Case Digest (G.R. No. 75502)
Facts:
Kalilid Wood Industries Corporation, Alfredo Salonga and Joaquin Miguel de Jesus v. Honorable Intermediate Appellate Court and Philippine Banking Corporation, G.R. No. 75502, November 12, 1987, Supreme Court Third Division, Feliciano, J., writing for the Court.On November 17, 1976, Joaquin Miguel de Jesus and Alfredo T. Salonga, as President-General Manager and Comptroller respectively of P.B. De Jesus and Company, Inc., executed Promissory Note PBC No. 1202-76 in favor of Philippine Banking Corporation for P600,000.00, due December 29, 1976; on December 2, 1976 they executed Promissory Note PBC No. 1255-76 for P300,000.00, due January 3, 1977. Each note was signed both for the corporation (P.B. De Jesus & Co., Inc.) and “in our personal capacity” by Salonga and de Jesus; both notes recited 14% per annum interest and a 10% attorney’s fee clause.
By stockholders' vote on March 5, 1978, P.B. De Jesus and Company, Inc. changed its corporate name to Kalilid Wood Industries Corporation (“Kalilid”), later validated by the SEC. The Bank served demand letters to Kalilid for unpaid obligations under the two notes, but Kalilid disowned liability. On May 15, 1981 the Bank filed a Complaint for Collection (Civil Case No. 41268) in Branch 23 of the then Court of First Instance of Rizal against Kalilid and the two individual signatories; the complaint annexed the two promissory notes and two Statements of Account prepared by the Bank showing a claimed aggregate indebtedness of P1,780,253.08 as of April 30, 1981.
Kalilid's Answer, filed July 10, 1981, alleged lack of knowledge to form a belief on the complaint's material allegations and asserted as affirmative defense that the corporate officers lacked authority to bind the corporation — but the Answer was not verified. The complaint was dismissed without prejudice as to de Jesus and Salonga because their whereabouts could not be ascertained. At pre-trial the parties failed to settle and the Bank moved for summary judgment; Kalilid offered no opposition to that motion.
In a Decision dated October 12, 1983, the trial court granted summary judgment for the Bank, ordering Kalilid to pay P1,780,253.08 with legal interest from April 9, 1981, attorney’s fees of 10% and costs. The trial judge grounded his ruling primarily on (1) Kalilid’s failure to verify its Answer, which he considered an admission of genuineness and due execution of the promissory notes attached to the complaint, and (2) the fact that the notes bore signatures both for the corporation and in the signatories’ personal capacities.
The then Intermediate Appellate Court (Third Civil Cases Division) affirmed in toto in its November 8, 1985 Decision, sustaining that Kalilid’s failure to deny under oath the documents deemed them admitted and upholding the Bank’s computations shown in the attached Statements of Account. Kalilid’s motion for reconsideration was denied on July 29, 1986. In the present Petition for Review before the Supreme Court, Kalilid conced...(Subscriber-Only)
Issues:
- Does Kalilid’s failure to verify its Answer amount to an implied admission of the genuineness and due execution of the promissory notes attached to the complaint and justify summary judgment?
- Does the implied admission extend to the Bank’s Statements of Account (Annexes C and D), and may service charges, penalty charges and interest-on-interest shown thereon be conclusively applied ...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)