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L-69560 June 30, 1988 after deducting this amount, private respondent is still
indebted in the amount of P6.81 million.
THE INTERNATIONAL CORPORATE BANK
INC., petitioner, On November 17, 1982, private respondent filed a
vs. complaint with the trial court against petitioner for
THE IMMEDIATE APPELLATE COURT, HON. ZOILO annulment of the sheriff's sale of the mortgaged
AGUINALDO, as presiding Judge of the Regional properties, for the release to her of the balance of her
Trial Court of Makati, Branch 143, NATIVIDAD M. loan from petitioner in the amount of P30,000,000,00,
FAJARDO, and SILVINO R. PASTRANA, as Deputy and for recovery of P1,062,063.83 representing the
and Special Sheriff, respondents. proceeds of her money market investment and for
damages. She alleges in her complaint, which was
subsequently amended, that the mortgage is not yet
due and demandable and accordingly the foreclosure
was illegal; that per her loan agreement with petitioner
PARAS, J.: she is entitled to the release to her of the balance of
the loan in the amount of P30,000,000.00; that
This is a petition for review on certiorari of the Decision petitioner refused to pay her the proceeds of her
of the Court of Appeals dated October 31, 1984 in AC- money market placement notwithstanding the fact that
G.R. SP No. 02912 entitled "THE INTERNATIONAL it has long become due and payable; and that she
CORPORATE BANK, INC. v. Hon. ZOILO AGUINALDO, et suffered damages as a consequence of petitioner's
al.," dismissing petitioner's petition for certiorari illegal acts.
against the Regional Trial Court of Makati (Branch 143)
for lack of merit, and of its Resolution dated January 7, In its answer, petitioner denies private respondent's
1985, denying petitioner's motion for reconsideration allegations and asserts among others, that it has the
of the aforementioned Decision. right to apply or set off private respondent's money
market claim of P1,062,063.83. Petitioner thus
Petitioner also prays that upon filing of the petition, a interposes counterclaims for the recovery of
restraining order be issued ex-parte, enjoining P5,763,741.23, representing the balance of its
respondents or any person acting in their behalf, from deficiency claim after deducting the proceeds of the
enforcing or in any manner implementing the Order of money market placement, and for damages.
the respondent trial court dated February 13 and
March 9, 1984, and January 10 and January 11, 1985. The trial court subsequently dismissed private
respondent's cause of action concerning the annulment
The facts of this case, as found by the trial court and of the foreclosure sale, for lack of jurisdiction, but left
subsequently adopted by the Court of Appeals, are as the other causes of action to be resolved after trial.
follows: Private respondent then filed separate complaints in
Manila and in Bulacan for annulment of the foreclosure
In the early part of 1980, private respondent secured sale of the properties in Manila and in Bulacan,
from petitioner's predecessors-in-interest, the then respectively.
Investment and Underwriting Corp. of the Philippines
and Atrium Capital Corp., a loan in the amount of On December 15, 1983, private respondent filed a
P50,000,000.00. To secure this loan, private motion to order petitioner to release in her favor the
respondent mortgaged her real properties in Quiapo, sum of P1,062,063.83, representing the proceeds of
Manila and in San Rafael, Bulacan, which she claimed the money market placement, at the time when she
have a total market value of P110,000,000.00. Of this had already given her direct testimony on the merits of
loan, only the amount of P20,000,000.00 was approved the case and was being cross-examined by counsel. On
for release. The same amount was applied to pay her December 24, 1983, petitioner filed an opposition
other obligations to petitioner, bank charges and fees. thereto, claiming that the proceeds of the money
Thus, private respondent's claim that she did not market investment had already been applied to partly
receive anything from the approved loan. satisfy its deficiency claim, and that to grant the
motion would be to render judgment in her favor
On September 11, 1980, private respondent made a without trial and make the proceedings moot and
money market placement with ATRIUM in the amount academic. However, at the hearing on February 9,
of P1,046,253.77 at 17% interest per annum for a 1984, counsel for petitioner and private respondent
period of 32 days or until October 13, 1980, its jointly manifested that they were submitting for
maturity date. Meanwhile, private respondent allegedly resolution said motion as well as the opposition thereto
failed to pay her mortgaged indebtedness to the bank on the basis of the pleadings and of the evidence
so that the latter refused to pay the proceeds of the which private respondent had already presented.
