G.R. No. 2028 September 16, 1905
C. HEINSZEN & CO., plaintiffs-appellees, vs. HENRY M. JONES, defendant-appellant.

FACTS: The plaintiffs-appellees, C. Heinszen & Co., filed a complaint to collect on a promissory note allegedly executed by the defendant-appellant, Henry M. Jones. In his answer, Jones (1) generally denied all allegations of the complaint, and (2) specially alleged that he could not recall the matter, did not believe he executed the note, and specifically denied under oath having executed it himself or through an authorized agent. He further alleged that if he had executed it and forgotten, it was already paid, or if unpaid, it was executed for accommodation without receiving any value, and the plaintiffs acquired it without disbursing value. The lower court, upon motion of the plaintiffs, struck out the entire answer as a sham under the Code of Civil Procedure and rendered judgment for the plaintiffs.

ISSUE
Whether the lower court erred in striking out the defendant’s answer in its entirety as a sham pleading.

RULING
Yes, the Supreme Court reversed the lower court’s order and judgment. The Court held it was error to strike out the entire answer. The material allegations of the complaint were: (1) due execution of the note, (2) endorsement to the plaintiffs, and (3) nonpayment. The defendant’s general denial put in issue the allegation regarding the endorsement. Since the plaintiffs presented no evidence on this point at the hearing of the motion, the answer could not be stricken as a whole. The Court further clarified that Section 103 of the Code of Civil Procedure, requiring a verified denial of a written instrument’s execution, applies to the promissory note itself, not to its endorsement. The defendant is presumed to know if he signed the note, but not necessarily if the payee endorsed it to another. However, the Court noted for purposes of remand that the defendant’s special answer did not constitute a proper verified denial of the note’s execution under Section 103. The case was remanded for further proceedings.