Today is Sunday, November 18, 2018

SECOND DIVISION

DECISION

une 17, 2015 Resolution 2 of the Court of Appeals (CA) in CA-G.R. CV No. 01475, which overturned the February 17, 2005 Amended

orporation/Aguila Glass (Comglasco), as lessee, entered into a lease contract over a portion of a warehouse building, with an estima
t 15, 2003.4

date. Iloilo Jar, however, rejected the request on the ground that the pre-termination of the lease contract was not stipulated therein. D
uipment, and notwithstanding several demand letters, Comglasco no longer paid all rentals accruing from the said date. 5

nsequently, Iloilo Jar filed a civil action for breach of contract and damages before the RTC on October 10, 2003. 6

of Article 1267 of the Civil Code (Article 1267),8 it was released from its obligation from the lease contract. It explained that the consid
ot refuse to pay the rentals because the lease contract was already deemed terminated. Further, it averred that though it received the

ted all the material allegations in the complaint. It insisted that Comglasco's answer failed to tender an issue because its affirmative d
Comglasco's answer admitted the material allegations of the complaint and that its affirmative defense was unavailing because Articl
the RTC issued the assailed February 17, 2005 Amended Order wherein the total amount of unpaid rentals to be paid was modified
amages from P400,000.00 to P200,000.00.

as of the view that judgment on the pleadings was improper as Comglasco' s answer tendered an issue considering that lloilo Jar's ma

4; the Order dated January 24, 2005; and the Order dated February 17, 2005 of the Regional Trial Court, Branch 37, Iloilo City, in Civ

solution.

ISSUES

SE AT BAR CAN BE CONSIDERED AS APPROPRIATELY TENDERING AN ISSUE THAT NEED TO BE TRIED BY THE TRIAL CO

II

DEFENSE INTERPOSED BY THE DEFENDANT IN THE ANSWER IS NOT APPLICABLE AS A DEFENSE TO THE CAUSE OF AC

articularly, that the latter had removed its merchandise from the lease premises and failed to pay subsequent rentals, after it had rece
difficulties it was experiencing in light of the economic crisis. Iloilo Jar insisted that Comglasco cannot rely on Article 1267 because it

es which rendered judgment on the pleadings improper. It asserted that judgment on the pleadings may be had only when the answe
fenses it raised may give rise to factual controversies or issues which should be subject to a trial.

ted because Comglasco's answer failed to specifically deny the allegation in the complaint, and that the affirmative defense alleged t

The Court's Ruling

rty appealing is, thus, expected to comply with the requirements of relevant rules otherwise he would lose the statutory right to appea

ion on July 9, 2015. Pursuant to Section 2 Rule 45 of the Rules of Court, 17 it had fifteen (15) days from receipt of the resolution or un

2, 2015 Resolution, 18 the Court granted that same and extended for thirty (30) days reckoned from the expiration of the reglementary

0) days. In its November 25, 2015 Resolution,20 the Court again granted the same and gave another 30-day extension reckoned from

extended filing period. Again, procedural rules are not lightly brushed aside as its strict compliance is necessary for the orderly admin

e disregarded by the Court to serve the ends of substantial justice. When a petition for review is filed a few days late, application of p
v. Bhagis International Trading Corporation,23 the Court did not strictly apply procedural rules as it would serve the interest of justice, e

and due regard, since they are designed to facilitate the adjudication of cases to remedy the worsening problem of delay in the resolu
edience to the Rules would def eat rather than serve the ends of justice.

plication of the rules of procedure may be relaxed, in the exercise of its equity jurisdiction. Thus, a rigid application of the rule

ttain justice swiftly. A denial of its petition will cause the remand of the case, which based on the circumstances, will unnecessarily de

s:

e admits the material allegations of the adverse party's pleading, the court may, on motion of that party, direct judgment on

e are no genuine issues raised.