money market placement on maturity but applied the
amount instead to the deficiency in the proceeds of the On February 13, 1984, respondent judge issued an
auction sale of the mortgaged properties. With Atrium order granting the motion, as follows:
being the only bidder, said properties were sold in its
favor for only P20,000,000.00. Petitioner claims that IN VIEW OF THE FOREGOING, the
defendant International Corporate Bank
Page 1 of 14
is hereby ordered to deliver to the finally decide that private respondent is not entitled to
plaintiff Natividad M. Pajardo the the return of said amount (CA Decision, Rello, pp. 112-
amount of P1,062,063.83 covered by 114).
the repurchase agreement with Serial
No. AOY-14822 (Exhibit "A'), this The dispositive portion of the aforementioned Decision
amount represented the principal of reads:
P1,046,253.77 which the plaintiff held
including its interest as of October 13,
1980, conditioned upon the plaintiff ... We hold that the respondent court
filing a bond amount to P1,062,063.83 cannot be successfully charged with
to answer for all damages which the grave abuse of discretion amounting to
said defendant bank may suffer in the lack of jurisdiction when it issued its
event that the Court should finally Orders of February 13, 1984 and March
decide that the plaintiff was not 9, 1984, based as they are on a correct
entitled to the said amount. appreciation of the import of the
parties' evidence and the applicable
law.
Petitioner filed a motion for reconsideration to the
aforesaid order, asserting among other things that said
motion is not verified, and therefore a mere scrap of IN VIEW WHEREOF, the petition is
paper. Private respondent however manifested that dismissed for lack of merit and the
since she testified in open court and was cross- temporary restraining order issued by
examined by counsel for petitioner on the motion for this Court on March 22, 1984 is lifted.
release of the proceeds of the money market (Ibid., p. 114).
placement, the defect had already been cured. On
March 9, 1984, the respondent judge issued an order Petitioner moved for the reconsideration of the above
denying petitioner's motion for reconsideration. (CA decision (Annex "S", Rollo, pp. 116-124), but for the
Decision, Rollo, pp. 109-111). reason that the same failed to raise any issue that had
not been considered and passed upon by the
On March 13, 1984, petitioner filed a special civil action respondent Court of Appeals, it was denied in a
for certiorari and prohibition with preliminary injunction Resolution dated January 7, 1985 (CA Resolution, Rollo,
with the Court of Appeals, (a) for the setting aside and p. 126).
annulment of the Orders dated February 13, 1984 and
March 9,1984, issued by the respondent trial court, and Having been affirmed by the Court of Appeals, the trial
(b) for an order commanding or directing the court issued a Writ of Execution to implement its Order
respondent trial judge to desist from enforcing and/or of February 13, 1984 (Annex "BB", Rollo, p. 188) and
implementing and/or executing the aforesaid Orders. by virtue thereof, a levy was made on petitioner's
The temporary restraining order prayed for was issued personal property consisting of 20 motor vehicles
by respondent Court of Appeals on March 22, 1984. (Annex "U", Rollo, p. 127).
(Please see CA Decision, Rollo, p. 114, last paragraph).
On January 9, 1985, herein private respondent (then
In a decision rendered on October 31, 1984 (Rollo, pp. plaintiff) filed in the trial court an ex-parte motion
109-14), the Court of Appeals dismissed said petition praying that the four branches of the petitioner such
finding—(a) that while the Motion for the release of the as: Baclaran Branch, Paranaque, Metro Manila; Ylaya
proceeds of the money market investment in favor of Branch, Divisoria, Metro Manila; Cubao Branch, Quezon
private respondent was not verified by her, that defect City and Binondo Branch, Sta. Cruz, Manila, be ordered
was cured when she testified under oath to to pay the amount of P250,000.00 each, and the main
substantiate her allegations therein: (b) that, petitioner office of the petitioner bank at Paseo de Roxas, Makati,
cannot validly claim it was denied due process for the Metro Manila, be ordered to pay the amount of
reason that it was given ample time to be heard, as it P62,063.83 in order to answer for the claim of private
was in fact heard when it filed an Opposition to the respondent amounting to P1,062,063.83.
