Title
C. Heinszen and Co. vs. Jones
Case
G.R. No. 2028
Decision Date
Sep 16, 1905
Plaintiffs sued defendant over unpaid promissory note; defendant denied execution and payment. Lower court struck answer as "sham," but Supreme Court reversed, citing failure to deny execution under oath. Case remanded.
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Case Digest (G.R. No. 2028)

Facts:

  1. Parties Involved:

    • Plaintiffs and Appellees: C. Heinszen & Co.
    • Defendant and Appellant: Henry M. Jones
  2. Nature of the Case:

    • The plaintiffs filed a complaint against the defendant, alleging the execution of a promissory note, its endorsement to the plaintiffs, and the nonpayment of the note.
  3. Defendant’s Answer:

    • The defendant filed an answer denying the allegations of the complaint. Specifically:
      • He denied executing the promissory note or authorizing anyone to do so on his behalf.
      • He claimed that if he had executed the note, it had already been paid in full.
      • He further alleged that if the note was executed, it was done as an accommodation to the payee, and no value was received by him.
  4. Procedural History:

    • The lower court struck out the defendant’s answer as a "sham" under Section 107 of the Code of Civil Procedure and entered judgment in favor of the plaintiffs.
    • The defendant appealed the decision, challenging both the judgment and the order striking out his answer.
  5. Key Allegations:

    • The plaintiffs’ complaint relied on three material allegations:
      1. The due execution of the promissory note.
      2. The endorsement of the note to the plaintiffs.
      3. The nonpayment of the note.
  6. Defendant’s Defense:

    • The defendant’s answer included a general denial of the allegations but did not specifically deny the execution of the note under oath.

Issue:

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Ruling:

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Ratio:

  1. Striking Out an Answer as a Sham:

    • A court may strike out an answer as a "sham" only if it is clearly shown to be false or frivolous. In this case, the lower court erred in striking out the defendant’s answer without sufficient evidence to support such a finding.
  2. Denial of Execution Under Oath:

    • Under Section 103 of the Code of Civil Procedure, a defendant must deny the execution of a written instrument under oath. Failure to do so constitutes an admission of the instrument’s genuineness. The defendant’s answer in this case did not meet this requirement.
  3. Endorsement of the Note:

    • The defendant was not required to deny the endorsement of the note under oath because the action was based on the promissory note itself, not the endorsement. The endorsement imposed no liability on the defendant, and he could not be expected to know whether the payee had endorsed the note to a third party.
  4. Remand for Further Proceedings:

    • The case was remanded to the lower court to allow the defendant to properly address the allegations and for the court to proceed in accordance with the law.


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