G.R. No. 153126 - Monterey Foods Corp. vs. Eserjose

Monterey Foods Corporation (petitioners) engaged in transactions with respondent Victorino E. Eserjose whereby, for a period of twelve years, respondent purchased live cattle and hogs from the petitioner.
The transactions were evidenced by invoices and delivery receipts with payments due within ten days from the invoice date.
Due to respondent’s repeated failure to settle his accounts, which eventually amounted to over P87 million, the petitioner ceased further transactions.

In 1998, while the commercial relationship was ongoing, the parties entered into a contract growing agreement.

Under this agreement, Monterey Foods Corporation supplied livestock to the respondent for the purpose of growing, caring for, and nurturing on his farm in San Jose, Batangas.
The agreement stipulated a compensation to the respondent, with the petitioner later alleging respondent’s failure to post the requisite bond and poor farm management as grounds for withdrawal.

After five months, the petitioner unilaterally abandoned the contract without paying the respondent for his services, which led the respondent to demand P1,280,000.00 in compensation.

The respondent, having repeatedly demanded payment for services rendered under the contract growing agreement, filed an action for sum of money and damages (Civil Case No. Q-98-36421) against Monterey Foods Corporation and its President, Ramon F. Llanos.
During the litigation, petitioners filed a Joint Answer but failed to appear at the pre-trial conference held on May 14, 1999, leading to their default and allowing the respondent to present evidence ex parte.
On May 24, 1999, the trial court issued a judgment in favor of the respondent ordering payment, which included:

Petitioners sought a new trial, which was granted by the trial court, thus reopening pre-trial proceedings.
During post-pretrial hearings:

The respondent submitted a motion asserting that petitioners had admitted liability under the growing contract agreement for the lesser amount of P482,766.88.
This admission was recorded during the trial when petitioners confirmed that the respondent was entitled to a net compensation of P482,766.88.

Consequently, the trial court rendered a partial summary judgment specifically for the admitted amount while setting the remaining issues (such as damages claims) for further trial.
The respondent moved to execute the partial summary judgment, which was granted by the trial court despite petitioners’ motions for reconsideration.
Petitioners, then, elevated the case to the Court of Appeals through a petition for certiorari (CA-G.R. SP No. 56305), which was dismissed on November 21, 2001.

The propriety of executing a partial summary judgment that was not final.
The allowance of an ex parte motion without affording petitioners the opportunity to be heard.
The sufficiency of a bond as a basis for discretionary execution.
The alleged invalidity of the partial summary judgment as well as its impact on due process.
The departure of the trial court from the usual course of judicial proceedings.

Essentially, the central question leaned on whether summary judgment was proper under the circumstances of this case.

Whether the Court of Appeals erred in sanctioning the writ of execution on a partial summary judgment that was not yet final in character.

The petitioners argued that execution should only be allowed on a final and appealable judgment.
The issue also involved the propriety of executing a summary judgment based on ex parte proceedings.

Whether the execution of the partial summary judgment, based on the admission by petitioners of liability under the contract growing agreement (for the amount of P482,766.88), was valid as there were no genuine issues of fact remaining.

Petitioners contended that the partial summary judgment was interlocutory in nature and did not dispose of the case entirely.
The adequacy of due process, given that petitioners were not afforded full opportunity to contest the motion, was also raised.

Whether the aforementioned partial summary judgment and its execution effectively shut down further proceedings on the complaint, thereby constituting a de facto final judgment that should be executed.

The discussion included whether the separate counterclaims relating to other transactions were sufficiently intertwined with the admitted liabilities under the growing contract.