motion and a motion for reconsideration; (c) that the
circumstances of this case prevent legal compensation Thereupon, on January 10, 1985, the trial court issued
from taking place because the question of whether an Order (Annex "V", Rollo, p. 129) granting the above-
private respondent is indebted to petitioner in the mentioned prayers.
amount of 6.81 million representing the deficiency
balance after the foreclosure of the mortgage executed
to secure the loan extended to her, is vigorously Acting on the ex-parte motion by the plaintiff (now
disputed; (d) that the release of the proceeds of the private respondent), the trial court, on January 11,
money market investment for private respondent will 1984, ordered the President of defendant International
not make the causes of action of the case pending Corporate Bank (now petitioner) and all its employees
before the trial court moot and academic nor will it and officials concemed to deliver to the sheriff the 20
cause irreparable damage to petitioner, private motor vehicles levied by virtue of the Writ of Execution
respondent having filed her bond in the amount of dated December 12, 1984 (Annex "W", Rollo, p. 131).
P1,062,063.83 to answer for all damages which the
former may suffer in the event that the court should
Page 2 of 14
The petitioner having failed to comply with the above- plaintiff's motion dated Dec. 15, 1983,
cited Order, the respondent trial court issued two (2) was inserted or added;
more Orders: the January 16, 1985 (Annex "CC," Rollo,
p. 190) and January 21, 1985 Orders (Annex "DD", c. in line 3, the phrases "Of
Rollo, p. 191), directing several employees mentioned attachment" and "ordered that a writ of
therein to show cause wily they should not be cited in attachment issue' were erased or
contempt. deleted;
Hence, this petition for review on certiorari with prayer d also in line 3 after the words "the
for a restraining order and for a writ of preliminary court has" the phrase "approved the
injunction. Motion was likewise inserted or added;
Three days after this petition was filed, or specifically e. in line 9, the phrase "and of the
on January 18, 1985, petitioner filed an urgent motion levying of said attachment" was also
reiterating its prayer for the issuance of an ex- erased or deleted;
parte restraining order (Rollo, p. 132).
f. in line 13, the word "attachment" was
Simultaneous with the filing of the present petition, likewise erased or deleted;
petitioner, as defendant, filed with the trial court
an ex-partemotion to suspend the implementation of
any and all orders and writs issued pursuant to Civil g. also in line 13 after the deletion of
Case No. 884 (Annex "A", Rollo, p. 135). word "attachment" the phrase "release
of the P1,062,063.83 to the plaintiff
was similarly inserted or added."
This Court's resolution dated January 21, 1985, without
giving due course to the petition, resolved (a) to
require the respondents to comment: (b) to issue, Petitioner contended therein that in view of the
effective immediately and until further orders from this foregoing facts, the genuineness, due execution and
Court, a Temporary Restraining Order enjoining the authenticity as well as the validity and enforceability of
respondents from enforcing or in any manner the bond (Rello, p. 174) is now placed in issue and
implementing the questioned Orders dated February consequently, the bond may successfully be
13, 1984, March 9, 1984, January 10, 1985 and January repudiated as falsified and, therefore, without any
11 and 16, 1985, issued in Civil Case No. 884. force and effect and the bonding company may
thereby insist that it has been released from any
hability thereunder.
The corresponding writ was issued on the same day
(Rollo, pp. 139-140).
Also, petitioner pointed as error the respondent trial
court's motu proprio transferring Civil Case No. 884 to
As required, the Comment of private respondent was the Manila Branch of the same Court arguing that
filed on January 28, 1985 (Rollo, pp. 141- 150). improper venue, as a ground for, and unless raised in,
a Motion to Dismiss, may be waived by the parties and
Thereafter, petitioner moved for leave to file a the court may not pre-empt the right of the parties to
supplemental petition on the ground that after it had agree between or among themselves as to the venue
filed this present petition, petitioner discovered that of their choice in litigating their justiciable controversy
the bond filed with, and approved by, the respondent (Supplemental Petition, Rollo, p. 160).
