GR 119800; (November, 2003) (Digest)
G.R. No. 119800; November 12, 2003
FILIPINAS TEXTILE MILLS, INC. and BERNARDINO VILLANUEVA, Petitioners, vs. COURT OF APPEALS and STATE INVESTMENT HOUSE, INC., Respondents.
FACTS
Respondent State Investment House, Inc. (SIHI) filed a complaint for collection against petitioners Filipinas Textile Mills, Inc. (Filtex) and its officer, Bernardino Villanueva. SIHI alleged it issued domestic letters of credit to finance Filtex’s purchase of raw materials. Upon delivery, the suppliers drew sight drafts accepted by Filtex, which were then negotiated to and paid by SIHI. To secure the obligation, Villanueva executed a comprehensive surety agreement, and Filtex executed trust receipts covering the merchandise, agreeing to hold them in trust for SIHI and to remit the proceeds of any sale. Due to Filtex’s alleged failure to pay the outstanding balance despite demand, SIHI sought to enforce the solidary liability of the petitioners.
In their respective Answers, Filtex and Villanueva interposed defenses including full payment of the obligation and lack of cause of action. Crucially, however, they failed to specifically deny under oath the genuineness and due execution of the actionable documents upon which SIHI’s complaint was based, namely the letters of credit, sight drafts, trust receipts, and the surety agreement. The trial court ruled in favor of SIHI, a decision affirmed by the Court of Appeals.
ISSUE
Whether the Court of Appeals erred in admitting in evidence the actionable documents and in holding petitioners solidarily liable for the debt.
RULING
The Supreme Court denied the petition and affirmed the assailed decisions. The Court held that petitioners’ failure to specifically deny under oath the genuineness and due execution of the actionable documents, as required under Section 7, Rule 8 of the Rules of Court, constituted an implied admission of their authenticity. This procedural rule is mandatory. Consequently, petitioners were deemed to have admitted the documents, precluding them from later challenging their admissibility on the ground of alleged lack of documentary stamps. The defense of non-payment of documentary stamp tax, which would render a document inadmissible in evidence, is an affirmative defense that must be specifically pleaded. Petitioners did not properly raise this in their pleadings. Having admitted the documents and the obligations contained therein, petitioners’ liability was established. The comprehensive surety agreement clearly made Villanueva a solidary guarantor, and the trust receipts established Filtex’s duty to account for the goods or their proceeds. The Court found no merit in the claim of full payment, as the records showed a substantial unpaid balance. Thus, the solidary liability of the petitioners was upheld.