Villuga vs. Kelly Hardware and Construction Supply Inc.

Summary judgment is proper when the pleadings, affidavits, and admissions on file demonstrate that no genuine issue exists as to any material fact, and the moving party is entitled to judgment as a matter of law; a defendant's mere assertion of lack of knowledge regarding the application of partial payments, where such application is plainly within the defendant's knowledge, does not constitute a genuine issue of fact sufficient to preclude summary judgment.

Kelly Hardware and Construction Supply Inc. filed a complaint for collection of sum of money against Spouses Ramon and Mercdita Villuga for unpaid construction materials purchased between November 1992 and January 1993, totaling P259,809.50. The spouses admitted making purchases but claimed they had made partial payments totaling P130,301.80, leaving a balance that required verification. The respondent subsequently filed an Amended Complaint and then a Second Amended Complaint to reflect adjustments in the claimed period and to account for the partial payments.

• Respondent Kelly Hardware and Construction Supply Inc. filed a complaint alleging that petitioners purchased construction materials from November 19, 1992 to January 5, 1993 totaling P259,809.50, which remained unpaid despite demands.
• In their Answer, petitioners admitted making purchases but claimed they could not remember the exact amount as no documents were attached; they alleged making partial payments of P110,301.80 on March 4, 1994 and P20,000.00 on August 9, 1994, and expressed willingness to pay the balance after verification.
• In a Manifestation dated July 18, 1995, petitioners offered to pay the principal sum of P259,809.50 without interest or costs, on an installment basis, to buy peace.
• Respondent signified in a Counter Manifestation that it was amenable to receiving the principal amount but insisted on payment of interests, litigation expenses, attorney's fees, and incidental expenses.
• Respondent filed a Motion for Partial Judgment on the Pleadings contending that petitioners admitted owing P259,809.50 when they claimed partial payments of P130,301.80, leaving a balance of P129,507.70.
• The RTC issued an Order on September 11, 1995 deferring resolution of the Motion for Partial Judgment because there was no clear and specific admission by petitioners as to the actual amount owed.
• Respondent filed an Amended Complaint on January 30, 1996, alleging that between October 1992 and January 5, 1993, petitioners purchased materials aggregating P279,809.50, of which only P20,000.00 had been paid, leaving a balance of P259,809.50.
• On March 8, 1996, respondent filed a Request for Admission asking petitioners to admit the genuineness of statements of accounts, delivery receipts, invoices, and demand letters, as well as the truth of allegations that the principal obligation was P279,809.50 and only P20,000.00 was paid.
• On June 3, 1996, respondent filed a Manifestation and Motion praying that petitioners be deemed to have admitted the genuineness of the documents and the truth of the matters of fact set forth in the Request for Admission for failure to timely file a comment.
• Petitioners filed Comments on the Request for Admission on June 6, 1996, stating objections to the admission of the documents; the Comments were signed by counsel and not by the petitioners themselves.
• On January 24, 1997, respondent filed a Second Amended Complaint modifying the period covered to July 29, 1992 until August 10, 1994, confirming the partial payment of P110,301.80 but alleging that this was applied to other obligations separate from the P259,809.50 being sought, leaving the principal obligation at P259,809.50.
• In their Answer to the Second Amended Complaint, petitioners denied the allegations and insisted on their defense of partial payment, specifically claiming lack of knowledge or information sufficient to form a belief as to the truth of the allegation that they still owed P259,809.50 despite their payments of P110,301.80 and P20,000.00.
• On September 4, 1997, respondent filed a Motion to Expunge with Motion for Summary Judgment, claiming that the Comments on the Request for Admission were a mere scrap of paper for being signed by counsel rather than petitioners and filed beyond the period allowed, resulting in implied admission of the matters requested.
• The RTC granted the Motion to Expunge and Motion for Summary Judgment on September 28, 1998, ordering petitioners to pay P259,809.50 with legal interest, and denied the Motion for Reconsideration on May 6, 1999.

• The Request for Admission was waived or abandoned when respondent filed the Second Amended Complaint, as all motions or requests based on the abandoned Amended Complaint should no longer be considered.
• The Request for Admission was fatally defective because it failed to specify a period within which to reply as required by Section 1, Rule 26 of the Rules of Court.
• Verification by petitioners' counsel was sufficient compliance with the Rules of Court regarding the Comments on the Request for Admission.
• The Request for Admission should be deemed dispensed with and no longer taken into account because it only related to the Amended Complaint, which was abandoned when the Second Amended Complaint was filed.
• Summary judgment is improper and without legal basis because genuine issues exist brought about by petitioners' specific denials and affirmative defenses, particularly the defense of partial payment.

• The Second Amended Complaint supersedes only the Amended Complaint and nothing more, pursuant to Section 8, Rule 10 of the Rules of Court; it does not affect the pending Request for Admission.
• Petitioners' Comments on the Request for Admission were filed out of time and were signed by counsel instead of the petitioners themselves, rendering them a mere scrap of paper and warranting expunction.
• Petitioners are deemed to have impliedly admitted the matters subject of the Request for Admission due to their failure to timely file the required response.
• Summary judgment is proper because petitioners failed to tender a genuine issue as to any material fact and did not raise any special defenses which could possibly relate to any factual issue, as their partial payment defense was adequately accounted for in the Second Amended Complaint.

• Procedural Issues:
  • Whether the filing of the Second Amended Complaint superseded and rendered abandoned the prior Request for Admission.
  • Whether the petitioners' Comments on the Request for Admission were properly expunged for being filed out of time and for being signed by counsel rather than the petitioners themselves.
  • Whether the failure to timely file comments on the Request for Admission resulted in implied admission of the matters requested.
• Substantive Issues:
  • Whether the Regional Trial Court properly granted summary judgment in favor of the respondent.

