[SUBJECT] | [TOPIC] 1

[Digest maker]

MONGAO VS PRYCE PROPERTIES CORPORATION

[GR NO.156474] | [AUG 16,2005] | [TINGA, J.]

CASE SUMMARY Must be recit ready. Important facts and ruling of the court plus
basis
MONGAO and PRYCE executed a MOA in which the former was to sell land to the
latter. After a considerable delay, there was unpaid balance from the sale of land
between the two. Despite Pryce offering to pay (albeit late), MONGAO rejected and
filed a complaint for rescission and damages, claiming PRYCE continuously refused to
heed MONGAOs demands to pay the balance, and that no actual transfer on the deed
of absolute sale in the name of PRYCE. PRYCE admitted the execution of the MOA but
argued it did not pay the same solely to MONGAO but rather to DBP to redeem certain
properties. MONGAO ruled for judgement on the pleadings arguing that PRYCE
admitted the allegations in the complaint. RTC Granted, but the CA Reversed since
there were actual issued allegedly raised in the answer requiring presentation of
evidence. SC found that indeed a judgement on the pleadings was proper since
PRYCEs answer admitted that there was a perfected contract of sale between it and
MONGAO and that PRYCE refused to tender payment of the purchase price solely to
MONGAO. From the allegations admitted alone, rescission of contract would be viable.

FACTS bullet points

MONGAO filed a complaint for rescission and damages against PRYCE. It
alleged that:
o She and PRYCE executed a MOA wherein the former agreed to sell to the
latter a land.
o PRYCE paid P550,000 as earnest money. But after considerable delay,
PRYCE offered to pay the balance by issuing a check payable to MONGAO
and her mother Nellie Animas, which MONGAO rejected.
o PRYCE continuously refused to heed MONGAOs written and oral demands
to pay the balance solely to MONGAO.
o No Deed of Absolute Sale was between the parties which allegedly
transferred the land in the name of PRYCE.
In its answer, Pryce said that the land belonged to MONGAOs parents but was
registered in her name as a trustee. Though it admitted the execution of MOA
but qualified that it did not pay the earnest money directly and solely to
MONGAO. And that the earnest money was paid to DBP in order to redeem
certain properties of the Animas family. Mongao and her father simultaneously
executed the DAS and MOA after PRYCE delivered the checks to DBP.
MONGAO moved for judgment on the pleadings on the ground that the Answer
admitted the material allegations of the complaint, and therefore, failed to
tender an issue. The Answer admitted the existence of the contract of sale and
PRYCEs refusal to satisfy the unpaid balance of the purchase price despite
demand.
RTC Granted, while CA Reversed and remanded the case for trial on the merits.
CA held that there were actual issues raised in the Answer requiring the
presentation of evidence: (1) genuineness of the DAS; (2) nature of MONGAOs
title to the property.

ISSUE state all issues first. Bold the one related to the subject
1. WON judgement on the pleadings was proper? YES
2. WON there was consignation in the current case? NO.
RATIO Bold important words or phrases
1. WON judgement on the pleadings was proper? YES. PRYCEs answer
admitted that there was a perfected contract of sale between it and
MONGAO and that PRYCE refused to tender payment of the purchase
price solely to MONGAO. These admissions clearly make out a case for
rescission of contract.
a. Section 1, Rule 19 provides that where an answer fails to tender an issue,
or otherwise admits the material allegations of the adverse partys
pleading, the court may, on motion of that part, direct judgment on such
pleading.
b. If an answer does in fact specifically deny the material averments of the
complaint in the manner indicated by Section 10, and/or asserts
affirmative defenses, a judgment on the pleadings would naturally NOT be
proper.
c. There is joinder of issues when the answer makes a specific denial of the
material allegations in the complaint or asserts affirmative defense which
could bar recovery by the plaintiff. Where there is proper joinder of issues,
the TC is barred from rendering judgment only on the pleadings.
d. On the other hand, an answer fails to tender an issue where the
allegations admit the allegations in support of the plaintiffs cause of
action or fail to address the at all. In either case, there is no genuine issue
and judgment on the pleadings is proper.
e. Nothing in the allegations in PRYCEs answer makes out a proper joinder
of issues. MONGAOs cause of action for rescission is founded mainly on a
perfected contract of sale allegedly entered into between MONGAO and
PRYCE as embodied in the MOA. The allegations in PRYCEs answer do not
make out a specific denial that a contract of sale was perfected between
the parties. Also, PRYCE does not contest the due execution and/or
genuineness of said MOA.
f. PRYCE offered the affirmative defense that the separate demands of
MONGAO and the Animas family compelled it to issue the check payable
to both MONGAO and her mother. This implies an admission by PRYCE that
it effected payment contrary to the express terms of the contract of sale.
Nowhere in the terms of the MOA does it state that the payment of the
purchase price be tendered to any person other than MONGAO.
g. PRYCE likewise justifies its refusal to tender payment solely to MONGAO by
alleging that the latter was a mere trustee and not the beneficial owner of
the property subject of the sale and therefore not the proper party to
receive payment. Such defense cannot prevent MONGAO from seeking
rescission of the contract of sale. The express terms of the MOA, the
genuineness and the due execution of which are not denied, clearly show
that the contract of sale was executed only between MONGAO and PRYCE.
2. WON there was consignation in the current case? NO.
a. SC adopted TC ruling that mere consignment or deposit of the check to
the Clerk of Court without observing the mandatory provisions of Articles
1256 to 1257 of the New Civil Code, does not produce the effect of
payment in order that the obligor or the defendant herein shall be
released from the obligation, hence, no payment of the unpaid
balance had been made.
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[Digest maker]

b. PRYCE did not file any formal complaint for consignation but merely
deposited the check with the Clerk of Court. A formal complaint must be
commenced with the trial court to provide the proper venue for the
determination if there is a valid tender of payment.

DECISION bullet points. Dont copy and paste

Petition GRANTED
CA decision REVERSED