G.R. No. 145469




SECOND DIVISION G.R. No. 145469 May 28, 2004 COTABATO TIMBERLAND CO., INC., petitioner, vs. C. ALCANTARA AND SONS, INC. and SEVEN BROTHERS SHIPPING CORPORATION, respondents. D E C I S I O N QUISUMBING, J.: In this petition for review, petitioner Cotabato Timberland Co., Inc. assails the decision¹ dated August 3, 2000 in CA-G.R. SP No. 57208 of the Court of Appeals, affirming the order² dated October 29, 1999 of the Regional Trial Court of Makati City, Branch 146, in Civil Case No. 97-2908 which denied petitioner’s motion for summary judgment. On June 15, 1994, petitioner Cotabato Timberland Co., Inc., and respondent C. Alcantara and Sons, Inc. (CASI) entered into a contract of sale for the delivery of 5,500 metric tons of Lauan round logs. Of the said amount, CASI has paid twenty-one million pesos (₱21,000,000) with the balance payable upon completion of loading.³ Petitioner made log shipments to CASI in two lots. The first was on October 12, 1994. The second shipment was on December 11, 1994, consisting of 643 pieces of logs covering 2,717.79 cubic meters loaded on M/V Seven Logmaster that was owned and operated by respondent Seven Brothers Shipping, Corp. (SBSC). ⁴ In the second shipment, 273 pieces of logs were loaded at Polloc, Maguindanao and the other 370 logs were loaded at Sta. Maria, Zamboanga del Norte. The 273 logs shipped at Polloc, Maguindanao were covered by a Log Sale/Purchase Agreement between petitioner and CASI dated December 9, 1994, while shipment of 370 logs at Sta. Maria, Zamboanga del Norte, was covered by Log Sale/Purchase Agreement dated November 10, 1994.⁵ Of the total logs shipped on M/V Seven Logmaster, 156 logs fell overboard on its way to Davao City. SBSC wrote CASI to withhold payment of 110 logs out of the total 156 logs washed overboard upon its claim that it was due to petitioner’s insistence to load 2 additional round logs after the vessel had been lashed and trimmed that caused the vessel to list and the logs to fall to the sea. ⁶ On March 3, 1995, CASI offered to pay the petitioner the sum of ₱1,309,300.49. Petitioner accepted the offer and received said amount from CASI. ⁷ On December 11, 1997, petitioner filed a complaint⁸ for collection of sum of money and damages against CASI and SBSC with the Regional Trial Court of Makati City. On the basis of the stipulation of facts entered into by the parties and the documents they submitted, the RTC issued a Pre-Trial Order⁹ dated August 6, 1999. On September 22, 1999, petitioner filed a Motion for Summary Judgment with the trial court, which was opposed by CASI and SBSC. On October 29, 1999, the RTC denied petitioner’s motion for summary judgment, in this wise: Records show that extended efforts were exerted to formulate stipulations in aid of abbreviating proceedings, hence the August 6, 1999 formal Pre-Trial Order (a) setting forth stipulations and (b) an agreement to identify residual issues relative to i sufficiency of documentation of logs, ii responsibility for the loading and stowing of the logs on MV Logmaster, iii liability for the value of 156 logs, iv the breach of contract of sale, if any, v the extent of plaintiff’s claim, vi liability of defendants, if any, vii plaintiff’s liability on [A]lcantara’s counterclaim, and viii liability of Seven Brothers vis-à-vis Alcantara’s cross-claim. Parties and counsel are bound by the clear recitals of the August 6, 1999 Pre-Trial Order, and in that context the subject motion for summary judgment may not be acted upon, on a perception that identified residual issues must be addressed. WHEREFORE, plaintiff’s motion for summary judgment is accordingly denied. The November 10, and 24, 1999, and January 5 and 6, 2000 hearing dates are maintained. SO ORDERED.