lower court showed numerous material erasures,
alterations and/or additions (Rollo, p. 151), which the On being required to comment thereon, (Rollo, p. 192)
issuing insurance company certified as having been private respondent countered (Rollo, pp. 193-198) that
done without its authority or consent (Annex "Z", Rollo, bond forms are ready-prepared forms and the bonding
p. 178). company used the form for "Levying of Attachment"
because the company has no ready-prepared form for
The Supplemental Petition was actually filed on the kind of bond called for or required in Civil Case
February 1, 1985 (Rollo, pp. 154-171). It pointed out 884. Whatever deletions or additions appear on the
the erasures, alterations and/or additions in the bond bond were made by the Afisco Insurance Corporation
as follows: itself for the purpose of accomplishing what was
required or intended.
a. below "Civil Case No. 884" after the
words, "Plaintiff's Bond," the phrase Nonetheless, on May 7, 1985, private respondent filed
"For Levying of Attachment" was "Plaintiffs Bond" in the respondent trial court in the
erased or deleted; amount of P1,062,063.83 a xerox copy of which was
furnished this Court (Rollo, p. 219), and noted in the
b. in lines 2 and 3 after the word Court's Resolution dated May 29,1985 (Rollo, p. 225).
"order," the phrase "approving
Page 3 of 14
On March 11, 1985, petitioner was required to file a of law, even without the consent or
Consolidated Reply (Rollo, p. 199) which was filed on knowledge of the debtors." (Art. 1290,
April 10, 1985 (Rollo, p. 201). Civil Code). Article 1279 of the Civil
Code requires among others, that in
Thereafter, a Rejoinder (Rollo, p. 238) was filed by order that legal compensation shall
private respondent on September 18, 1985 after Atty. take place, "the two debts be due" and
Advincula, counsel for private respondents was "they be liquidated and demandable."
required by this Court to show cause why he should not Compensation is not proper where the
be disciplinarily dealt with or held in contempt for his claim of the person asserting the set-
failure to comply on time (Rollo, p. 226) and on August off against the other is not clear nor
19, 1985 said lawyer was finally admonished (Rollo, p. liquidated; compensation cannot
229) for his failure to promptly apprise the Court of his extend to unliquidated, disputed claim
alleged non-receipt of copy of petitioner's reply, which arising from breach of contract.
alleged non-receipt was vehemently denied by (Compañia General de Tabacos vs.
petitioner in its Counter Manifestation (Rollo, p. 230) French and Unson, 39 Phil. 34; Lorenzo
filed on August 5, 1985. & Martinez vs. Herrero, 17 Phil. 29).
Finally, on October 7, 1985, this petition was given due There can be no doubt that petitioner
course and both parties were required to submit is indebted to private respondent in the
simultaneous memoranda (Rollo, p. 249) but before the amount of P1,062,063.83 representing
same were filed, petitioner moved for leave to file sur- the proceeds of her money market
rejoinder (Rollo, p. 250), the sur-rejoinder was filed on investment. This is admitted. But
October 14,1985 (Rollo, pp. 252-254). whether private respondent is indebted
to petitioner in the amount of P6.81
million representing the deficiency
Petitioner's memorandum was filed on December 28, balance after the foreclosure of the
1985 (Rollo, pp. 264-292) while that of private mortgage executed to secure the loan
respondent was submitted on January 10, 1986 (Rollo, extended to her, is vigorously disputed.
pp. 295-304). This circumstance prevents legal
compensation from taking place. (CA
Petitioner again moved for leave to file a Reply Decision, Rollo, pp. 112-113).
Memorandum (Rollo, p. 307) which, despite permission
from this Court, was not filed and on August 22, 1986, It must be noted that Civil Case No. 83-19717 is still
private respondent prayed for early resolution of the pending consideration at the RTC Manila, for
petition (Rollo, p. 311). annulment of Sheriffs sale on extra-judicial foreclosure
of private respondent's property from which the
In a resolution dated October 13, 1986 (Rollo, p. 314) alleged deficiency arose. (Annex "AA", Rollo, pp. 181-
this case was transferred to the Second Division of this 189). Therefore, the validity of the extrajudicial
Court, the same being assigned to a member of that foreclosure sale and petitioner's claim for deficiency
Division. are still in question, so much so that it is evident, that
the requirement of Article 1279 that the debts must be
The crucial issue to be resolved in this case is whether liquidated and demandable has not yet been met. For
or not there can be legal compensation in the case at this reason, legal compensation cannot take place
bar. under Article 1290 of the Civil Code.
