G.R. No. 89090 ; June 19, 1991
Sps. Ignacio and Amparo Sugay, petitioners, vs. Court of Appeals and Altrima Development Corporation, respondents.

FACTS

The case originated from a contract where petitioners Spouses Sugay purchased a lot from private respondent Altrima Development Corporation, which also agreed to construct a house thereon. Altrima filed a complaint to recover P36,946.47 based on a promissory note executed by the spouses, alleging non-payment. In their answer, the spouses admitted signing the note but contended it did not reflect the true transaction. They asserted the total contract price was P178,400.53, not P200,000, due to a reduced loan from the Development Bank of the Philippines. They claimed having paid P172,033.53, leaving a balance of only P6,366.47, and filed a counterclaim for damages due to alleged construction defects.
Altrima moved for summary judgment, attaching supporting documents including the promissory note, a reservation agreement stating the P200,000 price, and letters from Ignacio Sugay pleading for time to pay and acknowledging a “shortfall.” The spouses opposed, submitting an affidavit and payment receipts. The Regional Trial Court granted the motion, ordering the spouses to pay P31,946.47 with interest and attorney’s fees. The Court of Appeals affirmed the summary judgment.

ISSUE

Whether the trial court correctly rendered a summary judgment despite the petitioners’ assertion of genuine issues regarding the exact contract price and their counterclaim for construction defects.

RULING

The Supreme Court upheld the propriety of the summary judgment. The test is whether the pleadings and exhibits show no genuine issue as to any material fact, justifying judgment as a matter of law. The Court found no genuine issue existed. First, the petitioners failed to substantiate their claim of a price reduction. Their self-serving allegations were contradicted by the reservation agreement they signed, which prima facie evidenced the P200,000 price, and by the promissory note executed after the DBP loan reduction, which still reflected a balance consistent with that price. Ignacio Sugay’s own letters pleaded for time to pay and recognized an obligation to pay the “shortfall.”
Second, the counterclaim for construction defects did not preclude summary judgment. The rule that a larger counterclaim bars summary judgment applies only to valid claims. The alleged defects were not protested earlier, even in the certificate of house acceptance, and were only “discovered” by a hired professional after the complaint was filed, making the counterclaim an apparent afterthought. No full trial was necessary as the documents conclusively showed no bona fide defense. The summary judgment properly facilitated the speedy administration of justice.