¹⁰ Forthwith, petitioner filed a petition for certiorari with the Court of Appeals to annul and set aside the RTC order. On August 3, 2000, the Court of Appeals sustained the RTC orders denying the motion for summary judgment. The Court of Appeals opined that there exists a genuine issue which must be tried, viz: Considering therefore that genuine and triable issue exists in the instant case, this Court finds no grave abuse of discretion on the part of public respondent judge when it held in its assailed Order that the "parties and counsel are bound by the clear recitals of the August 6, 1999 Pre-Trial Order, and in that context the subject motion for summary judgment may not be acted upon, on a perception that identified residual issues must be addressed." WHEREFORE, premises considered, the petition is hereby DISMISSED for lack of merit. SO ORDERED.¹¹ Petitioner filed a motion for reconsideration of the above CA decision but the same was denied in a resolution dated October 12, 2000.¹² Before us, petitioner now impugns the decision of the Court of Appeals on three grounds, among them: I THE FACTUAL ISSUE POINTED OUT BY THE COURT OF APPEALS WAS NOT AN ISSUE STIPULATED UPON BY THE PARTIES (A) THE ISSUE OF THE ALLEGED FAULT OR NEGLIGENCE OF THE PETITIONER IN ALLEGEDLY LOADING TWO (2) ADDITIONAL LOGS WAS NOT AN ISSUE THAT WAS PENDING IN THE COURT BELOW (B) ASSUMING THE LOADING OF THE TWO (2) ADDITIONAL LOGS IS A RESIDUAL ISSUE, THE PRESENTATION OF EVIDENCE ON THIS POINT CANNOT BE ALLOWED UNDER THE RULES OF EVIDENCE II PETITIONER IS ENTITLED TO A SUMMARY JUDGMENT AS A MATTER OF LAW DUE TO THE ABSENCE OF ANY FACTUAL ISSUES III THE FACTUAL AND LEGAL BASES FOR THE PETITIONER’S MOTION FOR SUMMARY JUDGMENT WERE NOT CONTRADICTED OR OTHERWISE OPPOSED BY AFFIDAVITS¹³ Is petitioner entitled by law to a summary judgment by the RTC? To resolve this issue we must inquire now whether the CA erred in holding that no grave abuse of discretion was committed when the RTC denied petitioner’s motion for summary judgment. Petitioner contends that under prevailing jurisprudence, summary judgment by the trial court is authorized if the pleadings, depositions and admissions on file together with the affidavits, show that, except as to the amount of damages, there is no issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.¹⁴ According to petitioner, on the basis of the stipulation of facts of the parties and on the exhibits submitted, it is entitled to a summary judgment inasmuch as there are no genuine issues raised in the case below that requires trial. After a careful consideration of the submissions of the parties, we hold that this contention lacks merit. Petitioner filed its motion for summary judgment pursuant to Section 1, Rule 35 of the 1997 Rules of Court, which states that: SECTION 1. Summary judgment for claimant.— A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the pleading in answer thereto has been served, move with supporting affidavits, depositions or admissions for a summary judgment in his favor upon all or any part thereof. A court may grant a summary judgment to settle expeditiously a case if, on motion of either party, there appears from the pleadings, depositions, admissions, and affidavits that no important issues of fact are involved, except the amount of damages. In such event, the moving party is entitled to a judgment as a matter of law. Trial courts have limited authority to render summary judgments and may do so only when there is clearly no genuine issue as to any material fact.¹⁵ In other words, in a motion for summary judgment, the crucial question is: are the issues raised in the pleadings *genuine, sham* or *fictitious, as shown by affidavits, depositions or admissions accompanying the motion? ¹⁶ In Evadel Realty and Development Corporation v. Soriano,¹⁷ this Court defined what a "genuine issue" is, in this wise: A "genuine issue" is an issue of fact which requires the presentation of evidence as distinguished from a sham, fictitious, contrived or false claim. When the facts as pleaded appear uncontested or undisputed, then there is no real or genuine issue or question as to the facts, and summary judgment is called for. The party who moves for summary judgment has the burden of demonstrating clearly the absence of any genuine issue of fact, or that the issue posed in the complaint is patently unsubstantial so as not to constitute a genuine issue for trial. Trial courts have limited authority to