ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION, Petitioner,

vs.

PHILIPPINE COMMERCIAL INTERNATIONAL BANK, Respondent.

G.R. No. 153827 - April 25, 2006

DECISION

GARCIA, J.:

In this petition for review under Rule 45 of the Rules of Court, petitioner Asian Construction and
Development Corporation or "ASIAKONSTRUKT," seeks the reversal and setting aside of the
decision1dated March 15, 2002 and the Resolution2 dated June 3, 2002 of the Court of Appeals (CA)
in CA-G.R. CV No. 68189. The assailed decision affirm with modification the Summary Judgment
rendered by the Regional Trial Court (RTC) of Makati City in an action for a sum of money thereat
commenced by the herein respondent, Philippine Commercial International Bank (PCIBANK) against
the petitioner, while the challenged resolution denied petitioner’s motion for reconsideration.

The facts:

On February 24, 1999, in the RTC of Makati City, respondent PCIBANK filed a complaint3 for a sum
of money with prayer for a writ of preliminary attachment against petitioner ASIAKONSTRUKT.
Docketed as Civil Case No. 99-432, the complaint alleged, inter alia, as follows:

FIRST CAUSE OF ACTION

2.01 On various occasions, ASIAKONSTRUKT obtained U.S. dollar denominated credit

accommodations from PCIBANK in the amount of Four Million Four Hundred Eighty Seven
Thousand U.S. dollars (US$4,487,000.00), exclusive of interests, charges and fees thereon and the
cost of collecting the same. These credit accommodations are covered by the following promissory
notes:

xxx xxx xxx

2.02 Prompt and faithful payment of all the foregoing promissory notes was secured by the following
deeds of assignment executed by ASIAKONSTRUKT in favor of PCIBANK:

(a) Deed of Assignment of Receivables/Contract Proceeds dated 20 July 1994… where

ASIAKONSTRUKT assigned its receivables from its Contract … with the National Power
Corporation (NPC) in the amount of ….P54,500,000;

(b) Deed of Assignment of Receivables … dated 28 June 1995 … where ASIAKONSTRUKT

assigned its receivables from its Contract … with the NPC in the amount of
…P26,281,000.00;

(c) Deed of Assignment of Receivables dated 28 August 1995 … where ASIAKONSTRUKT

assigned its receivables from its Sub-Contract with ABB Power, Inc., in the amount
of P43,000,000.00;
 (d) Deed of Assignment of Contract Proceeds dated 27 March 1996 … where
ASIAKONSTRUKT assigned its receivables from its contracts with PNOC … in the
aggregate amount of P46,000,000.00; and

(e) Deed of Assignment of Contract Proceeds … dated 20 February 1997 … where

ASIAKONSTRUKT assigned its receivables from the Ormat Philippines, Inc., in the
aggregate amount of US$3,350,000.00;

2.03 All the foregoing deeds of assignments stipulate, among others, the following terms and
conditions:

a) The assignment is for the purpose of securing payment of the principal amount and the
interests and bank charges accruing thereon, the costs of collecting the same and all other
expenses which PCIBANK may be put in connection with or as an incident of the
assignment;

b) That the assignment secures also any extension or renewal of the credit which is the
subject thereof as any and all other obligations of ASIAKONSTRUKT of whatever kind and
nature as appear in the records of PCIBANK, which ASIAKONSTRUKT accepts as the final
and conclusive evidence of such obligations to PCIBANK, "whether contracted before, during
or after the constitution of [the assignment agreement]";

c) That PCIBANK authorizes ASIAKONSTRUKT, at the latter’s expense, to "collect and

receive for [PCIBANK] all the Receivables"; and

d) That ASIAKONSTRUKT "shall have no right, and agrees not to use any of the proceeds of
any collections, it being agreed by the parties that [ASIAKONSTRUKT] divests itself of all the
rights, title and interest in said Receivables and the proceeds of the collection received
thereon." 1avvphil.net

2.04 The promissory notes have remained not fully paid despite their having become due and
demandable. Repeated verbal and written demands were made upon ASIAKONSTRUKT, but to no
avail. It has failed and refused, and continues to fail and refuse, to pay its outstanding obligations to
PCIBANK…;

2.05 As a result of ASIAKONSTRUKT’s refusal to pay its outstanding obligations, PCIBANK was
constrained to refer the matter … to counsel and thus incur attorney’s fees and legal costs.

2.06 The aggregate unpaid obligation of ASIAKONSTRUKT to PCIBANK, as of 31 December 1998,

amounts to… US$4,553,446.06, broken down as follows:

Principal US$ 4,067,867.23

Interest US$ 291,263.27

Penalties US$ 194,315.56

TOTAL US$ 4,553,446.06

For its second cause of action, PCIBANK alleged in the same complaint as follows:
 SECOND CAUSE OF ACTION

4.02 … as a result of the fraudulent acts of ASIAKONSTRUKT, PCIBANK suffered the following
damages, all of which ASIAKONSTRUKT must be held to pay PCIBANK:

4.02.1 Exemplary damages, in the interest of public good and purposes of correction, in the amount
of not less than ….P50,000.00;

4.02.2 Attorney’s fees in the amount of not less than …. P1,800,000.00; and

4.02.3 Costs of suit.

In support of its prayer for a writ of preliminary attachment embodied in the complaint, plaintiff
PCIBANK alleges the following:

3.02 … ASIAKONSTRUKT is guilty of fraud in contracting the debt, in the performance thereof, or
both, xxx;

303. PCIBANK agreed to enter into the above-mentioned credit accommodations primarily because
of the existence of the deeds of assignment listed above. However, from telephone inquiries made
with responsible officers of the National Power Corporation, ABB Power, Inc., PNOC and Ormat
Philippines, Inc., PCIBANK was surprised to learn that ASIAKONSTRUKT had long ago collected
the contract proceeds, or portions thereof, which were previously assigned to PCIBANK. However,
to date, it has yet to turn over these proceeds to PCIBANK. Worse, PCIBANK learned that the
contract proceeds were used by ASIAKONSTRUKT for its own purposes – clear evidence of fraud,
which has deprived PCIBANK of its security. ASIAKONSTRUKT’s unauthorized use of the contract
proceeds for its own purposes was subsequently confirmed by Mr. Napoleon Garcia, Vice President
for Finance of ASIAKONSTRUKT, in a telephone discussion on 12 January 1999 with Ms. Maricel E.
Salaveria of PCIBANK. xxx Needless to say, ASIAKONSTRUKT has fraudulently collected such
receivables to the prejudice of PCIBANK.

