G.R. No. 181676 June 11, 2014
ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION, Petitioner, vs. SANNAEDLE CO., LTD., Respondent.

FACTS

Respondent Sannaedle Co., Ltd. filed a Complaint for Sum of Money against petitioner Asian Construction and Development Corporation. The complaint alleged that the parties executed a Memorandum of Agreement wherein respondent was engaged to supply and erect insulated panel systems for the Philippine Centennial Exposition Theme Park, Phase I Project, for US$3,745,287.94. Petitioner made payments totaling US$3,129,667.32, leaving a balance of US$615,620.33. Respondent made several written demands for payment, which petitioner refused. Petitioner filed an Answer with Counterclaim. Respondent moved for judgment on the pleadings, arguing that the Answer admitted all material allegations of the Complaint and thus failed to tender an issue. The Regional Trial Court (RTC) of Makati City granted the motion and rendered judgment in favor of respondent, ordering petitioner to pay the balance with 12% interest per annum from February 2, 2000. The Court of Appeals affirmed the RTC decision. Petitioner appealed to the Supreme Court.

ISSUE

Whether or not judgment on the pleadings is proper.

RULING

Yes, judgment on the pleadings is proper. Judgment on the pleadings is governed by Section 1, Rule 34 of the 1997 Rules of Civil Procedure, which applies where an answer fails to tender an issue or otherwise admits the material allegations of the adverse party’s pleading. An answer fails to tender an issue if it does not comply with the requirements of a specific denial under Sections 8 and 10, Rule 8. In this case, petitioner’s Answer admitted the material allegations of the complaint. It admitted the execution of the Memorandum of Agreement and the existence of the unpaid balance of US$615,620.33. While petitioner raised affirmative defenses such as a defect in the certification of non-forum shopping, respondent’s lack of legal capacity to sue, and fortuitous event (the failure of a third party, First Centennial Clark Corporation, to comply with its obligations), these defenses did not negate the admission of the material allegations regarding the perfected agreement and the outstanding debt. The Answer did not specifically deny the genuineness and due execution of the Memorandum of Agreement. Therefore, the answer failed to tender a genuine issue, making judgment on the pleadings proper. The Supreme Court denied the petition and affirmed the Court of Appeals Decision and Resolution.