Petitioner contends that after foreclosing the Petitioner now assails the motion of the plaintiff (now
mortgage, there is still due from private respondent as private respondent) filed in the trial court for the
deficiency the amount of P6.81 million against which it release of the proceeds of the money market
has the right to apply or set off private respondent's investment, arguing that it is deficient in form, the
money market claim of P1,062,063.83. same being unverified (petitioner's Memorandum,
Rollo, p. 266). On this score, it has been held that "as
enjoined by the Rules of Court and the controlling
The argument is without merit. jurisprudence, a liberal construction of the rules and
the pleadings is the controlling principle to effect
As correctly pointed out by the respondent Court of substantial justice." (Maturan v. Araula, 111 SCRA 615
Appeals — [1982]).
Compensation shall take place when Finally, the filing of insufficient or defective bond does
two persons, in their own right, are not dissolve absolutely and unconditionally the
creditors and debtors of each other. injunction issued. Whatever defect the bond possessed
(Art. 1278, Civil Code). "When all the was cured when private respondent filed another bond
requisites mentioned in Art. 1279 of in the trial court.
the Civil Code are present,
compensation takes effect by operation
Page 4 of 14
PREMISES CONSIDERED, the questioned Decision and FOURTH: The Honorable Court of
Resolution of the respondent Court of Appeals are Appeals erred in not declaring as null
hereby AFFIRMED. and void the extra-judicial foreclosure
undertaken by Metrobank on the
SO ORDERED. property of Sps. Marcial See and Lilian
Tan. 2
Yap, C.J., Melencio-Herrera and Padilla, JJ., concur.
The facts as found by public respondent Court
of Appeals are as follows:
G.R. No. 118585 September 14, 1995
It is not disputed that Ylang-Ylang
AJAX MARKETING & DEVELOPMENT Merchandising Company, a partnership
CORPORATION, ANTONIO TAN, ELISA TAN, TAN between Angelita Rodriguez and
YEE, and SPS. MARCIAL SEE and LILIAN Antonio Tan, obtained a loan in the
TAN, petitioners, amount of P250,000.00 from the
vs. Metropolitan Bank and Trust Company,
HON. COURT OF APPEALS, METROPOLITAN BANK and to secure payment of the same,
AND TRUST COMPANY, and THE SHERIFF OF spouses Marcial See and Lilian Tan
MANILA,respondents. constituted a real estate mortgage in
favor of said bank over their property
in the District of Paco, Manila, covered
by TCT No. 105233 of the Registry of
Deeds of Manila. The mortgage was
FRANCISCO, J.:
annotated at the back of the title.
In their interrelated first and second assignment of That for and in consideration of credit
errors, petitioners argue that a novation occurred when accommodations obtained from the
their three (3) loans, which are all secured by the same MORTGAGEE (Metropolitan Bank and
real estate property covered by TCT No. 105233 were Trust Company), by the MORTGAGOR
consolidated into a single loan of P1 million under and/or AJAX MKTG. DEV. CORP./AJAX
Promissory Note No. BDS-3605, thereby extinguishing MARKETING COMPANY/YLANG-YLANG
their monetary obligations and releasing the MERCHANDISING COMPANY detailed as
mortgaged property from liability. follows:
Page 7 of 14
the decision of the Municipal Trial Court, Antipolo, Check No.
Rizal, 3ordering respondent Rene G. Diaz to vacate the 301249
condominium unit owned by petitioner and to pay back
current rentals, attorney's fees and costs.1âwphi1.nêt April 4, 1992
De Leon appealed from the said decision insofar as it Undoubtedly, petitioner admits the validity of its
directed partial compensation and its failure to award outstanding accounts with private respondent in the
interest on his principal claim as well as attomey's fees amount of P 22,213.75 as contained in its answer. But
in his favor. In a decision dated March 1 7, 1986, 3 whether private respondent is liable to pay the
respondent Intermediate Appellate Court 4 set aside petitioner a 20% margin or commission on the subject
the decision of the lower court and dismissed herein sale to Dole Philippines, Inc. is vigorously disputed.
petitioner's (therein defendant- appellee's) This circumstance prevents legal compensation from
counterclaim for lack of factual or legal basis. The taking place.
appellate court found that there was no agreement,
verbal or otherwise, nor was there any contractual The Court agrees with respondent appellate court that
obligation between De Leon and Silahis prohibiting any there is no evidence on record from which it can be
direct sales to Dole Philippines, Inc. by de Leon; nor inferred that there was any agreement between the
was there anything in the debit memo obligating de petitioner and private respondent prohibiting the latter
Leon to pay a commission to Silahis for the sale of P from selling directly to Dole Philippines, Incorporated.