3.04 … it is evident that ASIAKONSTRUKT never had any intention of complying with the deeds of
assignment. ASIAKONSTRUKT only misled PCIBANK into believing that it had sufficient security to
ensure payment of its loan obligations.

3.05 Alternatively, granting, in argumenti gratia, that ASIAKONSTRUKT, at the time it executed the
foregoing deeds of assignment, really intended to abide by their terms and conditions, it
nevertheless committed manifest fraud when it collected the contract proceeds, and instead of
remitting them to PCIBANK, used them for its own purposes.

In an order4 dated April 13, 1999, the trial court, after receiving ex parte PCIBANK’s evidence in
support of its prayer for preliminary attachment, directed the issuance of the desired writ, thus:

WHEREFORE, let a writ of preliminary attachment issue against all the property of defendant not
exempt from execution or so much thereof as may be sufficient to satisfy plaintiff’s principal claim of
US$4,553,446.06, representing the alleged unpaid obligation of defendant, inclusive of interest and
penalty charges, as of December 31, 1998, which is equivalent to P174,260,380.72, upon plaintiff’s
filing of a bond in an equal amount to answer for all it may sustain by reason of the attachment if the
Court shall finally adjudge that plaintiff was not entitled thereto.

SO ORDERED.
With plaintiff PCIBANK having posted the requisite bond, a writ of preliminary attachment was
thereafter issued by the trial court. Per records, defendant ASIAKONSTRUKT did not file any motion
for the quashal or dissolution of the writ.

Meanwhile, on August 27, 1999, defendant ASIAKONSTRUKT filed its Answer,5 thereunder making
admissions and denials. Defendant admits, subject to its defenses, the material allegations of the
Complaint as regards its indebtedness to plaintiff PCIBANK and its execution of the various deeds of
assignment enumerated therein. It, however, denies, for lack of knowledge sufficient to form a belief
as to the truth thereof, the averments in the Complaint that it has not paid, despite demands, its due
and demandable obligations, as well as the amounts due the plaintiff as itemized in paragraph 2.06,
supra, of the Complaint. It likewise denies PCIBANK’s allegations in the same Complaint in support
of its prayer for a writ of preliminary attachment, particularly its having fraudulently misappropriated
for its own use the contract proceeds/receivables under the contracts mentioned in the several
deeds of assignments, claiming in this respect that it has still remaining receivables from those
contracts.

By way of defenses, defendant pleads in its Answer the alleged "severe financial and currency crisis"
which hit the Philippines in July 1997, which adversely affected and ultimately put it out of business.
Defendant adds that the deeds of assignments it executed in favor of PCIBANK were standard forms
proposed by the bank as pre-condition for the release of the loans and therefore partake of the
nature of contracts of adhesion, leaving the defendant to the alternative of "taking it or leaving it." By
way of counterclaim, defendant prayed for an award of P1,000,000.00 as and for attorney’s fees
and P200,000.00 as litigation expenses.

On January 24, 2000, plaintiff PCIBANK filed a verified Motion for Summary Judgment,6 therein
contending that the defenses interposed by the defendant are sham and contrived, that the alleged
financial crisis pleaded in the Answer is not a fortuitous event that would excuse debtors from their
loan obligations, nor is it an exempting circumstance under Article 1262 of the New Civil Code
where, as here, the same is attended by bad faith. In the same motion, PCIBANK also asserts that
the deeds of assignments executed in its favor are not contracts of adhesion, and even if they were,
the same are valid.

To the Motion for Summary Judgment, defendant interposed an Opposition7 insisting that its Answer
tendered or raised genuine and substantial issues of material facts which require full-blown trial,
namely:

1. Whether or not defendant received all or part of the proceeds/receivables due from the
contracts mentioned in the deeds of assignment at the time the complaint was filed;

2. Granting that defendant received those proceeds/receivables, whether or not defendant

fraudulently misappropriated the same;

3. Whether or not defendant is virtually insolvent as a result of the regionwide economic

crisis that hit Asia, causing the Philippine peso to depreciate drastically; and

4. Whether the parties dealt with each other on equal footing with respect to the execution of
the deeds of assignment as to give the defendant an honest opportunity to reject the onerous
terms imposed therein.

Significantly, defendant did not append to its aforementioned Opposition any affidavit in support of
the alleged genuine issues of material facts mentioned therein.
Before the pending incident (motion for summary judgment) could be resolved by the trial court,
plaintiff PCIBANK waived its claim for exemplary damages and agreed to reduce its claim for
attorney’s fees from P1,800,000.00 to P1,260,000.00, but made it clear that its waiver of exemplary
damages and reduction of attorney’s fees are subject to the condition that a full and final disposition
of the case is obtained via summary judgment.

On May 16, 2000, the trial court, acting favorably on PCIBANK’s motion for summary judgment,
came out with its Summary Judgment,8 the decretal portion of which reads:

WHEREFORE, judgment is hereby rendered ordering defendant to pay plaintiff:

1. the sum of US$4,553,446.06, or its equivalent in Philippine currency at the time of

payment, with interest thereon at the rate of 8.27% per annum from February 24, 1999 until
fully paid;

2. P1,260,000.00 as and for attorney’s fees; and

3. the costs of suit.

SO ORDERED.

Explains the trial court in rendering its Summary Judgment:

A thorough examination of the parties’ pleadings and their respective stand in the foregoing motion,
the court finds that indeed with defendant’s admission of the first cause of action there remains no
question of facts in issue. Further, the proffered defenses are worthless, unsubstantial, sham and
contrived.

Considering that there is no more issue to be resolved, the court hereby grants plaintiff’s Motion and
renders Judgment in favor of the plaintiff against the defendant based on their respective pleadings
in accordance with Section 4, Rule 35 of the Rules of Court.

In time, petitioner went to the CA whereat its appellate recourse was docketed as CA-G.R. CV No.
68189. As stated at the threshold hereof, the CA, in its decision9 of May 15, 2002, affirmed with
modification the Summary Judgment rendered by the trial court, the modification being as regards
the award for attorney’s fees which the CA reduced to P1,000,000.00, to wit:

IN THE LIGHT OF ALL THE FOREGOING, the appeal is PARTIALLY GRANTED. The "Decision"
appealed from is AFFIRMED with the MODIFICATION THAT THE AWARD FOR ATTORNEY’S
FEES is reduced to P1,000,000.00.

