G.R. No. L-8042 November 29, 1955
THE WORLD WIDE INSURANCE & SURETY CO., INC., plaintiff-appellant, vs. GONZALO L. MANUEL, doing business under the name and style of GLM PRODUCTIONS and GONZALO L. MANUEL PRODUCTIONS, defendants-appellees.

FACTS

In Civil Case No. 16335, the Visayan Surety Insurance Corporation obtained a writ of attachment against the defendants. To lift the attachment, Gonzalo L. Manuel (defendant in the present case), purportedly representing the defendants, and the World Wide Insurance and Surety Company (plaintiff in the present case) filed a bond. For the plaintiff’s protection, Gonzalo L. Manuel supposedly executed an “Agreement of Counter-guaranty with mortgage and/or pledge.” The plaintiff sued on that agreement. The defendant moved to dismiss, arguing the complaint stated no cause of action because the attached agreement showed Gonzalo L. Manuel signed as President of GLM Productions and Gonzalo L. Manuel Productions, not individually. The trial court initially dismissed the complaint unless amended. Upon reconsideration, the court allowed an amendment. The plaintiff filed an amended complaint, making Gonzalo L. Manuel a party defendant in his individual capacity, alleging that GLM Productions and Gonzalo L. Manuel Productions were not registered with the Securities and Exchange Commission and thus had no juridical personality, making him personally responsible. The defendant again moved to dismiss. The trial judge, after investigating court records, found that GLM Productions, also known as Gonzalo L. Manuel Productions, was a juridical entity, and its lack of SEC registration did not affect its legal existence. Based on this finding, the trial court dismissed the amended complaint. The plaintiff appealed.

ISSUE

Whether the trial court erred in dismissing the amended complaint for failure to state a cause of action by going beyond its allegations and considering facts outside the complaint.

RULING

Yes. The order of dismissal is reversed, and the case is remanded for further proceedings. In determining whether a complaint states a cause of action, only the facts alleged in the complaint must be accepted as true. The court cannot go beyond and outside the complaint for data or facts, especially those contrary to the complaint’s allegations. While there may be an apparent conflict between the complaint’s allegations and a document attached to it, this does not justify dismissal. Instead, the defendant should answer, allowing the plaintiff to reconcile any conflict and the defendant to refute the allegations. The recital in the attached agreement that Gonzalo L. Manuel signed as President is not an allegation of the complaint but a statement in the instrument. The complaint’s basic allegation of his individual liability, based on the entity’s alleged lack of juridical personality, stands. Whether the entity had legal existence and whether Gonzalo L. Manuel was authorized to represent it are matters of defense to be alleged in the answer and proven at the hearing.