111,000.00 worth of sprockets to Dole Philippines Definitely, it cannot be asserted that the debit memo
although in the past, the former did supply certain was a contract binding between the parties considering
items to the latter for delivery to Dole Philippines, that the same, as correctly found by the appellate
Incorporated. court, was not signed by private respondent nor was
there any mention therein of any commitment by the
Hence, in this petition for review on certiorari, the latter to pay any commission to the former involving
central issue is whether or not private respondent is the sale of sprockets to Dole Philippines, Inc. in the
liable to the petitioner for the commission or margin for amount of P 111,000.00. Indeed, such document can
the direct sale which the former concluded and be taken as self-serving with no probative value absent
consummated with Dole Philippines, Incorporated a showing or at the very least an inference, that the
without coursing the same through herein petitioner. party sought to be bound assented to its contents or
showed conformity thereto.
Page 11 of 14
In fact the letter written by private respondent's lawyer following amounts of money issuing to them
dated March 5,1975 7 in reply to petitioner's letter the following time deposit certificates:
dated February 19, 1976 transmitting its Debit Memo
No. 1695 8 further strengthens private respondent's
stand that it never agreed to give petitioner any Name Time Deposit Amount
commission on the direct sale to Dole Philippines, Inc. Cert. No.
by its company because said letter denied any
utilization of petitioners personnel and facilities at its Ma. Patricia Garcia 1275 P35,000
Davao Branch in the transaction with Dole Philippines,
Nicanor Gutierrez 1276 40,000
Inc. which would otherwise lend a basis for petitioner's
monetary claim. Belen B. Gutierrez 1277 35,000
WHEREFORE, in view of the foregoing, the questioned Grace M.B. 1278 40,000
decision of respondent appellate court is hereby Gutierrez
AFFIRMED.
Caroline M. B. 1279 35,000
Gutierrez
SO ORDERED.
Gerwin Garcia 1280 33,000
Gutierrez, Jr., Feliciano and Cortes, JJ., concur.
Gerson Garcia 1281 35,788
Bidin, J., took no part. Gilmer Garcia 1282 30,000
'6. Since no applications for withdrawal were II. THE COURT OF APPEALS HAS DECIDED A
received by defendant bank from its depositors QUESTION OF SUBSTANCE NOT IN ACCORD
named in paragraph 3 of the complaint, there WITH LAW AND APPLICABLE DECISIONS OF THE
was no reason at all to allow alleged attorney- SUPREME COURT IN NOT ORDERING
in-fact, Florencio Junior Garcia, who never was RESPONDENT COURT TO GRANT THE MOTION
properly authorized, to transact for and in FOR SUMMARY JUDGMENT.5
behalf of said depositors;
The Petition is devoid of merit.
'7. The herein attorney-in-fact, Florencio Junior
Garcia, has no capacity to sue and be sued, Sections 1 and 3, Rule 34, of the Rules of Court
being not the real party interest (sic) nor has provide:
the (sic) authority from the alleged plaintiffs
sue (sic) and be sued;
"SECTION 1. Summary judgment for claimant. -
A party seeking to recover upon a claim,
8. There was no valid or legal withdrawal made counterclaim, or cross-claim or to obtain a
by the alleged plaintiffs of their alleged declaratory relief may, at any time after the
deposits, hence it was not legally possible for pleading in answer thereto has been served,
defendant bank to act with respect to such move with supporting affidavits for a summary
deposits in view of the prohibition mandated by judgment in his favor upon all or any part
the law on secrecy of deposits.'"3 thereof."