SO ORDERED.

With its motion for reconsideration having been denied by the CA in its Resolution10 of June 3, 2002,
petitioner is now with us via the present recourse, raising the following issues:

I WHETHER OR NOT THERE IS A GENUINE ISSUE AS TO A MATERIAL FACT WHICH RULES

OUT THE PROPRIETY OF A SUMMARY JUDGMENT.

II WHETHER OR NOT THE AWARD OF ATTORNEY’S FEES IS EXORBITANT OR

UNCONSCIONABLE.
We DENY.

As in the two courts below, it is petitioner’s posture that summary judgment is improper in this case
because there are genuine issues of fact which have to be threshed out during trial, to wit: (a)
whether or not petitioner was able to collect only a portion of the contract proceeds/receivables it
was bound to deliver, remit and tender to respondent under the several deeds of assignment it
executed in favor of the latter; and (b) whether or not petitioner fraudulently misappropriated and
used for its benefit the said proceeds/receivables. Ergo, so petitioner maintains, genuine triable
issues of fact are present in this case, which thereby precludes rendition of summary judgment.

We are not persuaded.

Under Rule 35 of the 1997 Rules of Procedure, as amended, except as to the amount of damages,
when there is no genuine issue as to any material fact and the moving party is entitled to a judgment
as a matter of law, summary judgment may be allowed.11 Summary or accelerated judgment is a
procedural technique aimed at weeding out sham claims or defenses at an early stage of litigation
thereby avoiding the expense and loss of time involved in a trial.12

Under the Rules, summary judgment is appropriate when there are no genuine issues of fact which
call for the presentation of evidence in a full-blown trial. Even if on their face the pleadings appear to
raise issues, when the affidavits, depositions and admissions show that such issues are not genuine,
then summary judgment as prescribed by the Rules must ensue as a matter of law. The
determinative factor, therefore, in a motion for summary judgment, is the presence or absence of a
genuine issue as to any material fact.

A "genuine issue" is an issue of fact which requires the presentation of evidence as distinguished
from a sham, fictitious, contrived or false claim. When the facts as pleaded appear uncontested or
undisputed, then there is no real or genuine issue or question as to the facts, and summary
judgment is called for. The party who moves for summary judgment has the burden of demonstrating
clearly the absence of any genuine issue of fact, or that the issue posed in the complaint is patently
unsubstantial so as not to constitute a genuine issue for trial. Trial courts have limited authority to
render summary judgments and may do so only when there is clearly no genuine issue as to any
material fact. When the facts as pleaded by the parties are disputed or contested, proceedings for
summary judgment cannot take the place of trial.13

The CA, in its challenged decision, stated and we are in full accord with it:

In the present recourse, the [petitioner] relied not only on the judicial admissions … in its pleadings,
more specifically its "Answer" to the complaint, the testimony of Maricel Salaveria as well as Exhibits
"A" to "T-3", adduced in evidence by the [respondent], during the hearing on its plea for the
issuance, by the Court a quo, of a writ of preliminary attachment. Significantly, the [petitioner] did not
bother filing a motion for the quashal of the "Writ" issued by the Court a quo.

It must be borne in mind, too, that the [petitioner] admitted, in its "Answer" … the due execution and
authenticity of the documents appended to the complaint … . The [petitioner] did not deny its liability
for the principal amount claimed by the [respondent] in its complaint. The [petitioner] merely alleged,
by way of defenses, that it failed to pay its account … because of the region-wide economic crisis
that engulfed Asia, in July, 1997, and the "Deeds of Assignment" executed by it in favor of the
[respondent] were contracts of adhesion:

xxx xxx xxx

The [petitioner] elaborated on and catalogued its defenses in its "Appellants Brief" what it believed,
as "genuine issues".

"(i) Whether or not [petitioner] received all or part of the proceeds/receivables due from the
construction contracts at the time the civil action was filed;

(ii) Granting that [petitioner] received the proceeds/receivables from the construction
contracts, whether or not [petitioner] fraudulently misappropriated the same;

(iii) Whether or not [petitioner] had become virtually insolvent as a result of the region-wide
economic crisis that hit Asia, causing the Philippine peso to depreciate dramatically; and

(iv) Whether or not [respondent] and [petitioner] dealt with each other on equal footing with
respect to the execution of the deeds of assignment of receivables as to give [petitioner] an
honest opportunity to reject the onerous terms imposed on it."

However, the [petitioner] failed to append, to its "Opposition" to the "Motion for Summary Judgment",
… "Affidavits" showing the factual basis for its defenses of "extraordinary deflation," including facts,
figures and data showing its financial condition before and after the economic crisis and that the
crisis was the proximate cause of its financial distress. It bears stressing that the [petitioner] was
burdened to demonstrate, by its "Affidavits" and documentary evidence, that, indeed, the Philippines
was engulfed in an extraordinary deflation of the Philippine Peso and that the same was the
proximate cause of the financial distress, it claimed, it suffered.

xxx xxx xxx

Where, on the basis of the records, inclusive of the pleadings of the parties, and the testimonial and
documentary evidence adduced by the [respondent], supportive of its plea for a writ of preliminary
attachment, the [respondent] had causes of action against the [petitioner], it behooved the
[petitioner] to controvert the same with affidavits/documentary evidence showing a prima
facie genuine defense. As the Appellate Court of Illinois so aptly declared:

The defendant must show that he has a bona fide defense to the action, one which he may be able
to establish. It must be a plausible ground of defense, something fairly arguable and of a substantial
character. This he must show by affidavits or other proof.

The trial court, of course, must determine from the affidavits filed whether the defendant has
interposed a sufficiently good defense to entitle it to defend, but where defendant’s affidavits present
no substantial triable issues of fact, the court will grant the motion for summary judgment.

xxx xxx xxx

The failure of the [petitioner] to append to its "Opposition" any "Affidavits" showing that its defenses
were not contrived or cosmetic to delay judgment … created a presumption that the defenses of the
[petitioner] were not offered in good faith and that the same could not be sustained (Unites States
versus Fiedler, et al., Federal Reported, 2nd, 578).

If, indeed, the [petitioner] believed it that was prevented from complying with its obligations to the
[respondent], under its contracts, it should have interposed a counterclaims for rescission of
contracts, conformably with the pronouncement of our Supreme Court, thus:
 xxx xxx xxx

The [petitioner] did not. This only exposed the barrenness of the pose of the [petitioner].

