Capitol Motors v. Yabut
REITERATIONFacts
The Antecedents: On March 1, 1966, Capitol Motors Corporations (plaintiff-appellee) filed a complaint against Nemesio I. Yabut (defendant-appellant). The complaint averred that on April 24, 1965, the defendant executed a promissory note for P30,134.25, payable in eighteen (18) equal monthly installments with 12% annual interest, the first installment due on June 10, 1965. The note stipulated that failure to pay two successive installments would render the principal sum immediately due and demandable, with an additional 25% for attorney's fees and costs. As of February 23, 1966, the unpaid balance, including accrued interest, was P30,754.79. The defendant allegedly defaulted on two successive installments and failed to pay the interest, and despite demands, refused to pay. Procedural History: The defendant, through counsel, filed an answer admitting paragraph 1 of the complaint and specifically denying paragraphs 2 through 7 for lack of knowledge sufficient to form a belief. The plaintiff filed a motion for judgment on the pleadings, arguing that the defendant's denial was insufficient and thus the material allegations were deemed admitted. The defendant did not oppose this motion. The trial court granted the motion, considering the case submitted on the pleadings, and subsequently rendered judgment in favor of the plaintiff. The Petition: The defendant-appellant appealed, contending that the trial court erred in considering his denial insufficient and in rendering judgment on the pleadings. He argued that his answer, using the third mode of specific denial (lack of knowledge or information), tendered an issue.
Issue(s)
Whether the defendant's answer, stating "lack of knowledge sufficient to form a belief" regarding material allegations, constitutes a specific denial sufficient to raise an issue. Whether the trial court erred in rendering a judgment on the pleadings.
Ruling
The Supreme Court affirmed the judgment of the trial court. The appeal was found to be without merit.
Ratio Decidendi
On the issue of whether the defendant's answer constitutes a specific denial sufficient to raise an issue: The Court held that a denial based on "lack of knowledge or information sufficient to form a belief" is not always sufficient to raise an issue. Citing Warner Barnes & Co., Ltd. vs. Reyes, et al., the Court stated that this mode of denial does not apply when the fact asserted as unknown is "so plainly and necessarily within the defendant's knowledge that his averment of ignorance must be palpably untrue." In this case, the promissory note was attached to the complaint, making its genuineness and execution facts plainly within the defendant's knowledge. Therefore, his averment of ignorance was deemed insufficient to raise an issue. The Court reiterated this doctrine in J. P. Juan & Sons, Inc. vs. Lianga Industries, Inc. and Sy-quia vs. Marsman, emphasizing that such pleas must be made with sincerity and good faith, not for confusion or delay. The Court also referenced National Marketing Corporation vs. De Castro, which held that a denial qualified by "no knowledge or information" is not specific and that material averments are deemed admitted when not specifically denied. On the issue of whether the trial court erred in rendering a judgment on the pleadings: The Court found that the defendant's denial was insufficient to raise an issue, leading to the admission of the material allegations in the complaint. Furthermore, the Court identified two additional reasons why the appeal must fail. First, the action was founded upon a written instrument attached to the complaint, and the defendant failed to deny its genuineness and due execution under oath, which, pursuant to Section 8, Rule 8 of the Revised Rules of Court, deemed the instrument admitted. This was supported by cases like Songo vs. Sellner and Philippine Commercial & Industrial Bank vs. ELRO Development Corporation. Second, the defendant-appellant did not oppose the plaintiff-appellee's motion for judgment on the pleadings, nor did he file a motion for reconsideration of the order submitting the case for decision or of the decision itself. Citing Santiago vs. Basilan Lumber Company, the Court held that by failing to object to the motion for judgment on the pleadings, the defendant practically assented to it, admitting the allegations of the complaint and obviating the need for the plaintiff to present evidence.
Main Doctrine
A denial based on 'lack of knowledge or information sufficient to form a belief' is insufficient to raise an issue when the facts alleged are plainly and necessarily within the defendant's knowledge, such as those pertaining to a written instrument attached to the complaint and executed by the defendant. Furthermore, failure to deny the genuineness and due execution of a written instrument under oath, and failure to oppose a motion for judgment on the pleadings, result in the admission of the material allegations of the complaint.