Page 13 of 14
"SEC. 3. Motion and proceedings thereon. - The Verily, there is a need to find out whether Florencio
motion shall be served at least ten (10) days Junior Garcia was duly authorized by the plaintiffs
before the time specified for the hearing. The named in Civil Case No. 3777 to file the complaint
adverse party prior to the day of hearing may against the private respondents. It is worthy to note
serve opposing affidavits. After the hearing, that while the complaint states that the plaintiffs
the judgment sought shall be rendered therein mentioned empowered Florencio Junior Garcia
forthwith if the pleading, depositions, and to collect the sums due them from the respondent
admissions on file together with the affidavits, bank, the records on hand show that only four9 of the
show that, except as to the amount of eight plaintiffs executed a special power of attorney
damages, there is no genuine issue as to any authorizing Florencio Junior Garcia to deal with
material fact and that the moving party is respondent bank. Contrarily, it is argued that the
entitled to a judgment as a matter of law." * absence of a special power of attorney to withdraw the
time deposit is of no moment, considering that the
A summary judgment is one granted upon motion by a present case for collection in the name of the plaintiffs
party for an expeditious settlement of the case, there sufficiently shows the latter's intention to collect their
appearing from the pleadings, depositions, admissions, money through Florencio Junior Garcia. Apparently, the
and affidavits that there are no important questions or foregoing theory is meritorious. But the undeniable
issues of fact posed (except as to the amount of fact, however, is that not one of the plaintiffs verified
damages) and therefore, the moving party is entitled the contents of the complaint; and neither was there in
to a judgment as a matter of law.6 the records a special power of attorney authorizing
Florencio Junior Garcia to institute the present case
against private respondents. Thus the issue of whether
The aforecited rule does not vest in the trial court or not the plaintiffs named in Civil Case No. 3777,
jurisdiction to summarily try the issues on depositions constituted Florencio Junior Garcia as their attorney in
and affidavits but gives it limited authority to render fact with authority to bring subject suit for collection of
summary judgment only when there is no genuine sum of money against the private respondents.
issue of material fact at bar. Upon a motion for
summary judgment, the sole function of the court is to
determine whether or not there is an issue of fact to be Then too, the issue of whether or not petitioners have
tried, and any doubt as to the existence of an issue of a cause of action against the spouses, Rafael Dinglasan
fact must be resolved against the movant. Courts are and Maria Elena Dinglasan, calls for a trial on the
quite critical of the papers presented by the moving merits. While the said respondent spouses insist that
party but not of the papers in opposition thereto. Thus, there is no privity of contract between them and the
in ruling on a motion for summary judgment, the court petitioners, the latter claim that the former "prevailed
should take that view of the evidence most favorable upon them" to time deposit their money with the
to the party against whom it is directed, giving such respondent bank. Indeed, it is only upon presentation
party the benefit of all favorable inferences. That one of evidence during the trial can it be determined
may surmise from plaintiff's showing that defendant is whether the respondent spouses may be held jointly
unlikely to prevail upon a trial is not a sufficient basis and severally liable with respondent bank.
to assume that the allegations of defendant are sham,
frivolous or unsubstantial. If the defense relied upon by Premises studiedly considered and viewed in proper
the defendant is legally sufficient and does not appear perspective, the Court is of the ineluctable conclusion,
patently sham, the motion for summary judgment and so holds, that the Court of Appeals erred not in
should be denied.7 affirming the Order, dated March 30, 1993, of Branch
9, Regional Trial Court of Kalibo, Aklan, in Civil Case
In the case under consideration, the pleadings and No. 3777.
exhibits on record reveal that there exist genuine
issues on material or pertinent facts sufficient to WHEREFORE, the Petition is DENIED; and the Decision
preclude a rendition of summary judgment. As of the Court of Appeals, dated August 31, 1994, in CA-
correctly found by the Court of Appeals, the pleadings G.R. SP. No. 31231 AFFIRMED. No Pronouncement as to
submitted below by the parties raise the following costs.
issues:
SO ORDERED.
"1. Whether or not Florencio Junior Garcia is
properly authorized to file the complaint for the Melo, (Chairman), Vitug, Panganiban, and Gonzaga-
plaintiffs named in the title of the complaint. Reyes, JJ., concur.
Page 14 of 14