The [petitioner] may have experienced financial difficulties because of the "1997 economic crisis"
that ensued in Asia. However, the same does not constitute a valid justification for the [petitioner] to
renege on its obligations to the [respondent]. The [petitioner] cannot even find solace in Articles
1266 and 1267 of the New Civil Code for, as declared by our Supreme Court:

It is a fundamental rule that contracts, once perfected, bind both contracting parties, and obligations
arising therefrom have the force of law between the parties and should be complied with in good
faith. But the law recognizes exceptions to the principle of the obligatory force of contracts. One
exception is laid down in Article 1266 of the Civil Code, which reads: ‘The debtor in obligations to do
shall also be released when the prestation becomes legally or physically impossible without the fault
of the obligor.’

Petitioner cannot, however, successfully take refuge in the said article, since it is applicable only to
obligations "to do," and not obligations "to give." An obligation "to do" includes all kinds of work or
service; while an obligation "to give" is a prestation which consists in the delivery of a movable or an
immovable thing in order to create a real right, or for the use of the recipient, or for its simple
possession, or in order to return it to its owner.

xxx xxx xxx

In this case, petitioner wants this Court to believe that the abrupt change in the political climate of
the country after the EDSA Revolution and its poor financial condition "rendered the performance of
the lease contract impractical and inimical to the corporate survival of the petitioner." (Philippine
National Construction Corporation versus Court of Appeals, et al., 272 SCRA 183, at pages 191-
192, supra)

The [petitioner] even failed to append any "Affidavit" to its "Opposition" showing how much it had
received from its construction contracts and how and to whom the said collections had been
appended. The [petitioner] had personal and sole knowledge of the aforesaid particulars while the
[respondent] did not.

In fine, we rule and so hold that the CA did not commit any reversible error in affirming the summary
judgment rendered by the trial court as, at bottom, there existed no genuine issue as to any material
fact. We also sustain the CA’s reduction in the award of attorney’s fees to only P1,000,000.00, given
the fact that there was no full-blown trial.

WHEREFORE, the assailed CA decision is AFFIRMED in toto and this petition is DENIED for lack of
merit.

Costs against petitioner.

SO ORDERED.

CANCIO C. GARCIA
Associate Justice

WE CONCUR:
 (On leave)
REYNATO S. PUNO
Associate Justice
Chairperson

ANGELINA SANDOVAL-GUTIERREZ RENATO C. CORONA

Associate Justice Asscociate Justice

ADOLFO S. AZCUNA
Associate Justice

ATTESTATION

I attest that the conclusions in the above decision were reached in consultation before the case was
assigned to the writer of the opinion of the Court’s Division.

ANGELINA SANDOVAL-GUTIERREZ
Associate Justice
Acting Chairperson, Second Division

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairperson's Attestation, it
is hereby certified that the conclusions in the above decision were reached in consultation before the
case was assigned to the writer of the opinion of the Court.

ARTEMIO V. PANGANIBAN
Chief Justice

Footnotes

1Penned by then Associate Justice Romeo J. Callejo, Sr. (now a member of this Court), with
Associate Justices Remedios J. Salazar-Fernando and Perlita Tirona, (ret.), concurring;
Rollo, pp. 34-58.

2 Id. at 59.

3 Id. at 61-69.

4 Original Records, p. 320.

5 Rollo, pp. 70-75.

6 Rollo, pp. 78-85.

7 Id. at pp. 88-94.

8 Id. at 102-107.

9 Rollo, pp. 34-58.

10 Rollo, p. 59.

11 Northwest Airlines vs. CA, G.R. No. 120337, January 20, 1998, 284 SCRA 408.

12 Excelsa Industries, Inc, vs. CA,G.R. No. 105455, August 23, 1995, 247 SCRA 560.

13Evadel Realty and Development Corporation vs. Soriano, G.R. No. 144291, April 20, 2001,
357 SCRA 395, 401.
 MINDEX RESOURCES DEVELOPMENT, Petitioner,

vs.

EPHRAIM MORILLO, Respondent.

G.R. No. 138123 - March 12, 2002

THIRD DIVISION

PANGANIBAN, J.:

Attorney's fees cannot be granted simply because one was compelled to sue to protect and enforce
one's right. The grant must be proven by facts; it cannot depend on mere speculation or conjecture --
its basis must be stated in the text of the decision.

The Case

Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the March 26, 1999
Decision1 of the Court of Appeals (CA) in CA-GR CV No. 46967. The dispositive portion of the
challenged Decision reads as follows:

"WHEREFORE, the appealed decision is AFFIRMED with MODIFICATION that the legal interest to be
paid on the rentals of P76,000.00 and costs of repair in the amount of P132,750.00 is six (6%)
percent per annum from June 22, 1994, the date of the decision of the court a quo to the date of its
finality. Thereafter, if the amounts adjudged remain unpaid, the interest rate shall be twelve (12%)
percent per annum from the date of finality of the decision until fully paid."2

The Facts

The factual antecedents of the case are summarized by the CA in this wise:

"On February 1991, a verbal agreement was entered into between Ephraim Morillo and Mindex
Resources Corporation (MINDEX for brevity) for the lease of the former's 6 x 6 ten-wheeler cargo
truck for use in MINDEX's mining operations in Binaybay, Bigaan, San Teodoro, Oriental Mindoro, at
the stipulated rental of 'P300.00 per hour for a minimum of eight hours a day or a total of P2,400.00
daily.' MINDEX had been paying the rentals until April 10, 1991.

"Unknown to Morillo, on April 11, 1991, the truck was burned by unidentified persons while it was
parked unattended at Sitio Aras, Bigaan, San Teodoro, Oriental Mindoro, due to mechanical trouble.
The findings of the Mindoro Oriental Integrated National Police in their investigation report read:

'3. On 121005H April 1991, Mr Alexander Roxas, project coordinator of MINDEX MINING CORP.
reported to this office that on the morning of 12 April 1991 while he was supposed to report for his
Work at their office at Sitio Tibonbon, Bigaan, San Teodoro, Oriental Mindoro, he x x x noticed that
their hired 6 x 6 Ten wheeler Cargo Truck temporarily parked at Sitio Aras, Bigaan, San Teodoro,
Oriental Mindoro for aplha Engine Trouble was burned on the night of April 11, 1991 by still
unidentified person.