at the former is appropriate if the answer failed to tender an issue and the latter may be resorted to if there are no genuine issues rais

presence of issues in the Answer to the Complaint. When the Answer fails to tender any issue, that is, if it does not deny the mate
appropriate. On the other hand, when the Answer specifically denies the material averments of the complaint or asserts affirmative de
distinguished from an issue which is fictitious or contrived or which does not constitute a genuine issue for trial."
 material allegations therein, it nevertheless asserts the affirmative defenses that the action for revival of judgment is not the proper a

had removed its stocks from the leased premises and had received the demand letter for rental payments, it argued that the lease co
Comglasco's Answer raised an affirmative defense.

nd the case to the RTC for further proceedings. In Wood Technology Corporation v. Equitable Banking Corporation (Wood Technolog

he litigation. The proper inquiry in this regard would be whether the affirmative defenses offered by petitioners constitute genuine issu
sue of fact which calls for the presentation of evidence, as distinguished from an issue which is fictitious or contrived, an is

as corrected by the Court to be a summary judgment because of the issue presented by the affirmative defense raised therein. In the

not a judgment on the pleadings, because Comglasco' s answer raised an affirmative defense. Nevertheless, no genuine issue was r

s undisputed that Comglasco removed its merchandise from the leased premises and stopped paying rentals thereafter. Thus, there
n prevalent.

se contract. It cited the existing global and regional economic crisis for its inability to comply with its obligation.

bligations to give. Thus, in Philippine National Construction Corporation v. Court of Appeals, 29 the Court expounded:

to obligations "to do," and not to obligations "to give." An obligation "to do" includes all kinds of work or service; while an obliga
owner.

xxx

stipulate in the light of certain prevailing conditions, and once these conditions cease to exist, the contract also ceases to exist. xxx

of the principle of rebus sic stantibus, which would endanger the security of contractual relations. The parties to the contract must be
es and Underscoring supplied]

voke Article 1267 of the Civil Code. Even so, its position is still without merit as financial struggles due to an economic crisis is not en

at the economic crisis which may have caused therein petitioner's financial problems is not an absolute exceptional change of circum
tract.

nse raised by it was insufficient to free it from its obligations under the lease contract. In addition, Iloilo Jar is entitled to attorney's fee

udulent, reckless, oppressive or malevolent manner. 32 As discussed, Comglasco defaulted in its obligation to pay the rentals by reaso
alevolent manner.33 On the other hand, attorney's fees may be recovered in case the plaintiff was compelled to incur expenses to pro

hall be subject to 12% interest per annum until June 30, 2013 and 6% per annum from July 1, 2013 until fully satisfied.
s such, he must ensure that he faithfully complies with rules of procedure especially since they are in place to aid in the administratio

court processes. First, he belatedly filed the petition for review. Second, Iloilo Jar's counsel failed to file its Reply within the time origin
cularly in timely filing the pleadings required by the Court.

e REVERSED and SET ASIDE. The February 17, 2005 Amended Order of the Regional Trial Court, Branch 3 7, Iloilo City, is AFFIRM
um from July 1, 2013 until fully satisfied.

ure, with a WARNING that repetition to strictly comply with procedural rules shall be dealt with more severely.

ANTONIO T. CARPIO
Associate Justice
Chairperson

DIOSDADO M. PERALTA MARVIC M.V.F. LEONEN

Associate Justice Associate Justice

FRANCIS H. JARDELEZA*
Associate Justice

ATTESTATION

assigned to the writer of the opinion of the Court’s Division.

CERTIFICATION

rtify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the op
 T. Ingles and Associate Justice Renato C. Francisco, concurring: rollo, pp.47-57.

ontemplation of the parties, the obligor may also be released therefrom, in whole or in part.

der or resolution appealed from, or of the denial of the petitioner's motion for new trial or reconsideration filed in due time after notice o
Court may for justifiable reasons grant an extension of thirty (30) days only within which to file the petition.
y Frames, 716 Phil. 267 (2013).

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