GR 86568; (March, 1990) (Digest)
G.R. No. 86568 March 22, 1990
IMPERIAL TEXTILE MILLS, INC., petitioner, vs. COURT OF APPEALS and THE INTERNATIONAL CORPORATE BANK, INC., respondents.
FACTS
Private respondent International Corporate Bank, Inc. filed a collection suit against petitioner Imperial Textile Mills, Inc. before the Regional Trial Court of Makati. The complaint was based on a Promissory Note allegedly executed by the petitioner on August 18, 1980, whereby it obligated itself to pay the bank the sum of Twelve Million Pesos (P12,000,000.00). The complaint specifically alleged the substance of the promissory note and attached a copy thereof as an annex, in compliance with procedural rules.
In its Answer, the petitioner denied liability, claiming that its representative, Julio Tan, had no authority to negotiate the loan or sign the promissory note on its behalf. However, while the petitioner specifically denied the allegations concerning the promissory note, its Answer was not verified. The trial court rendered a decision in favor of the bank. The Court of Appeals affirmed this decision, prompting the petitioner to elevate the case to the Supreme Court.
ISSUE
Whether the petitioner’s failure to specifically deny under oath the genuineness and due execution of the promissory note attached to the complaint constitutes an admission of the document’s authenticity, thereby precluding it from raising the defense of its agent’s lack of authority.
RULING
Yes. The Supreme Court dismissed the petition, affirming the decisions of the lower courts. The ruling is anchored on the mandatory application of Sections 7 and 8, Rule 8 of the Rules of Court. Section 7 provides the manner of pleading an actionable document: by setting forth its substance in the pleading and attaching a copy, or by copying the instrument into the pleading itself. The respondent bank’s complaint complied with the first method.
Crucially, Section 8 states that when an action is founded upon a written instrument attached to the pleading, the genuineness and due execution of that instrument shall be deemed admitted unless the adverse party specifically denies them under oath. Here, the petitioner’s Answer, while containing a denial, was unverified. This procedural lapse resulted in a judicial admission of the promissory note’s genuineness and due execution. Such an admission is conclusive and encompasses the authority of the signatory, Julio Tan, to act on behalf of the petitioner corporation. Consequently, defenses inconsistent with the document’s authenticity, including the alleged lack of authority of the agent who signed it, are deemed waived and cannot be raised. The Court emphasized that the rule is settled and designed to prevent dilatory tactics, and it found the judgment supported by the evidence.