503 Phil. 103
CHICO-NAZARIO, J.:
2- That it denies generally and specifically the allegations contained in paragraphs 3, 4, 5, 6, 7 and 8 thereof for lack of knowledge and information sufficient to form a belief as to the truth of the matters therein alleged, the truth being those alleged in the Special and Affirmative Defenses hereinbelow contained;On 06 December 1984, respondent Morales filed his manifestation together with his answer wherein he likewise renounced any liability on the promissory note, thus:
3- ANSWERING FURTHER, and by way of a first special and affirmative defense, defendant herein states that the promissory note in question is void for want of valid consideration and/or there was no valuable consideration involved as defendant herein did not receive any consideration at all;
4- ANSWERING FURTHER, and by way of a second special affirmative defense, defendant herein alleges that no demand has ever been sent to nor received by herein defendant and if ever demands were made, denies any liability as averred therein.
5- ANSWERING FURTHER, and by way of a third special and affirmative defense, defendant herein avers that the complaint states no cause of action and has no basis either in fact or in law; ...
VERIFICATION
I, JEANETTE D. TOLENTINO, of legal age, after having been duly sworn to in accordance with law, depose and state:
That I am the Controller of Del Monte Motor Works, Inc., one of the defendants in this case.
That for and in behalf of the defendant corporation, I caused the preparation of the above-narrated answer.
That I have read the contents thereof and they are true of my own knowledge.
(SGD) JEANNETTE D. TOLENTINO[4]
1. He ADMIT[S] paragraphs 1, 2, and 3 of the complaint with a qualification in paragraph 3 thereof that he has long been separated from his wife and the system governing their property relations is that of complete separation of property and not that of conjugal partnership of gain[s];On 26 December 1984, the trial court denied petitioner's motion to declare respondents in default and admitted their respective answers.[6]
2. He [DENIES], generally and specifically, the allegations contained in paragraphs 4, 5, 6, 7, and 8 thereof, for lack of knowledge and information sufficient to form a belief and as to the truth of the matter therein averred, the truth being those alleged in the Special And Affirmative Defenses hereinbelow pleaded;
...SPECIAL AND AFFIRMATIVE DEFENSES
4. He has never signed the promissory note attached to the complaint in his personal and/or individual capacity as such;
5. That the said promissory note is ineffective, unenforceable and void for lack of valid consideration;
6. That even admitting, argumenti gratia, the validity and execution of the questioned promissory note, still, defendant herein cannot be bound personally and individually to the said obligations as banking procedures requires, it being a standard operating procedure of all known banking institution, that to hold a borrower jointly and severally liable in his official as well as personal capacity, the borrower must sign a Suretyship Agreement or at least, a continuing guarranty with that of the corporation he represent(s) but which in this case is wanting;
7. That transaction/obligation in question did not, in any way, redound/inure to the benefit of the conjugal partnership of gain, as there is no conjugal partnership of gain to speak with, defendant having long been separated from his wife and their property relation is governed by the system of complete separation of property, and more importantly, he has never signed the said promissory note in his personal and individual capacity as such;
VERIFICATION
That I, NARCISO MORALES, after having been duly sworn to in accordance with law, hereby depose and declare that:
I am one of the named defendant[s] in the above-entitled case;
I have cause[d] the preparation of the foregoing Answer upon facts and figures supplied by me to my retained counsel; have read each and every allegations contained therein and hereby certify that the same are true and correct of my own knowledge and information.(SGD) NARCISO MORALES
Affiant[5]
WHEREFORE, the instant case against defendants Del Monte Motor Works, Inc. and Narciso O. Morales and spouse, is hereby DISMISSED, with costs against the plaintiff.The trial court's finding was affirmed by the Court of Appeals in the assailed decision now before us. The dispositive portion of the appellate court's decision reads:
