G.R. No. L-26630 - Philippine Reconstruction Corp., Inc. vs. Aparente

The case involves an appeal from the Court of First Instance of Manila in Civil Case No. 61048, an action for revival of a previous money judgment.
The original judgment rendered in Civil Case No. 13832 (Branch IX, CFI Manila) ordered defendant Pablo Aparente to pay Philippine Reconstruction Corporation, Inc. a sum of money based on recovery of promissory notes and associated charges.
The judgment had become final and executory on June 28, 1955 but was not executed until the revival action was initiated on May 25, 1965.

On March 31, 1950, Pablo Aparente executed four promissory notes, each for P1,000.00, maturing on several dates in 1950, with 12% interest per annum in case of default.
To secure the payment, defendant also executed a chattel mortgage on certain sawmill equipment purchased from the plaintiff.
Despite repeated demands for payment, defendant failed to redeem the promissory notes, prompting the plaintiff to retain legal counsel and press the claim.

Plaintiff’s evidence established the execution of promissory notes and the mortgage to secure said notes.
The trial court ruled in favor of the plaintiff, ordering payment of P4,000.00 plus interest from the respective due dates, attorney’s fees, and costs.

The defendant filed an answer specifically denying the allegations based on a lack of sufficient knowledge to form a belief as to the truth of the complaint’s averments.
Special defenses raised by the defendant included:

Alleged lack of legal capacity of the plaintiff (claiming that the corporation had long ceased to exist or exercise corporate powers due to non-usage).
The prescription defense, asserting that the causes of action had long prescribed.
The contention that the obligations had been paid and released.

At pre-trial, defendant abandoned his defense of payment, narrowing the issues to prescription and plaintiff’s capacity to sue.

The defendant contended that the plaintiff corporation’s non-user or abandonment of its business, offices, and officer elections constituted a loss of its corporate franchise.
Evidence, including a Securities and Exchange Commission certification, was presented by the defendant but ultimately affirmed the corporation’s existence.
The court noted that even if non-usage existed, such a fact did not automatically dissolve the corporation without a judicial decree, thus not affecting its capacity to sue.

The revival action is viewed as a procedural mechanism designed solely to revive the execution of a dormant final judgment.
It is not intended to reopen the substantive merits of the original case, including issues that could have been raised in the first suit.
Questions regarding corporate legal personality, which should have been addressed in the previous litigation, are deemed foreclosed in the revival action.

The court observed that the defendant’s form of denial—stating a lack of sufficient knowledge—was used in a way that could lead to confusion regarding which allegations were truly contested.
Emphasis was placed on the requirement for denials to be made “in sincerity and good faith” to avoid any implication of an implied admission.
The court referenced established jurisprudence and rules on pleadings to caution against evasive pleadings that obscure the issues.

Whether the revival action, being merely a procedural means to execute a dormant judgment, permits the raising of issues that could have been raised in the initial action.
Whether matters affecting the merits of the original judgment, such as the alleged lack of corporate capacity, can be reconsidered in the revival suit.

Whether the plaintiff, Philippine Reconstruction Corporation, Inc., lost its juridical personality due to non-utilization or abandonment of its corporate franchise.
Whether the defendant’s defense based on the corporation’s alleged non-user status is tenable at the time the revival action was filed.

Whether the defendant’s specific denial alleging “lack of sufficient knowledge” as to the truth of material averments effectively raised a triable issue or amounted to an evasive tactic.
Whether such form of denial should be treated as an admission under the rules on pleadings, particularly when it is evident that information relating to the core allegations was readily accessible.