GR 168289; (March, 2010) (Digest)
G.R. No. 168289; March 22, 2010
THE MUNICIPALITY OF HAGONOY, BULACAN, represented by the HON. FELIX V. OPLE, Municipal Mayor, and FELIX V. OPLE, in his personal capacity, Petitioners, vs. HON. SIMEON P. DUMDUM, JR., in his capacity as the Presiding Judge of the REGIONAL TRIAL COURT, BRANCH 7, CEBU CITY; HON. CLERK OF COURT & EX-OFFICIO SHERIFF of the REGIONAL TRIAL COURT of CEBU CITY; HON. CLERK OF COURT & EX-OFFICIO SHERIFF of the REGIONAL TRIAL COURT of BULACAN and his DEPUTIES; and EMILY ROSE GO KO LIM CHAO, doing business under the name and style KD SURPLUS, Respondents.
FACTS
Private respondent Emily Rose Go Ko Lim Chao (doing business as KD Surplus) filed a Complaint for collection of a sum of money and damages against the Municipality of Hagonoy, Bulacan and its then Mayor, Felix V. Ople. She alleged that in mid-2000, Ople contacted her to deliver motor vehicles for municipal developmental projects, representing that funds were allocated. Relying on this, she delivered twenty-one motor vehicles valued at ₱5,820,000.00 from Cebu City, as evidenced by bills of lading consigned to the municipality. Despite deliveries, Ople ignored her claims for payment, with the obligation reaching ₱10,026,060.13 exclusive of penalties and damages. The trial court granted her application for a writ of preliminary attachment.
Petitioners filed a Motion to Dismiss on the ground that the claim was unenforceable under the Statute of Frauds due to the absence of a written contract. They argued that such contracts require public bidding and municipal council approval, which did not occur. They also filed a Motion to Dissolve/Discharge the Writ of Preliminary Attachment, invoking state immunity from suit, unenforceability of the contract, and lack of substantiated fraud allegations. The trial court denied both motions. Petitioners elevated the matter via certiorari to the Court of Appeals, which affirmed the trial court’s orders. Their motion for reconsideration was denied, partly because it was filed by an unauthorized counsel. Hence, this petition.
ISSUE
1. Whether the trial court committed grave abuse of discretion in denying the Motion to Dismiss based on the unenforceability of the contract under the Statute of Frauds.
2. Whether the trial court committed grave abuse of discretion in denying the Motion to Dissolve/Discharge the Writ of Preliminary Attachment, particularly in light of the municipality’s immunity from suit.
RULING
1. On the Motion to Dismiss: The trial court did not commit grave abuse of discretion. The Statute of Frauds (Article 1403(2) of the Civil Code) requires certain contracts to be evidenced by a note or memorandum to be enforceable, but it does not invalidate unwritten contracts if essential requisites are present. Its purpose is to prevent fraud by requiring written evidence. An action on such a contract may be dismissed unless there has been total or partial performance. In this case, private respondent alleged performance of her obligation by delivering the vehicles, supported by bills of lading naming the municipality as consignee. This allegation of partial performance hypothetically admitted in a motion to dismiss excludes the contract from the Statute of Frauds’ coverage for dismissal purposes. Petitioners’ defense—that no contract could exist without bidding or council approval—is a matter of evidence to be ventilated at trial, not a ground for dismissal at the pleading stage. Thus, the denial of the motion to dismiss was proper.
2. On the Motion to Dissolve/Discharge the Writ of Preliminary Attachment: The trial court did not commit grave abuse of discretion. The doctrine of state immunity from suit is not absolute. A municipality may be sued when it enters into a contract in its proprietary capacity (as opposed to governmental). The contract for the purchase of motor vehicles is proprietary in nature, as it involves commercial transactions. Thus, the municipality may be sued, and the writ of preliminary attachment may properly issue if the grounds under the Rules of Court are present. Here, the complaint alleged fraud—that Ople misrepresented the availability of funds—which is a ground for attachment under Rule 57, Section 1(d). Since the allegations in the complaint and affidavit supporting the writ sufficiently alleged fraud, the issuance and non-dissolution of the writ were justified.
The Court of Appeals’ decision affirming the trial court’s orders is upheld. The petition is denied.