render summary judgments and may do so only when there is clearly no genuine issue as to any material fact. When the facts as pleaded by the parties are disputed or contested, proceedings for summary judgment cannot take the place of trial. (Emphasis supplied) The parties’ respective pleadings show that there are genuine issues of fact that necessitate formal trial. Petitioner’s complaint before the RTC avers facts on which it relies to support its claim for damages. Specifically, petitioner sought to recover the value of the logs that were lost and washed overboard M/V Seven Logmaster* chartered by CASI. Petitioner claims that at the time of the loss, ownership over said logs was already transferred from petitioner as seller, to CASI as buyer. As owner, CASI must bear the loss, according to petitioner. But CASI, in its answer,¹⁸ maintains that it should not be held liable for the purchase price or value of said logs considering that the logs were washed away and lost due to the fault and negligence of petitioner and SBSC or their agents. SBSC, in its answer,¹⁹ disowns liability for the loss of said logs and imputes fault and negligence committed by petitioner and CASI. In our view, it is beyond cavil that basic factual issues of when, how, and who caused the damage to the cargo must be established to determine if petitioner is, in fact and in law, entitled to recover damages. Put simply, since petitioner’s allegations appear contested by the other parties, it is erroneous to conclude prematurely that there are no real or genuine issues or questions of facts in this case. That being so, a full-blown trial on the merits and presentation of additional evidence is called for. As aptly explained by the appellate court: The special and affirmative defenses raised by private respondents CASI and SBSC invoking, inter alia, the alleged fault and negligence of petitioner as the proximate cause of the loss of the subject logs indubitably tender a genuine and factual issue as regards the proximate cause of the loss necessitating trial on the merits and presentation of evidence so that the trial court can properly determine which, among the parties, must shoulder the loss. In fact, said factual controversy was clearly identified in public respondent’s August 6, 1999 Pre-Trial Order, to wit: Pre-Trial Order In aid of abbreviating proceedings, appearing counsel for plaintiff and both defendants entered into stipulations as follows: . . . 7. Of the total shipment of logs on MV ‘Seven Logmaster’ 156 logs fell or were washed overboard on its way to Davao City; 8. Seven Brothers wrote Alcantara to withhold payment of 110 logs out of the total 156 logs because plaintiff insisted to load 2 additional round logs after the vessel had been lashed and trimmed, causing the vessel to list and the logs to fall to the sea; . . . By agreement of the parties, the residual issues to be addressed are: a. Are the shipments of the 273 logs from Polloc, Parang, Maguindanao and 370 logs from Sta. Maria, Zamboanga del Norte sufficiently documented in accordance with the agreement/contract between the parties and/or DENR rules and regulations. If not, will such insufficiency nullify the contract of sale? b. Who was responsible for the loading and s[t]owing of the logs on board [the] vessel Logmaster? c. Who is liable for the value of the 156 pcs. of logs? d. Who committed the breach, if any, of the contract of sale; if there was such a breach, was it induced and by whom? e. What is the extent of plaintiff’s claim? f. Are defendants liable for the plaintiff’s claim? g. Is plaintiff liable for defendant Alcantara’s counterclaim? h. Is defendant Seven Brothers liable for Alcantara’s crossclaim and vice versa? … (Emphasis supplied) ²⁰ Following Evadel, we hold that the instant case raise genuine and factual issues not proper in a summary judgment. Moreover, as ruled in R and B Surety & Insurance Co., Inc. v. Savellano,²¹ the rendition of summary judgment is not justified when the defending party tenders vital issues which call for the presentation of evidence. To elucidate, herein respondents raised