G.R. No. 118438 December 4, 1998
ALLIED AGRI-BUSINESS DEVELOPMENT CO., INC., petitioner, vs. COURT OF APPEALS and CHERRY VALLEY FARMS LIMITED, respondents.

FACTS

Respondent Cherry Valley Farms Limited (CHERRY VALLEY), a foreign company based in England, filed a complaint for collection of sum of money against petitioner Allied Agri-Business Development Co. Inc. (ALLIED) before the Regional Trial Court of Makati City. CHERRY VALLEY alleged that from 1 September 1982 to 16 February 1983, ALLIED purchased and received duck hatching eggs and ducklings valued at £51,245.12, which remained unpaid despite demands. ALLIED, through its president Ricardo Quintos, acknowledged the debt in a letter dated 8 October 1985. In its Answer, ALLIED denied the material allegations, contended that CHERRY VALLEY lacked capacity to sue, and claimed the letter from Quintos was unauthorized. CHERRY VALLEY then served a Request for Admission on ALLIED, seeking admission of specific facts, including the purchases, the demand letter, and Quintos’s acknowledgment of the debt. ALLIED filed Comments/Objections, arguing the matters requested were for CHERRY VALLEY to prove and that some requests were immaterial. The trial court issued an Order disregarding ALLIED’s objections for non-compliance with the Rules and directed ALLIED to answer within ten days. Upon ALLIED’s motion for reconsideration, the court denied it and granted a nonextendible five-day period to answer. ALLIED failed to submit a sworn answer. Consequently, CHERRY VALLEY filed a motion for summary judgment based on ALLIED’s implied admissions. The trial court granted the motion, ordering ALLIED to pay the amount with interest and attorney’s fees. The Court of Appeals affirmed the summary judgment but modified it by ordering payment in Philippine currency and deleting the award of attorney’s fees and costs. ALLIED filed the instant petition.

ISSUE

1. Whether respondent CHERRY VALLEY, as an unlicensed foreign corporation, lacked the legal capacity to sue.
2. Whether petitioner ALLIED’s failure to answer the Request for Admission resulted in an implied admission of the facts contained therein, justifying a summary judgment.

RULING

1. On the capacity to sue: The Supreme Court ruled that petitioner ALLIED is estopped from challenging the personality of CHERRY VALLEY after having acknowledged it by entering into a contract. The doctrine of lack of capacity to sue for failure to acquire a local license was not intended to favor domestic corporations who repudiate obligations after transacting with foreign firms.
2. On the implied admission and summary judgment: The Supreme Court affirmed the rulings of the lower courts. Under Section 2, Rule 26 of the Rules of Court, each matter in a request for admission is deemed admitted if the party served fails to file and serve a sworn statement denying it or setting forth reasons why it cannot admit or deny, within the designated period. ALLIED’s failure to submit a sworn answer to the Request for Admission within the period granted by the trial court resulted in an implied admission of all the material facts stated therein. These admitted facts showed no genuine issue as to any material fact, making summary judgment proper. The purpose of the rule on requests for admission is to expedite trial and relieve parties of proving undisputed facts.
WHEREFORE, the Petition is DENIED. The decision of the Court of Appeals is AFFIRMED.