Santos v. Alcazar
REITERATIONFacts
The Antecedents: Respondent Lolita Alcazar, through her attorney-in-fact Delfin Chua, filed a complaint for sum of money against petitioners Spouses Fernando and Ma. Elena Santos for the collection of unpaid paint and construction materials amounting to ₱1,456,000.00. The cause of action was based on an "Acknowledgment" signed by petitioner Fernando T. Santos, acknowledging his obligation to Legazpi Color Center (LCC) in the said amount, with an alleged agreement for 3% monthly interest. Procedural History: The Regional Trial Court (RTC) initially issued an order declaring petitioners in default and rendering judgment in favor of the respondent. This was later set aside, and pre-trial was conducted. Petitioners filed a Demurrer to Evidence, which was denied. Petitioners subsequently failed to appear for scheduled hearings, leading the RTC to declare them as having waived their right to present evidence and submitting the case for decision. The RTC rendered a decision ordering the spouses to pay the respondent. Petitioners moved for reconsideration, arguing that the judgment should not bind Ma. Elena as she did not sign the Acknowledgment, and that the liability was not sufficiently proved due to lack of receipts. The RTC denied the motion. Petitioners appealed to the Court of Appeals (CA). The Petition: The CA, in its assailed decision, denied the appeal, holding that petitioners' admission of liability in their Answer, coupled with the Acknowledgment, was sufficient. The CA also affirmed the trial court's finding that petitioners waived their right to present evidence. The CA further ruled that petitioners' claim of a lesser liability of ₱600,000.00 was unsubstantiated. The CA denied petitioners' motion for reconsideration. Hence, the present petition for review on certiorari.
Issue(s)
Whether the Court of Appeals erred in not acting upon petitioners' argument that the Acknowledgment was inadmissible due to the presentation of a photocopy instead of the original, violating the Best Evidence Rule. Whether the Court of Appeals erred in its ruling regarding the necessity of receipts and statements of account, contradicting a previous ruling by the same division. Whether petitioners admitted in their Answer that they are indebted to the respondent in the amount of ₱1,456,000.00. Whether the Court of Appeals failed to rule on the absence of records of the pre-trial conference and should have considered the issue of presumptions, inferences, and misconceptions of facts used by the trial court. Whether petitioners were deprived of due process for not being duly notified of the November 8, 2005 hearing. Whether petitioners were deprived of their day in court when they were considered to have waived their right to present evidence.
Ruling
The Supreme Court denied the petition and affirmed the Court of Appeals' decision with modification. Petitioner Ma. Elena Santos was held liable only to the extent of ₱600,000.00, as admitted in their Answer, and not for the full amount of ₱1,456,000.00, as she was not a signatory to the Acknowledgment.
Ratio Decidendi
On the admissibility of the photocopy of the Acknowledgment and the Best Evidence Rule: The Court ruled that the failure to present the original copy of the Acknowledgment during the second taking of testimony was a mere procedural inadvertence that did not materially affect the outcome. The original was already part of the records. More importantly, petitioners failed to specifically deny under oath the genuineness and due execution of the Acknowledgment in their Answer. This failure is deemed an admission of its genuineness and due execution, dispensing with the need for proof of authenticity and contents, and waiving defenses such as forgery or lack of delivery. The rule on specific denial under oath applies only to parties to the document. On the necessity of receipts and statements of account: The Court found no irregularity in the CA's shift from requiring receipts and statements of account to not requiring them. This was due to the petitioners' admissions in their Answer, their failure to specifically deny under oath the Acknowledgment, and their waiver of the right to present evidence. These factors rendered the Acknowledgment, as the best evidence of the transactions and indebtedness, sufficient without further documentary proof. On petitioners' admission of indebtedness: The Court clarified that while petitioners admitted indebtedness in their Answer, they did not admit the specific amount of ₱1,456,000.00. However, their Answer did contain admissions of liability, and coupled with the Acknowledgment and the waiver of their right to present evidence, a prima facie case was established. On the pre-trial conference and absence of records: The Court found no merit in the claim that the pre-trial conference was a sham due to lack of records. It was evident that a pre-trial conference was held, petitioners' representative was present, and a pre-trial order was issued, which served as a record of the proceedings and specified the hearing dates. On the alleged lack of notice for the November 8, 2005 hearing: The Court found this claim to be without merit. The pre-trial order clearly specified the hearing dates, including November 8, 2005. Petitioners were aware of the hearing, and their failure to attend was not attributable to the trial court. On the waiver of the right to present evidence and denial of day in court: The Court affirmed the CA's ruling that petitioners were afforded ample opportunity to present their evidence but repeatedly caused continuances and failed to appear. The trial court's denial of the motion to reset the March 20, 2006 hearing and the declaration of waiver were proper exercises of discretion to prevent further delay. The grant or denial of a motion for postponement is a privilege, not a right, and petitioners' counsel should not have assumed the motion would be granted.
Main Doctrine
The failure to specifically deny under oath the genuineness and due execution of an instrument in the Answer results in the admission of its genuineness and due execution, dispensing with the need for proof of authenticity and contents, and waiving defenses such as forgery or lack of delivery. This rule, however, applies only to parties to the document.