the issue that petitioner’s own negligence was the proximate cause of the loss inasmuch as it loaded two (2) more logs without the consent of respondents. Notably, the RTC found respondents’ defense to be a genuine, not a sham issue, which finding was affirmed by the Court of Appeals. From this consistent ruling of the trial and the appellate courts, we cannot lightly deviate. We agree that respondents’ defense necessitates reception of additional evidence, since the matter cannot be threshed out judiciously by a summary judgment. Further, petitioner itself tenders a procedural issue when it claims that respondents are barred from adducing evidence in support of their defense. According to petitioner, respondents’ defense runs counter to their admission, stated in the Pre-Trial Order of the RTC, that only the 273 logs and the 370 logs were delivered on board, without any mention of the two additional logs. Stipulation of facts may include only those which are undisputed by the parties. It could not include those facts which are contentious or disputed. Thus, it may appear in paragraph 6 of the Stipulation of Facts²² stated that respondent CASI’s agent signed the conforme attesting to the receipt of the 273 logs as well as of the 370 logs without any mention of the two additional logs. But said paragraph 6 must be read in relation to paragraph 8 thereof, which states that SBSC wrote CASI to withhold the payment of damages to petitioner for the lost logs on the ground that petitioner insisted on loading 2 additional logs on top of the other logs after the cargo had been lashed and trimmed causing the vessel to tilt and the logs to fall overboard.²³ Hence, it cannot be said that respondents are barred from presenting evidence to prove their defense that petitioner itself caused the loss of the cargo. Notwithstanding certain stipulated facts, when material allegations as pleaded by the parties are disputed, including the interpretation of the stipulation itself, then it cannot be asserted that there was no real issue necessitating a formal trial. For there can be no summary judgment where questions of fact are in issue or where material allegations of the pleadings are in dispute.²⁴ As the party moving for summary judgment, petitioner has the burden of clearly demonstrating the absence of any genuine issue of fact. Any doubt as to the existence of such issue, in our view, must be resolved against the movant. The rule on summary judgments was devised to aid parties in avoiding the expense and loss of time involved in a trial. Ironically, petitioner, by resorting to a motion for summary judgment in the hope of expediting recovery of its claim, succeeded to delay the resolution of its own case. WHEREFORE, finding no reversible error committed by the Court of Appeals, the instant petition is denied for lack of merit. The decision dated August 3, 2000 of the Court of Appeals in CA-G.R. SP No. 57208 is AFFIRMED. Costs against petitioner. SO ORDERED. Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur. Puno, J., (Chairman), on official leave. Footnotes ¹ Rollo, pp. 52-58. Penned by Associate Justice Quirino D. Abad Santos, Jr., with Associate Justices Romeo A. Brawner and Andres B. Reyes, Jr. concurring. ² Records, p. 429. ³ Id. at 364. ⁴ Ibid. ⁵ Id. at 364-365. ⁶ Id. at 365. ⁷ Ibid. ⁸ Id. at 1-10. ⁹ Id. at 364-366. ¹⁰ Records, p. 429. ¹¹ Rollo, p. 58. ¹² Id. at 60. ¹³ Id. at 18. ¹⁴ Id. at 19, citing Galicia v. Polo, G.R. No. 49668, 14 November 1989, 179 SCRA 371, 376. ¹⁵ Concrete Aggregates Corporation v. Court of Appeals, G.R. No. 117574, 2 January 1997, 266 SCRA 88, 95. ¹⁶ Manufacturers Hanover Trust Co. v. Guerrero, G.R. No. 136804, 19 February 2003, 397 SCRA 709, 714. ¹⁷ G.R. No. 144291, 20 April 2001, 357 SCRA 395, 401. ¹⁸ Records, pp. 59-68. ¹⁹ Id. at 46-54. ²⁰ Rollo, pp. 56-57. ²¹ No. L-45234, 8 May 1985, 136 SCRA 312, 321, cited in I Regalado, Remedial Law Compendium 360 (1997 Ed). ²² Records, p. 365. ²³ Ibid. ²⁴ Manufacturers Hanover Trust Co. v. Guerrero, G.R. No. 136804, 19 February 2003, 397 SCRA 709, 714, 715. The Lawphil Project - Arellano Law Foundation