'x x x - x x x - x x x

'5. x x x Based also on the facts gathered and incident scene searched it was also found out that said
6 x 6 Ten Wheeler Cargo Truck was burned by means of using coconut leaves and as a result of which
said 6 x 6 was totally burned excluding the engine which was partially damaged by still undetermined
amount.'

"Upon learning of the burning incident, Morillo offered to sell the truck to MINDEX but the latter
refused. Instead, it replaced the vehicle's burned tires and had it towed to a shop for repair and
overhauling.

"On April 15, 1991, Morillo sent a letter to Mr. Arni Isberg, the Finance Manager of MINDEX, thru Mr.
Ramoncito Gozar, Project Manager, proposing the following:

'x x x - x x x - x x x

'I have written to let you know that I am entrusting to you the said vehicle in the amount of
P275,000.00 which is its cost price. I will not charge your company for the encumbrance of P76,800+
since you used it as my friendly gesture on account of the unforeseen adversity.

'In view of the tragic happening, I am asking you to pay us, in a way which will not be hard for you to
settle to pay us in four installment monthly as follows:

'First payment - April P[1]50,000.00

25/91

'Second payment - May 15/91 50,000.00

'Third payme(n)t - June 50,000.00

15/91

'Fourth payme(n)t - July 15/91 25,000.00

TOTAL P275,000.00

'I promise to relinquish all the necessary documents upon full payment of said account.

'x x x - x x x - x x x

"Through Mr. Gozar, MINDEX responded by a handwritten letter to his cousin Malou (wife of Ephraim
Morillo), expressing their reservations on the above demands due to their tight financial situation.
However, he made the following counter offers:

'a) Pay the rental of the 6 x 6 truck (actual) in the amount of P76,000.00.

'b) Repair and overhaul the truck on our own expenses and;

'c) Return it to you on (A1) good running condition after repair.'

"Morillo replied on April 18, 1991, (1) that he will relinquish to MINDEX the damaged truck; (2) that
he is amenable to receive the rental in the amount of P76,000.00; and (3) that MINDEX will pay fifty
thousand pesos (P50,000.00) monthly until the balance of P275,000.00 is fully paid. It is noteworthy
that except for his acceptance of the proffered P76,000.00 unpaid rentals, Morillo's stand has virtually
not been changed as he merely lowered the first payment on the P275,000.00 valuation of the truck
from P150,000.00 to P50,000.00.
"The parties had since remained intransigent and so on August 1991, Morillo pulled out the truck from
the repair shop of MINDEX and had it repaired elsewhere for which he spent the total amount
of P132,750.00."3 (Citations omitted)

Ruling of the Trial Court

After evaluating the evidence adduced by both parties, the Regional Trial Court (RTC) found petitioner
responsible for the destruction or loss of the leased 6 x 6 truck and ordered it to pay respondent
(1) P76,000 as balance of the unpaid rental for the 6 x 6 truck with interest of 12 percent from June
22, 1994 (the rendition of the judgment) up to the payment of the amount; (2) P132,750
representing the costs of repair and overhaul of the said truck, with interest rate of 12 percent until
fully paid; and (3) P20,000 as attorney's fees for compelling respondent to secure the services of
counsel in filing his Complaint.

Ruling of the Court of Appeals

The appellate court sustained the RTC's finding that petitioner was not without fault for the loss and
destruction of the truck and, thus, liable therefor. The CA said:

"The burning of the subject truck was impossible to foresee, but not impossible to avoid. MINDEX
could have prevented the incident by immediately towing the truck to a motor shop for the needed
repair or by having it guarded day and night. Instead, the appellant just left the vehicle where its
transfer case broke down. The place was about twelve (12) kilometers away from the camp site of the
appellant corporation and was sparsely populated. It was guarded only during daytime. It stayed in
that place for two (2) weeks until it was burned on April 11, 1991 while its transfer case was being
repaired elsewhere. It was only after it had been burned that the appellant had it towed to a repair
shop.

"The appellant [respondent] was thus not free from fault for the burning of the truck. It miserably
failed to overcome the presumption of negligence against it. Neither did it rescind the lease over the
truck upon its burning. On the contrary, it offered to pay P76,000.00 as rentals. It did not also
complete the needed repair. Hence, the appellee was forced to pull out the truck and had it repaired
at his own expense. Since under the law, the 'lessee shall return the thing leased, upon the
termination of the lease, just as he receive it, 'the appellant stands liable for the expenses incurred for
the repair in the aggregate amount of P132,750.00."4

Nevertheless, the appellate court modified the Decision of the trial court. The 12 percent interest rate
on the P76,000 rentals and the P132,750 repair costs, imposed by the RTC, was changed by the CA to
6 percent per annum from June 22, 1994 to the date of finality of the said Decision; and 12 percent
per annum thereafter, if the amounts adjudged would remain unpaid from such date of finality until
the rentals and the repair costs were fully paid. It affirmed the award of attorney's fees.

Hence, this Petition.5

Issues

In its Memorandum, petitioner raises the following issues for the Court's consideration:

"4.1. Whether or not the Court of Appeals gravely erred in finding that petitioner failed to overcome
the presumption of negligence against it considering that the facts show, as admitted by the
respondent, that the burning of the truck was a fortuitous event.

"4.2. Whether or not the Court of Appeals gravely erred in affirming the decision of the trial court
finding petitioner liable to pay unpaid rentals and cost of repairs.
"4.3. Whether or not the Court of Appeals also erred in affirming the decision of the trial court finding
petitioner liable to pay attorney's fees."6

This Court's Ruling

The Petition is partly meritorious; the award of attorney's fees should be deleted.

First Issue:

Petitioner's Negligence

Petitioner claims that the burning of the truck was a fortuitous event, for which it should not be held
liable pursuant to Article 11747 of the Civil Code. Moreover, the letter of respondent dated April 15,
1991, stating that the burning of the truck was an "unforeseen adversity," was an admission that
should exculpate the former from liability.

We are not convinced. Both the RTC and the CA found petitioner negligent and thus liable for the loss
or destruction of the leased truck. True, both parties may have suffered from the burning of the truck;
however, as found by both lower courts, the negligence of petitioner makes it responsible for the loss.
Well-settled is the rule that factual findings of the trial court, particularly when affirmed by the Court
of Appeals, are binding on the Supreme Court. Contrary to its allegations, petitioner has not
adequately shown that the RTC and the CA overlooked or disregarded significant facts and
circumstances that, when considered, would alter the outcome of the disposition.8 Article 1667 of the
Civil Code9 holds lessees responsible for the deterioration or loss of the thing leased, unless they
prove that it took place without their fault.

