answer or comment
to the "Request" would be left to the whims and caprices of
defendants-appellants. It must be reiterated that one of the
main objectives of Rule 26 is to expedite the trial of the case
(Duque vs. Court of Appeals, 383,
SCRA 520, 527 2002 ). Thus, it is also provided in the second
paragraph of Section 2 of Rule 26 of the Rules of Court that
"[o]bjections on the ground of irrelevancy or impropriety of
the matter requested shall be promptly submitted to the court
for resolution."21
Nonetheless, the Court takes exception to the ruling of the
CA that by reason of the belated filing of petitioners'
Comments on the Request for Admission, they are deemed
to have impliedly admitted that they are indebted to
respondent in the amount of P259,809.50.
A careful examination of the said Request for Admission
shows that the matters of fact set forth therein are simply a
reiteration of respondent's main allegation in its Amended
Complaint and that petitioners had already set up the
affirmative defense of partial payment with respect to the
above allegation in their previous pleadings.
This Court has ruled that if the factual allegations in the
complaint are the very same allegations set forth in the
request for admission and have already been specifically
denied, the required party cannot be compelled to deny them
anew.22 A request for admission that merely reiterates the
allegations in an earlier pleading is inappropriate under Rule
26 of the Rules of Court, which as a mode of discovery,
contemplates of interrogatories that would clarify and tend to
shed light on the truth or falsity of the allegations in the
pleading.23 Rule 26 does not refer to a mere reiteration of
what has already been alleged in the pleadings.24
Nonetheless, consistent with the abovementioned Rule, the
party being requested should file an objection to the effect
that the request for admission is improper and that there is
no longer any need to deny anew the allegations contained
therein considering that these matters have already been
previously denied.
The foregoing notwithstanding, the Court finds that the CA
was correct in sustaining the summary judgment rendered by
the RTC.1wphi1
Sections 1 and 3, Rule 35 of the Rules of Court provide as
follows:
Section 1. Summary judgment for claimant. A party seeking
to recover upon a claim, counterclaim, or cross-claim or to
obtain a declaratory relief may, at any time after the pleading
in answer thereto has been served, move with supporting
affidavits, depositions or admissions for a summary judgment
in his favor upon all or any part thereof.

CIVIL PROCEDURE (Atty. Catherine Guerzo-Barrion) 8


3RD EXAM COVERAGE CASE ASSIGNMENT
Section 3. Motion and proceedings thereon. The motion
shall be served at least ten (10) days before the time
specified for the hearing. The adverse party may serve
opposing affidavits, depositions, or admissions at least three
(3) days before the hearing. After the hearing, the judgment
sought shall be rendered forthwith if the pleadings,
supporting affidavits, depositions, and admissions on file,
show that, except as to the amount of damages, there is no
genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law.
Summary judgment is a procedural device resorted to in
order to avoid long drawn out litigations and useless
delays.25 Such judgment is generally based on the facts
proven summarily by affidavits, depositions, pleadings, or
admissions of the parties.26
In this respect, the Court's ruling in Nocom v. Camerino, 27 is
instructive, to wit:
x x x When the pleadings on file show that there are no
genuine issues of fact to be tried, the Rules of Court allow a
party to obtain immediate relief by way of summary
judgment, that is, when the facts are not in dispute, the court
is allowed to decide the case summarily by applying the law
to the material facts. Conversely, where the pleadings tender
a genuine issue, summary judgment is not proper. A
"genuine issue" is such issue of fact which requires the
presentation of evidence as distinguished from a sham,
fictitious, contrived or false claim. Section 3 of [Rule 35 of the
Rules of Court] provides two (2) requisites for summary
judgment to be proper: (1) there must be no genuine issue
as to any material fact, except for the amount of damages;
and (2) the party presenting the motion for summary
judgment must be entitled to a judgment as a matter of law. A
summary judgment is permitted only if there is no genuine
issue as to any material fact and a moving party is entitled to
a judgment as a matter of law. A summary judgment is
proper if, while the pleadings on their face appear to raise
issues, the affidavits, depositions, and admissions presented
by the moving party show that such issues are not genuine.28
In the present case, it bears to note that in its original
Complaint, as well as in its Amended Complaint, respondent
did not allege as to how petitioners' partial payments of
P110,301.80 and P20,000.00 were applied to the latter's
obligations. In fact, there is no allegation or admission
whatsoever in the said Complaint and Amended Complaint
that such partial payments were made. Petitioners, on the
other hand, were consistent in raising their affirmative

defense of partial payment in their Answer to the Complaint


and Answer to Amended Complaint. Having pleaded a valid
defense, petitioners, at this point, were deemed to have
raised genuine issues of fact.
The situation became different, however, when respondent
subsequently filed its Second Amended Complaint admitting
therein that petitioners, indeed, made partial payments of
P110,301.80 and P20,000.00. Nonetheless, respondent
accounted for such payments by alleging that these were
applied to petitioners' obligations which are separate and
distinct from the sum of P259,809.50 being sought in the
complaint. This allegation was not refuted by petitioners in
their Answer to Second Amended Complaint. Rather, they
simply insisted on their defense of partial payment while
claiming lack of knowledge or information to form a belief as
to the truth of respondent's allegation that they still owe the
amount of P259,809.50 despite their payments of
P110,301.80 and P20,000.00. It is settled 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 defendants knowledge that his averment of ignorance
must be palpably untrue.29 In the instant case, it is difficult to
believe that petitioners do not know how their payment was
applied. Instead of denying knowledge, petitioners could
have easily asserted that their payments of P110,301.80 and
P20,000.00 were applied to, and should have been deducted
from, the sum sought to be recovered by respondent, but
they did not, leading the court to no other conclusion than
that these payments were indeed applied to their other debts
to respondent leaving an outstanding obligation of
P259,809.50.
On the basis of the foregoing, petitioners' defense of partial
payment in their Answer to Second Amended Complaint, in
effect, no longer raised genuine issues of fact that require
presentation of evidence in a full-blown trial. Hence, the
summary judgment of the RTC in favor of respondent is
proper.
WHEREFORE, the instant petition Is DENIED. The assailed
Decision and Resolution of the Court of Appeals are
AFFIRMED.
SO ORDERED.