G.R. No. L-26398 October 25, 1968
ELPIDIO TALASTAS, plaintiff-appellee, vs. CLEMENCO ABELLA, defendant-appellant.

FACTS

Plaintiff Elpidio Talastas filed a complaint alleging that he and defendant Clemenco Abella entered into an oral partnership in September 1955 to operate the Sambat Recreation Center in Samal, Bataan. Plaintiff contributed one-third (P1,546.54) and defendant two-thirds (P3,093.08) of the capital, with profits to be shared proportionately. Defendant, as managing partner, was to render monthly accounts and deliver plaintiff’s share of profits. After accounting for four months (from September 1955), defendant failed to account or deliver profits starting February 1956. The partnership also lent P327.00 to taxi-dancers, which was repaid to defendant, and leased a corner space for a refreshment concession at P6.00 per night. Defendant later ejected the concessionaire and operated his own refreshment business there from January 1956 without accounting for the rental income or plaintiff’s share. Plaintiff further alleged that in 1958, defendant sold plaintiff’s partnership interest to Juan Castillo for P1,600.00 without delivering the proceeds to plaintiff. Plaintiff sought dissolution, liquidation, accounting, delivery of his shares, and damages.
Defendant filed an answer denying the allegations and specifically alleging that no oral partnership contract existed, with a counterclaim for attorney’s fees and moral damages.
Plaintiff moved for summary judgment, arguing defendant’s answer was a general denial and thus admitted the material averments, and supported his motion with affidavits from himself, Angel Bugay, Luningning Bugay, Marciano Medina, Vicente Tinao, and Juan Castillo, which detailed the partnership agreement, plaintiff’s construction contribution as capital, joint ownership indications on tickets, defendant’s admission of the partnership to third parties, and the sale of plaintiff’s interest.
The Court of First Instance of Manila granted the motion for summary judgment, ordering defendant to pay plaintiff P1,600.00 (for the sold interest), P240.00 (estimated share of refreshment space rentals), P109.00 (share of repaid taxi-dancer loans), to render accountings of business proceeds and refreshment space rentals from February 1956, and to pay P300.00 attorney’s fees plus costs. Defendant appealed.

ISSUE

1. Whether the defendant’s answer constituted a general denial, thereby admitting the material allegations of the complaint.
2. Whether the trial court erred in finding the existence of a partnership based on the affidavits submitted.
3. Whether the trial court erred in awarding money judgments before the ordered accounting was rendered.

RULING

1. Yes, the defendant’s answer was a general denial. Under the Rules of Court, material averments in a complaint are deemed admitted if not specifically denied. A specific denial must not only specify each material allegation but also, whenever practicable, set forth the substance of matters relied upon for the denial. Defendant’s answer merely denied the allegations and stated no partnership existed without setting forth any substantive facts to support this denial. Therefore, the material allegations in the complaint were deemed admitted.
2. No, the trial court did not err in finding a partnership based on the affidavits. Summary judgment is proper when there is no genuine issue as to any material fact. The defendant’s answer, being a general denial, failed to raise any triable issue of fact. The affidavits submitted by plaintiff, which were uncontroverted by any counter-affidavit or evidence from defendant, sufficiently established the existence of the oral partnership, its terms, plaintiff’s contribution, defendant’s management and failure to account, and the sale of plaintiff’s interest. Defendant’s bare denial, without more, could not defeat the motion for summary judgment.
3. The Supreme Court modified the judgment regarding the monetary awards. The award of P1,600.00 for the sold partnership interest was affirmed. However, the awards of P240.00 (for refreshment rentals) and P109.00 (for taxi-dancer loans) were to be credited to plaintiff in the accountings yet to be rendered, as these sums represented estimated shares of partnership assets or income subject to the final accounting. The award of P300.00 for attorney’s fees was set aside to be determined after the accounting was completed. The orders for defendant to render accountings of business proceeds from February 1956 and of refreshment space rentals were affirmed.
The decision of the lower court was affirmed with the modifications stated. Costs were awarded against defendant.