Fortuitous Event

In order for a fortuitous event to exempt one from liability, it is necessary that one has committed no
negligence or misconduct that may have occasioned the loss.10 An act of God cannot be invoked to
protect a person who has failed to take steps to forestall the possible adverse consequences of such a
loss. One's negligence may have concurred with an act of God in producing damage and injury to
another; nonetheless, showing that the immediate or proximate cause of the damage or injury was a
fortuitous event would not exempt one from liability. When the effect is found to be partly the result of
a person's participation -- whether by active intervention, neglect or failure to act -- the whole
occurrence is humanized and removed from the rules applicable to acts of God.11

This often-invoked doctrine of "fortuitous event" or "caso fortuito" has become a convenient and easy
defense to exculpate an obligor from liability. To constitute a fortuitous event, the following elements
must concur: (a) the cause of the unforeseen and unexpected occurrence or of the failure of the
debtor to comply with obligations must be independent of human will; (b) it must be impossible to
foresee the event that constitutes the caso fortuito or, if it can be foreseen, it must be impossible to
avoid; (c) the occurrence must be such as to render it impossible for the debtor to fulfill obligations in
a normal manner; and (d) the obligor must be free from any participation in the aggravation of the
injury or loss.12

Article 1174 of the Civil Code states that no person shall be responsible for a fortuitous event that
could not be foreseen or, though foreseen, was inevitable. In other words, there must be an exclusion
of human intervention from the cause of injury or loss.13

A review of the records clearly shows that petitioner failed to exercise reasonable care and caution
that an ordinarily prudent person would have used in the same situation. Witness Alexander Roxas
testified how petitioner fell short of ordinary diligence in safeguarding the leased truck against the
accident, which could have been avoided in the first place. Pertinent portions of his testimony are
reproduced hereunder:
"ATTY. ACERON

Q - Now, this Barangay Aras where the 6 x 6 truck had transmission trouble, how far is it from the
camp site of the defendant corporation?

ALEXANDER ROXAS

A - Twelve (12) kilometers, more or less, sir.

Q - Is this Barangay Aras populated?

A - Not so many, sir.

Q - The place where the 6 x 6 truck had transmission trouble, how far is the nearest house from it?

A - Perhaps three hundred meters, sir.

Q - And how many houses are within the three hundred meter radius from the place where the truck
had engine trouble?

A - Ten, more or less, in scattered.

Q - You said that after hauling several sand to be used in the camp site the 6 x 6 truck had
transmission trouble, what did the company do after the truck had that engine trouble?

A - For at least two weeks the truck was installed in the place where the said truck had engine trouble.

Q - Meaning in Barangay Aras?

A - Yes, sir.

Q - Was there any guard in that place by the company during the time that the truck was in that
place?

A - Yes, sir, during daytime but at nighttime, there was no guard.

Q - What happened to that 6 x 6 truck?

A - In the month of March, 1991, the company dismissed thirteen (13) to seventeen (17) employees
and these employees came from Barangays Aras, Botolan, Calsapa, Camatis and Tibonbon and on Aril
11, 1991, the 6 x 6 truck was burned.

Q - How did you come to know that the 6 x 6 truck was burned on April 11, 1991?

A - I together with my daughter, I met the service of the company near the ORMECO and I was
informed by the Project Engineer that the 6 x 6 truck was burned, so, we returned to San Teodoro and
have the incident blottered at the police station.

Q - Aside from that, what other action did you undertake in connection with the burning of the 6 x 6
truck?
A - When we were at the police station, the Project Manager of the company arrived and from the
police station we proceeded to the place where the 6 x 6 truck was burned and the Project Manager
took pictures of the 6 x 6 truck.

Q - Now, did you come to know who was responsible or who were responsible for the burning of the 6
x 6 truck?

A - The responsible is the Mindex Resources Development Corporation, and as far as I know, the
persons who actually burned the said 6 x 6 truck were the dismissed employees of the Mindex
Resources Development Corporation.

Q - These dismissed employees of the corporation, why were they employed by the corporation?

A - Because we have to make a road going to the mining site and in the process of opening the road
these dismissed employees happened to be the owners of the land where the road will pass, so, we
paid the land. The corporation likewise gave jobs to the owners of the land."14

As can be gleaned from the foregoing testimony, petitioner failed to employ reasonable foresight,
diligence and care that would have exempted it from liability resulting from the burning of the truck.
Negligence, as commonly understood, is that conduct that naturally or reasonably creates undue risk
or harm to others. It may be a failure to observe that degree of care, precaution or vigilance that the
circumstances justly demand;15 or to do any other act that would be done by a prudent and
reasonable person, who is guided by considerations that ordinarily regulate the conduct of human
affairs.16

Second Issue:

Unpaid Rentals and Cost of Repairs

Petitioner proceeds to argue that "it should be deemed to have already paid the unpaid rentals in the
amount of P76,000.00," and that it should not be made to pay the P132,750 repair and overhaul
costs. Nothing in the records, not even in the documentary evidence it presented, would show that it
already paid the aforesaid amounts. In fact, it seeks to avoid payment of the rental by alleging that
respondent already condoned it in his letter dated April 15, 1991. However, a perusal of the letter
would show that his offer not to charge petitioner for the P76,000 rental was premised on the
condition that it would buy the truck.17

Moreover, the RTC based the P76,000 rental and the costs of repair and overhaul on Exhibit "B,"
wherein Chito Gozar, the Project Manager of Mindex Resources Development Corporation, proposed
through a letter dated April 17, 1991, the following: (1) to pay the P76,000 rental, (2) to repair the
truck at the expense of petitioner, and (3) to return the truck in good running condition after the
repair.

Likewise, the nonpayment of the said amount was corroborated by Roxas thus:

"Q - During that time when the 6 x 6 truck was already burned and when you went to the Petron
Gasoline Station to inform plaintiff about the burning, was the plaintiff paid any amount for the rental
of the 6 x 6 truck?

A: - Before the burning of the 6 x 6 truck, the plaintiff Morillo was already paid partially and there was
a balance of P76,000.00."18

The P132,750 repair and overhaul costs was correctly granted by the lower courts. Article 1667 of the
Civil Code holds the lessee responsible for the deterioration or loss of the thing leased. In addition,
Article 1665 of the same Code provides that "the lessee shall return the thing leased, upon the
termination of the lease, just as he received it, save what has been lost or impaired by the lapse of
time, or by ordinary wear and tear, or from an inevitable cause."

