GR 171873; (July, 2010) (Digest)
G.R. No. 171873 ; July 9, 2010
Municipality of Tiwi, represented by Hon. Mayor Jaime C. Villanueva and the Sangguniang Bayan of Tiwi, Petitioners, vs. Antonio B. Betito, Respondent.
FACTS
The Municipality of Tiwi engaged the legal services of respondent Atty. Antonio Betito under a contingent fee contract to recover its share of real property taxes from the National Power Corporation (NPC). The fees were set at 10% of any amount recovered. Through legal efforts, including securing a favorable opinion from the Office of the President, Tiwi successfully compelled NPC to directly remit its share. Tiwi subsequently received substantial tax shares but refused to pay respondent’s contingent fee. Respondent filed a complaint for collection of sum of money and damages. Petitioners filed an Answer, and respondent moved for a judgment on the pleadings, arguing the Answer failed to tender genuine issues. The Regional Trial Court granted the motion and ordered petitioners to pay the fee. The Court of Appeals affirmed.
ISSUE
Whether the trial court correctly rendered a judgment on the pleadings.
RULING
No, the trial court erred. A judgment on the pleadings is proper only when the answer fails to tender any genuine issue, admitting all material allegations of the complaint. Here, petitioners’ Answer did tender genuine factual and legal issues that required a full trial. Specifically, the Answer challenged the validity and enforceability of the contingent fee contract itself. Petitioners alleged the contract was void for being contrary to law, morals, and public policy, arguing it incentivized unnecessary litigation. They further contended the contract violated the Local Government Code, which mandates the municipal legal officer to handle such legal matters, implying the hiring of a private lawyer was improper. These assertions constituted specific denials and affirmative defenses that went beyond mere conclusions of law. By raising the contract’s validity, petitioners placed in issue the very foundation of respondent’s claim. The resolution of such a challenge necessitates a trial to receive evidence on the contract’s execution, context, and compliance with statutory requirements. The Supreme Court emphasized that where the answer raises issues as to the validity of the written instrument upon which the claim is based, a judgment on the pleadings is improper. The case was remanded to the trial court for a full reception of evidence and a trial on the merits.