Gaw v. Court of Appeals
REITERATIONFacts
The Antecedents: This case originated from a complaint for sums of money with damages and preliminary attachment filed by Worldwide Philippines Marketing Corporation (WPMC) against Joaquin S. Gaw. WPMC alleged that Gaw, taking advantage of his business relationship with their General Manager, caused to be encashed several personal and postdated checks totaling P315,332.00 between August 1980 and February 1981. Gaw, in his answer, denied liability for most of the checks, specifically stating that one P100,000.00 check was not his and that he had paid a P40,000.00 check which represented a loan he had already settled. Procedural History: The case began in the Court of First Instance of Manila, Branch XI, as Civil Case No. 137703. WPMC filed a motion for partial judgment on the pleadings, asserting that Gaw's answer failed to tender an issue and admitted the genuineness of the checks due to a lack of specific denial under oath. Gaw opposed this, arguing that the complaint did not allege his signature on the checks, thus negating the need for a sworn denial, and that payment was a defense for the P40,000.00 check. The trial court initially held the motion in abeyance, then granted a partial judgment for P140,000.00, later modifying it to P100,000.00 after a motion for reconsideration. Despite the cancellation of the pre-trial hearing due to unresolved issues, the court declared the partial judgment final and executory, issuing a writ of execution. Gaw then filed a petition for certiorari with preliminary injunction with the Court of Appeals, which dismissed his petition, ruling that appeal was the proper remedy. Gaw's motion for reconsideration was denied, leading to the present petition. The Petition: Joaquin S. Gaw filed this petition for certiorari with writ of preliminary injunction with the Supreme Court, seeking to reverse the Court of Appeals' decision and resolution. He argues that the Court of Appeals erred in ruling that appeal, rather than certiorari, was the proper remedy. Gaw contends that the trial court committed grave abuse of discretion and acted in excess of jurisdiction by rendering a partial judgment on the pleadings without a hearing, despite the existence of genuine issues regarding the genuineness and execution of the checks, and without proper allegations in the complaint that the checks bore his signature. He asserts that his answer did tender an issue and contested the allegations, and that he was not obligated to provide a sworn denial for checks not alleged to be his. The Supreme Court found merit in the petition, agreeing that the partial judgment was a denial of due process and thus null and void.
Issue(s)
Whether the Court of Appeals committed grave abuse of discretion in dismissing the petition for certiorari, holding that appeal was the proper remedy. Whether the trial court erred in rendering a partial judgment on the pleadings despite the existence of issues not yet joined and factual allegations contested by the defendant, thereby denying due process.
Ruling
The Supreme Court reversed and set aside the decision and resolution of the Court of Appeals, remanding the case to the lower court for further proceedings.
Ratio Decidendi
On the propriety of certiorari over appeal: The Court held that the Court of Appeals erred in ruling that appeal, and not certiorari, was the proper remedy. The Court reiterated its ruling in Marina v. Eastern Quezon College and Co Chuan Seng v. C.A. that certiorari is available even if appeal exists, when the lower court's exercise of authority is oppressive, amounts to excess of jurisdiction, or grave abuse of discretion. In this case, the rendition of a partial judgment on the pleadings without a hearing, when issues had not yet been joined, was deemed to be such an exercise of judicial authority. On the propriety of judgment on the pleadings and denial of due process: The Court found that the trial court erred in rendering a judgment on the pleadings. Section 1, Rule 19 of the Rules of Court allows judgment on the pleadings only where the answer fails to tender an issue or admits the material allegations. Here, Gaw's answer clearly contested the material allegations regarding the P100,000.00 check, stating it was not his and he had not drawn it. This tendered an issue that required a hearing for determination. The Court clarified that while Section 8, Rule 8 of the Rules of Court provides for implied admission due to failure to make a sworn specific denial, this rule has exceptions. One such exception, applicable here, is when the adverse party does not appear to be a party to the instrument, as held in Lim Chingco v. Terariray. Since the complaint did not allege that the P100,000.00 check was drawn by Gaw or that the signature belonged to him, he was under no obligation to specifically deny its genuineness and due execution under oath. The Court concluded that the partial judgment, rendered without allowing parties to present evidence on contested factual issues, was a clear denial of due process. Such a judgment is null and void and does not gain finality, making it a proper subject for a writ of certiorari. The trial court should not have ruled on the strength of the plaintiff's allegations alone while disregarding the defendant's expressed denial.
Main Doctrine
A partial judgment on the pleadings rendered without a hearing, especially when issues have not been joined and the defendant's answer contests material allegations, constitutes a denial of due process and is a proper subject for a writ of certiorari, as appeal is not the adequate remedy in such cases.