Courts begin with the assumption that compensatory damages are for pecuniary losses that result
from an act or omission of the defendant. Having been found to be negligent in safeguarding the
leased truck, petitioner must shoulder its repair and overhaul costs to make it serviceable again. Such
expenses are duly supported by receipts; thus, the award of P132,750 is definitely in order.

Third Issue:

Attorney's Fees

We find the award of attorney's fees to be improper. The reason which the RTC gave -- because
petitioner had compelled respondent to file an action against it -- falls short of our requirement
in Scott Consultants and Resource Development v. CA,19 from which we quote:

"It is settled that the award of attorney's fees is the exception rather than the rule and counsel's fees
are not to be awarded every time a party wins suit. The power of the court to award attorney's fees
under Article 2208 of the Civil Code demands factual, legal, and equitable justification; its basis
cannot be left to speculation or conjecture. Where granted, the court must explicitly state in the body
of the decision, and not only in the dispositive portion thereof, the legal reason for the award of
attorney's fees."

Moreover, a recent case20 ruled that "in the absence of stipulation, a winning party may be awarded
attorney's fees only in case plaintiff's action or defendant's stand is so untenable as to amount to
gross and evident bad faith."

Indeed, respondent was compelled to file this suit to vindicate his rights. However, such fact by itself
will not justify an award of attorney's fees, when there is no sufficient showing of petitioner's bad faith
in refusing to pay the said rentals as well as the repair and overhaul costs.21

WHEREFORE, the Petition is DENIED, but the assailed CA Decision is MODIFIED by DELETING the
award of attorney's fees. Costs against petitioner.

SO ORDERED.

Melo, Vitug, Sandoval-Gutierrez, and Carpio, JJ., concur.

Footnote

1 Special Tenth Division. Written by Justice Salvador J. Valdez Jr. (Acting Division chair) and concurred
in by Justices Eloy R. Bello Jr. and Renato C. Dacudao (members).

2 Assailed Decision, p. 10; rollo, p. 35.

3 CA Decision, pp. 1-4; rollo, pp. 26-29.

4 Ibid., pp. 8 & 33.

5 The case was deemed submitted for decision on June 21, 2001, upon the Court's receipt of
respondent's Memorandum, which was signed by Atty. Filibon Fabela Tacardon. Petitioner's
Memorandum, signed by Atty. Ricardo P. C. Castro Jr., was received by the Court on January 29,
2001.

6 Petitioner's Memorandum, p. 6; rollo, p. 114.

7 Article 1174 provides:

"Except in cases expressly specified by the law, or when it is otherwise declared by stipulation or when
the nature of the obligation requires the assumption of risk, no person shall be responsible for those
events which could not be foreseen, or which though foreseen, were inevitable."

8Spouses Belo v. Philippine National Bank, GR No. 134330, March 1, 2001; Republic v. CA, 349 SCRA
451, January 18, 2001; Halili v. CA, 287 SCRA 465, March 12, 1998.

9"Art. 1667. The lessee is responsible for the deterioration or loss of the thing leased, unless he
proves that it took place without his fault. This burden of proof on the lessee does not apply when the
destruction is due to earthquake, flood, storm or other natural calamity."

10Tolentino, Civil Code of the Philippines, Vol. IV, 1991 ed., p. 126, citing Tan Chiong Sian v.
Inchausti & Co., 22 Phil. 152, March 8, 1912; Juan F. Nakpil & Sons v. CA, 144 SCRA 596, 607,
October 3, 1986. Cf. Metal Forming Corporation v. Office of the President, 247 SCRA 731, 738-739,
August 28, 1995.

11 Nakpil & Sons v. CA, supra, pp. 606-607.

12Metal Forming Corp. v. Office of the President, 317 Phil. 853, 859, August 28, 1995; Vasquez v.
Court of Appeals, 138 SCRA 553, 557, September 13, 1985, citing Lasam v. Smith Jr. 45 Phil. 657,
661, February 2, 1924; Austria v. CA, 148-A Phil. 462, June 10, 1971; Estrada v. Consolacion, 71
SCRA 523, 530, June 29, 1976.

13 Vasquez v. CA, supra, p. 557.

14 TSN, November 24, 1992, pp. 9-13.

15Valenzuela v. CA, 253 SCRA 303, February 7, 1996. Cf. Quibal v. Sandiganbayan (Second Division),
244 SCRA 224, May 22, 1995; Citibank, NA v. Gatchalian, 240 SCRA 212, January 18, 1995.

16Layugan v. Intermediate Appellate Court, 167 SCRA 363, 372-373, November 14, 1988; Bulilan v.
COA, 300 SCRA 445, December 22, 1998.

17 See Exh. "C"; records, p. 220.

18
TSN, November 24, 1992, pp. 14-15.

19 242 SCRA 393, 406, March 16, 1995, per Davide Jr., CJ; see also Valiant Machinery & Metal Corp.
v. NLRC, 252 SCRA 369, January 25, 1996.

20National Power Corporation v. Philipp Brothers, GR No. 126204, November 20, 2001, per Sandoval-
Gutierrez, J.

21 National Steel Corporation v. CA, 283 SCRA 45, December 12, 1997.
MINDEX RESOURCES DEVELOPMENT, Petitioner,
vs.
EPHRAIM MORILLO, Respondent.
G.R. No. 138123 – March 12, 2002
[Panganiban, J.:]

FACTS:
MINDEX Resources Corporation and Ephraim Morillo entered into an oral agreement on February
1991 to lease the latter’s 6 x 6 ten-wheeler cargo truck for the use of MINDEX’ mining operations.
Not known to Morillo, the said subject was burned by still unidentified person while parked
unattended due to mechanical trouble. As a result, the truck was totally burned and only its
engine was partially damaged. Upon learning of the incident, the respondent offered to sell the
said truck but the petitioner refused to accept. Morillo then made a proposal to MINDEX through
a letter – that the cost of the truck is payable for four monthly installments plus the balance of
the unpaid rental. Due to tight financial situation, instead, petitioner made a counter offers – pay
the unpaid rent, repair and overhaul truck and return it to the owner in good running condition.
The latter was unable to complete the needed repair, Morillo then pulled out the truck from the
repair shop and had it repaired somewhere else at his own expense.

