G.R. No. 191838 and G.R. No. 191863, October 20, 2014.
YKR CORPORATION, MA. TERESA J. YULO-GOMEZ, JOSE ENRIQUE J. YULO, MA. ANTONIA J. YULO-LOYZAGA, JOSE MANUEL J. YULO, MA. CARMEN J. YULO and JOSE MARIA J. YULO, Petitioners, vs. PHILIPPINE AGRI-BUSINESS CENTER CORPORATION, Respondent. / REPUBLIC OF THE PHILIPPINES, Petitioner, vs. PHILIPPINE AGRI-BUSINESS CENTER CORPORATION, Respondent.

FACTS

These consolidated petitions assail the Sandiganbayan Resolutions granting summary judgment in favor of respondent Philippine Agri-Business Center Corporation (PABC). The case originated from Civil Case No. 0024, an action for reversion, reconveyance, restitution, accounting and damages filed by the Republic, through the PCGG. PABC intervened, seeking to recover possession of two parcels of land in Busuanga, Palawan (the Busuanga Properties), covered by TCT Nos. 6110 and 6111 registered in its name, which formed part of the Yulo King Ranch. PABC alleged that in 1975, without its knowledge or consent, defendant YKR Corporation entered and occupied the properties. On April 2, 1986, the PCGG sequestered the Yulo King Ranch, including PABC’s properties, and turned over possession to the government. PABC filed a Complaint-in-intervention praying to be adjudged the true owner and for the Republic to return possession.
PABC served a Request for Admissions on all defendants-in-intervention. The Republic, in its Reply, admitted that: prior to sequestration, the properties were possessed by YKR; YKR entered and occupied the properties in 1975 and used them for cattle operations; YKR possessed the properties during Martial Law; the PCGG sequestered YKR’s assets; and the properties are not assets of YKR. However, the Republic denied PABC’s ownership, citing Presidential Proclamation No. 1387 (establishing a pasture reserve) and Presidential Decree No. 1297. YKR Corporation and seven Yulo heirs responded that they could not truthfully admit or deny the requests because all YKR records had been taken by the PCGG. Defendant Peter Sabido did not answer the request.
Based on these responses and non-responses, PABC moved for summary judgment, arguing there was no genuine issue as to Sabido’s lack of interest (deemed admitted due to his failure to answer) and as to PABC’s ownership and YKR’s unauthorized occupation (deemed admitted by YKR and the Yulo heirs due to their equivocal responses, and admitted by the Republic). The Sandiganbayan granted the motion, ruling that the admissions and deemed admissions established PABC’s ownership and YKR’s unauthorized possession, leaving no genuine issue for trial. It ordered the Republic to return possession of the Busuanga Properties to PABC.

ISSUE

Whether the Sandiganbayan erred in granting PABC’s motion for summary judgment.

RULING

Yes, the Supreme Court reversed the Sandiganbayan’s Resolutions and remanded the case for further proceedings. Summary judgment is only proper when, based on the pleadings, affidavits, and admissions, there is no genuine issue as to any material fact. The Court found that genuine issues of material fact existed, precluding summary judgment.
First, the Republic’s Answer to the Complaint-in-intervention specifically denied PABC’s ownership and raised the affirmative defense that the properties were part of a public pasture reserve established by Presidential Proclamation No. 1387, implying the titles might be void. This defense directly contested PABC’s claim of ownership and raised a factual and legal issue requiring a trial.
Second, the Sandiganbayan incorrectly treated the Republic’s admissions in its Reply to the Request for Admissions as conclusive against its co-defendants, YKR and the Yulo heirs. Admissions under a request for admissions are binding only on the party who made them, not on co-parties. The Republic’s admissions could not be used to establish facts against YKR and the Yulo heirs.
Third, the Sandiganbayan erroneously deemed the matters in the Request for Admissions as admitted by YKR and the Yulo heirs. Their response that they “cannot truthfully admit or deny” due to lack of records (seized by the PCGG) was a valid reason under the Rules of Court (Rule 26, Section 4) for not making an admission or denial. It was not an evasion but a statement of their inability based on lack of knowledge or information. Therefore, no deemed admissions arose from their response.
Fourth, the issue of whether PABC’s titles were valid or were nullified by the presidential proclamation creating a pasture reserve is a substantial factual issue that must be resolved in a full-blown trial. The existence of such a proclamation, which the Republic invoked, challenges the very basis of PABC’s claim.
Consequently, with these genuine issues of material fact present, the grant of summary judgment was improper. The case was remanded to the Sandiganbayan for trial on the merits.