• Procedural:
  • The Court held that under Section 8, Rule 10 of the Rules of Court, an amended pleading supersedes only the pleading that it amends; therefore, the Second Amended Complaint superseded only the Amended Complaint and did not affect the Request for Admission, which remained viable.
  • The Court agreed with the Court of Appeals that the Comments on the Request for Admission were filed out of time; while the Request failed to designate a specific period for response, the objective of Rule 26 to expedite trial requires compliance within a reasonable time not left to the whims of the party.
  • However, the Court held that the belated filing did not result in implied admission of the indebtedness because the Request for Admission merely reiterated factual allegations already specifically denied in prior pleadings; Rule 26 contemplates interrogatories that clarify and shed light on the truth or falsity of allegations, not mere reiteration of what has already been alleged and denied, and a party cannot be compelled to deny anew matters already specifically denied.
• Substantive:
  • The Court affirmed the grant of summary judgment under Sections 1 and 3, Rule 35 of the Rules of Court, which is proper when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.
  • While petitioners initially raised genuine issues by pleading partial payment in their earlier answers, the situation changed with the Second Amended Complaint where respondent admitted the partial payments but alleged they were applied to other obligations distinct from the sum sought.
  • Petitioners' Answer to the Second Amended Complaint merely claimed lack of knowledge or information sufficient to form a belief as to the truth of the allegation that they still owed P259,809.50 despite their payments; this was improper because the application of payments is so plainly and necessarily within the defendants' knowledge that the averment of ignorance must be palpably untrue.
  • By failing to assert that the payments should be deducted from the sum sought or to deny that they were applied to other debts, petitioners failed to tender genuine issues of fact requiring presentation of evidence at trial, rendering summary judgment proper.

• Effect of Amended Pleading — Under Section 8, Rule 10 of the Rules of Court, an amended pleading supersedes only the pleading that it amends; admissions in superseded pleadings may be received in evidence against the pleader, and claims or defenses alleged therein not incorporated in the amended pleading shall be deemed waived, but the amendment does not automatically withdraw or abandon pending discovery procedures such as requests for admission.
• Purpose of Request for Admission — Rule 26 is a mode of discovery intended to expedite trial by clarifying and shedding light on the truth or falsity of allegations in pleadings; it does not contemplate mere reiteration of allegations already specifically denied, and a party cannot be compelled to deny anew matters already specifically denied in prior pleadings.
• Summary Judgment — Under Rule 35, summary judgment is proper only when the pleadings, supporting affidavits, depositions, and admissions on file show that, except as to the amount of damages, there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law; it is a procedural device to avoid long-drawn litigation and useless delays where facts are not in dispute.
• Improper "Lack of Knowledge" Answer — The rule authorizing an answer to the effect that the defendant has no knowledge or information sufficient to form a belief as to the truth of an averment, giving such answer the effect of a denial, does not apply where the fact as to which want of knowledge is asserted is so plainly and necessarily within the defendant's knowledge that his averment of ignorance must be palpably untrue.

• "A request for admission that merely reiterates the allegations in an earlier pleading is inappropriate under Rule 26 of the Rules of Court, which as a mode of discovery, contemplates of interrogatories that would clarify and tend to shed light on the truth or falsity of the allegations in the pleading."
• "Rule 26 does not refer to a mere reiteration of what has already been alleged in the pleadings."
• "Summary judgment is a procedural device resorted to in order to avoid long drawn out litigations and useless delays."
• "It is settled that the rule authorizing an answer to the effect that the defendant has no knowledge or information sufficient to form a belief as to the truth of an averment and giving such answer the effect of a denial, does not apply where the fact as to which want of knowledge is asserted, is so plainly and necessarily within the defendant's knowledge that his averment of ignorance must be palpably untrue."

• Duque v. Court of Appeals — Cited for the principle that one of the main objectives of Rule 26 is to expedite the trial of the case.
• Limos v. Odones — Cited for the rule that if factual allegations in the complaint are the very same allegations set forth in the request for admission and have already been specifically denied, the required party cannot be compelled to deny them anew.
• Development Bank of the Philippines v. Court of Appeals — Cited for the principle that Rule 26 does not refer to a mere reiteration of what has already been alleged in the pleadings.
• Nocom v. Camerino — Cited extensively for the requisites of summary judgment under Rule 35, the definition of "genuine issue" as distinguished from sham or contrived claims, and the principle that summary judgment is permitted only if there is no genuine issue as to any material fact.
• Maritime Industry Authority (MARINA) v. Marc Properties Corporation — Cited for the principle that summary judgment is a procedural device to avoid long drawn out litigations.
• Gubat v. National Power Corporation — Cited for the basis of summary judgment on facts proven summarily by affidavits, depositions, pleadings, or admissions of the parties.
• Philippine Bank of Communications v. Go — Cited for the rule regarding improper "lack of knowledge" answers where facts are plainly and necessarily within the defendant's knowledge.

• Section 8, Rule 10 of the Rules of Court — Governs the effect of amended pleadings, providing that an amended pleading supersedes the pleading that it amends.
• Section 1 and Section 2, Rule 26 of the Rules of Court — Govern the form and effect of requests for admission, including the requirement that the party to whom the request is directed must respond within a period designated in the request or fixed by the court.
• Sections 1 and 3, Rule 35 of the Rules of Court — Govern summary judgment for claimants and the proceedings thereon, providing the requisites that there must be no genuine issue as to any material fact and that the moving party must be entitled to judgment as a matter of law.

• N/A (Associate Justices Velasco, Jr., Abad, Mendoza, and Perlas-Bernabe concurred with the decision written by Justice Peralta without filing separate opinions)