The Regional Trial Court (RTC) found petitioner liable for the destruction and loss of the subject
and ordered to pay the respondent for the balance of the unpaid rental and the cost of repair
and overhauling of the truck with an interest of 12% each. The decision was affirmed by Court of
Appeals (CA) and held the petitioner responsible for the damages. Nevertheless, the decision of
the RTC of 12 percent interest rate of unpaid rentals and repair cost was modified by CA and
adjusted it from 12% to 6% per annum up to the date of finality of the said decision. If the
amounts adjudged would remain unpaid, the 12% interest rate per annum would be imposed
thereafter until fully paid. The award of attorney’s fees was affirmed also by Court of Appeals.
Hence, this petition. Petitioner claims that the burning of the truck was a fortuitous event, for
which it should be held liable pursuant to Article 1174 of the Civil Code. Moreover, the letter of
respondent Dated April 15, 1991, stating that the burning of the truck was an “unforeseen
adversity,” was an admission that should exculpate the former from liability.
 REGIONAL TRIAL COURT
ISSUE:
Whether or not the petitioner held liable to pay unpaid rentals and cost of repairs.

RULING:
After evaluating the evidence adduced by both parties, the RTC found petitioner responsible for
the destruction or loss of the leased truck and ordered it to pay the respondent the balance of
the unpaid rental with interest of twelve (12) percent. The court ordered also to pay the cost
expensed from repair and overhaul of the said truck with interest rate of twelve (12) percent
until fully paid.

COURT OF APPEALS
ISSUE:
Whether or not the burning of the truck was a fortuitous event.

RULING:
The burning of the subject truck was impossible to foresee but not impossible to avoid. The
incident could have been prevented by immediately towing the truck to a motor shop for the
needed repair or by having it guarded day and night. Instead, the appellant just left the vehicle
where its transfer case broke down.

In order for a fortuitous event to exempt one from liability, it is necessary that one has committed
no negligence or misconduct that may have occasioned the loss. An act of God cannot be invoked
to protect a person who has failed to take steps to forestall the possible adverse consequences
of such a loss. One’s negligence may have concurred with an act of God in producing damage and
injury to another; nonetheless, showing that the immediate or proximate cause of the damage
or injury was a fortuitous event would not exempt one from liability. When the effect is found to
be partly the result of a person’s participation – whether by active intervention, neglect or failure
to act – the whole occurrence is humanized and removed from the rules applicable to act of God.

SUPREME COURT
ISSUE:
Whether or not the petitioner liable to pay attorney’s fees.

RULING:
The petition is partly meritorious; the award of attorney’s fees should be deleted.

WHEREFORE, the Petition is DENIED, but the assailed COURT OF APPEALS Decision is MODIFIED
by DELETING the award of attorney’s fees. Costs against petitioner.
ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION, Petitioner,
vs.
PHILIPPINE COMMERCIAL INTERNATIONAL BANK, Respondent.
G.R. No. 153827 – April 25, 2006
[Garcia, J.:]

FACTS:

Respondent PCIBank filed a complaint for a sum of money with prayer for a writ of preliminary
against petitioner ASIAKONSTRUKT on 24th day of February 1999. On various occasions, Asian
Construction and Development Corporation or “ASIAKONSTRUKT” obtained U.S dollar
denominated credit accommodations from Philippine Commercial International Bank (PCIB),
exclusive of interest, charges and fees that is covered by a promissory note. In favor of PCIBank,
the promissory notes are secured by the deeds of Assignment of Receivables executed by
ASIAKONSTRUKT with terms and conditions stipulated. The first cause of action of complaint of
the respondent is due to noncompliance of petitioner to its outstanding obligation which was
already due and demandable. As a result, respondent referred the matter to counsel and thus
incur attorney’s fees and legal cost. The second cause of action was ASIAKONSTRUKT is guilty of
fraud in contracting the debt and in performance thereof. Due to fraudulent acts of
ASIAKONSTRUKT, respondent suffered damages of which the former held liable to pay the latter.

By way of defenses, petitioner admit that the material allegations of the complaint as regards its
indebtedness to PCIBank and its execution of the various deeds of assignment. It denies also for
lacks of knowledge sufficient to form a belief as to the truth thereof, the averments in the
complaint that it has not paid, despite demands, its due and demandable obligations, as well as
the amounts due to respondent. It likewise denies PCIBank’s allegation in the same complaint in
support of its prayer for a writ of preliminary attachment, particularly its having fraudulently
misappropriated for its own use the contract of proceeds under the contract mentioned in the
several deeds of assignment, claiming in this respect that it has still remaining receivables from
those contracts. The RTC rendered judgment ordering the petitioner to pay the respondent for
the outstanding obligation with interest, attorney’s fees and cost of suit through summary
judgment. The decision was affirmed by the Court of Appeals and modify only the awards of
attorney which reduced by CA.
 REGIONAL TRIAL COURT
ISSUE:
Whether or not the petitioner collected portion of the contract proceeds which bound to remit
to respondent.

RULING:
Through rendering its summary judgment, this court ordered the petitioner to pay the
respondent a sum of US$4553446.06 or equivalent in Philippine currency at the time of
payment with interest of 8.27% per annum until fully paid. Also, the petitioner held liable
to pay attorney’s fees and for the costs of suit.

COURT OF APPEAL
ISSUE:
Whether or not the award of attorney’s fees is exorbitant or unconscionable.

RULING:
In the light of all the foregoing, the appeal is partially granted. The decision appealed from is
affirmed with the modification that the award for attorney’s fees is reduced from P1,260,000.00
to P1,000,000.00.

SUPREME COURT
ISSUE:
Whether or not there is a genuine issue as to material fact of summary of judgment.

RULING:
We are not persuaded. Under rule 35 of the 1997 Rules of procedure, as amended, except as to
the amount of damages, when there is no genuine issue as to any material fact and the moving
is partly is entitled to a judgment as a matter of law, summary judgment may be allowed. A
genuine issue is an issue of fact which requires the presentation of evidence as distinguished
from a sham, fictitious, contrived or false claim. When the facts as pleaded appear uncontested
or undisputed, then there is no real or genuine issue or question as to the facts and summary
judgment is called for.

WHEREFORE, the assailed COURT OF APPEALS decision is AFFIRMED in toto and this petition is
DENIED for lack of merit. Cost against petitioner.