G.R. No. L-15861; April 15, 1961
Lim Giok, plaintiff-appellee, vs. Bataan Cigar & Cigarette Factory, Inc., defendant-appellant.

FACTS

Plaintiff Lim Giok filed an action to recover P6,032.02 from defendant Bataan Cigar & Cigarette Factory, Inc. In its answer, the defendant admitted an obligation of P5,250.12 to the plaintiff, for which it had prepared a check. However, the defendant simultaneously alleged a crucial countervailing claim. It asserted that the plaintiff had submitted an accounting showing he possessed P74,298.80 in unremitted cash collections from the defendant and had failed to turn over this sum.
Based solely on the defendant’s judicial admission of the P5,250.12 debt, the plaintiff moved for judgment on the pleadings. The defendant opposed the motion, contending that its answer tendered a genuine, triable issue. The trial court overruled the objection and granted the motion, ordering the defendant to pay the admitted amount.

ISSUE

Whether the trial court correctly rendered a judgment on the pleadings despite the defendant’s answer tendering an issue.

RULING

No. The Supreme Court reversed the decision and remanded the case for trial. The ruling is grounded on the procedural rule that a judgment on the pleadings is proper only when the answer fails to tender an issue or admits all the material allegations of the complaint. It is improper where the answer raises a genuine issue requiring the presentation of evidence.
The Court’s legal logic is clear: while the defendant admitted a specific monetary obligation, this admission was not an unqualified concession granting the plaintiff an immediate cause of action. The answer qualified the admission by alleging the plaintiff’s failure to account for and deliver a substantially larger sum (P74,298.80) belonging to the defendant. This allegation directly contested the plaintiff’s right to recover any payment without first settling his own alleged larger liability. This created a genuine issue of fact—whether the plaintiff was indeed holding funds that should be set off against the admitted debt. This issue is material and controvertible; it cannot be resolved merely by examining the pleadings but necessitates a full trial on the merits for the proper ventilation of evidence. Therefore, the lower court erred in cutting short the proceedings via judgment on the pleadings.