Facts:

The case involves Gregorio Apelario, doing business as "Gregorio Trading," as the plaintiff and appellee, against the defendants and appellants, Ines Chavez & Company, Ltd., and its general partner, Ines Chavez. The conflict stems from a complaint filed by Apelario on April 8, 1959, in the Court of First Instance of Manila. The complaint stated that on October 28, 1958, Ines Chavez & Company, Ltd. purchased ten sets of axle assemblies from Apelario for a total of ₱2,400. To settle this debt, on December 6, 1958, the defendants provided two postdated checks of ₱1,200 each drawn against the Philippine Bank of Commerce. When these checks were presented for payment, they were dishonored due to insufficient funds. The defendants subsequently retrieved these checks and replaced them with two additional checks for the same amount, which were also dishonored upon presentation. On February 23, 1959, after the defendants refused to pay, Apelario demanded cash payment whi

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Facts:

Parties and Transaction Background

• Plaintiff: Gregorio Apelario, doing business under the style "Gregorio Trading."
• Defendants:
• Ines Chavez & Company, Ltd., a limited partnership; and
• Ines Chavez, the general partner, doing business under the style "Fidelity Motor Supply Company, Ltd."
• On or about October 28, 1958, the defendant partnership purchased ten sets of axle assemblies from the plaintiff on credit for the sum of P2,400.00.

Payment and Attempted Settlement

• On December 6, 1958, defendants delivered two postdated cash checks for P1,200.00 each, drawn against the Philippine Bank of Commerce.
• When presented for payment, these checks were dishonored for lack of funds.
• Subsequently, defendants replaced the dishonored checks with another set of two postdated checks for the same amount, which were also dishonored upon presentation.

Plaintiff’s Action and Additional Allegations

• On February 23, 1959, the plaintiff demanded cash payment, which was refused by the defendants.
• The plaintiff claimed to have incurred attorney’s fees amounting to P750.00 due to the defendants’ malicious and willful refusal to pay, necessitating the engagement of counsel.
• Plaintiff further alleged that defendants intended to remove or dispose of their property with the intent to defraud, thereby justifying the issuance of a writ of attachment.

Pre-Trial and Trial Court Proceedings

• Plaintiff filed the complaint on April 8, 1959, and obtained a writ of attachment.
• Defendants secured the lifting of the attachment by filing a counterbond on April 14, 1959.
• On May 7, 1959, defendants filed an answer admitting the key allegations of the complaint up to the denial of payment and the issuance of dishonored checks.
• In their answer, defendants admitted to the transaction and the non-payment but invoked the defense that they had numerous pending receivables and had requested the plaintiff to wait for their collection.
• Defendants specifically denied the allegations regarding the attorney’s fees and the fraudulent removal or disposal of their property, labeling these allegations as false and malicious.

Judgment of the Lower Court

• The Court of First Instance of Manila, on motion by the plaintiff and over the objection of the defendants, rendered judgment on the pleadings.
• The lower court sentenced the defendants to pay P2,400.00, plus legal interest from the filing of the complaint, and awarded P500.00 as attorney’s fees.

Appeal

• Defendants appealed the decision, arguing that the judgment on the pleadings was erroneous due to material issues raised by their answer.

Issue:

Whether the rendering of judgment on the pleadings was proper given that defendants admitted the material allegations concerning the debt and its non-payment.

• Did the admitted facts suffice to support the judgment?
• Were the additional defenses regarding pending receivables adequate to raise a genuine issue?

Whether the denial of the plaintiff's allegation regarding the stipulated attorney’s fees and the claim of fraudulent removal of property affected the validity of the judgment on the pleadings.

• Can the denial of alleged attorney's fees and fraudulent removal undercut the overall relief granted?
• Do these denials constitute material issues that would warrant a trial rather than judgment on the pleadings?

Whether a debtor’s excuse of having numerous outstanding accounts receivable justifies delaying payment when faced with clear allegations of non-payment.

• Is this a valid defense under the rules governing judgment on the pleadings?

• Whether the court was justified in exercising its discretion under the Civil Code, particularly Article 2203, to allow reasonable attorney’s fees even though not all allegations were admitted by the defendants.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)