G.R. No. 175514 ; February 14, 2011
PHILIPPINE BANK OF COMMUNICATIONS, Petitioner, vs. SPOUSES JOSE C. GO and ELVY T. GO, Respondents.

FACTS

On September 30, 1999, respondent Jose C. Go obtained two loans from petitioner Philippine Bank of Communications (PBCom), evidenced by promissory notes for ₱17,982,222.22 and ₱80 million, payable within ten years. The loans were secured by two pledge agreements covering shares of stock in Ever Gotesco Resources and Holdings, Inc. In 2001, the market value of the pledged shares plummeted. PBCom renounced the pledge agreements and filed a complaint for sum of money against the Spouses Go, alleging default for having paid only three interest installments and making the entire balance due and demandable. In their Answer, the Spouses Go denied material allegations, asserted the loan was payable by 2009 and thus not yet due, claimed substantial payments were made requiring accounting, denied any demand for settlement, and argued the renunciation of the pledge was unfair and speculative as stock prices fluctuate. PBCom filed a motion for summary judgment, contending the Answer contained no specific denials and raised no genuine issues. The Regional Trial Court granted the motion and rendered judgment in favor of PBCom. The Court of Appeals reversed, finding that the Answer raised genuine issues of fact (such as default, the exact amount due, and prior demand) and remanded the case for trial.

ISSUE

Whether the Court of Appeals erred in ruling that genuine issues as to material facts exist, thereby making the grant of summary judgment by the trial court improper.

RULING

The Supreme Court DENIED the petition and AFFIRMED the decision of the Court of Appeals. Summary judgment is proper only when there is no genuine issue as to any material fact. The Court held that the Spouses Go’s Answer, read as a whole, tendered genuine factual issues. While they admitted the execution of the loan documents and the promissory notes’ terms, they specifically denied the allegations of default and the acceleration of the entire obligation. They posited that the loan maturity was in 2009, claimed to have made substantial payments necessitating an accounting, and explicitly denied receiving any demand for payment. These defenses, coupled with their challenge to PBCom’s unilateral renunciation of the pledge agreements, presented factual controversies regarding the performance of the obligation, the occurrence of a resolutory condition, and the validity of PBCom’s actions. These issues required the presentation of evidence and could not be resolved summarily based solely on the pleadings and documents. The trial court therefore erred in granting summary judgment. The case was ordered to proceed to trial on the merits.