WHEREFORE, PREMISES CONSIDERED, the decision of the Regional Trial Court, Manila, Branch 27, dated December 28, 1987 dismissing plaintiff-appellant['s] complaint is hereby AFFIRMED. Cost against the plaintiff-appellant.[20]Petitioner thereafter filed a motion for reconsideration dated 14 December 1999 which was denied for lack of merit in a resolution of the Court of Appeals promulgated on 11 May 2000.[21]
The petition is meritorious.I
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT FOUND THAT PRIVATE RESPONDENTS DENIED THE MATERIAL ALLEGATIONS OF PETITIONER SOLIDBANK'S COMPLAINT, DESPITE THE PRESENCE OF INDUBITABLE FACTS CLEARLY POINTING TO THE FACT THAT SAID PRIVATE RESPONDENTS ADMITTED THE GENUINENESS AND DUE EXECUTION OF THE SUBJECT PROMISSORY NOTE.II
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT UPHELD THE EXCLUSION OF EXHIBIT `E', THE SECOND ORIGINAL OF THE PROMISSORY NOTE, DESPITE THE FACT THAT THE ORIGINAL OF EXHIBIT `A' (XEROX COPY OF THE DUPLICATE ORIGINAL OF THE PROMISSORY NOTE) WAS ACTUALLY IN THE POSSESSION OF PRIVATE RESPONDENTS, THUS WARRANTING THE ADMISSION OF SECONDARY EVIDENCE.III
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT THE TRIAL JUDGE SHOULD HAVE INHIBITED HIMSELF FROM TAKING COGNIZANCE OF AND FROM TRYING AND DECIDING THE INSTANT CASE CONSIDERING HIS PERCEIVED AND MANIFEST BIAS AND PARTIALITY IN FAVOR OF THE PRIVATE RESPONDENTS TO THE GRAVE PREJUDICE OF PETITIONER SOLIDBANK.[22]
There can be no dispute to the fact that the allegations in the answer (Record, p. 20, 26-27), of both defendants, they denied generally and specifically under oath the genuineness and due execution of the promissory note and by way of special and affirmative defenses herein states that he (MORALES) never signed the promissory note attached to the complaint (Exh. A) in his personal and/or individual capacity. Moreover, what appears in the record (Record, p. 20) was an admission of paragraphs 1 & 2 but they deny generally and specifically the rest of the allegations. It would be considered that there is a sufficient compliance of the requirement of the law for specific denial.[23]We hold otherwise.
SEC. 8. How to contest such documents.—When an action or defense is founded upon a written instrument, copied in or attached to the corresponding pleading as provided in the preceding section, the genuineness and due execution of the instrument shall be deemed admitted unless the adverse party, under oath, specifically denies them and sets forth what he claims to be the facts; but the requirement of an oath does not apply when the adverse party does not appear to be a party to the instrument or when compliance with an order for an inspection of the original instrument is refused.[24]In the case of Permanent Savings and Loan Bank v. Mariano Velarde,[25] this Court held that -
. . . Respondent also denied any liability on the promissory note as he allegedly did not receive the amount stated therein, and the loan documents do not express the true intention of the parties. Respondent reiterated these allegations in his "denial under oath," stating that the "promissory note sued upon, assuming that it exists and bears the genuine signature of herein defendant, the same does not bind him and that it did not truly express the real intention of the parties as stated in the defenses...In this case, both the court a quo and the Court of Appeals erred in ruling that respondents were able to specifically deny the allegations in petitioner's complaint in the manner specifically required by the rules. In effect, respondents had, to all intents and purposes, admitted the genuineness and due execution of the subject promissory note and recognized their obligation to petitioner.
Respondent's denials do not constitute an effective specific denial as contemplated by law. In the early case of Songco vs. Sellner,[26] the Court expounded on how to deny the genuineness and due execution of an actionable document, viz.:. . . This means that the defendant must declare under oath that he did not sign the document or that it is otherwise false or fabricated. Neither does the statement of the answer to the effect that the instrument was procured by fraudulent representation raise any issue as to its genuineness or due execution. On the contrary such a plea is an admission both of the genuineness and due execution thereof, since it seeks to avoid the instrument upon a ground not affecting either.[27]
Sec. 3. Original document must be produced; exceptions.—When the subject of inquiry is the contents of a document, no evidence shall be admissible other than the original document itself, except in the following cases:The "best evidence rule," according to Professor Thayer, first appeared in the year 1699-1700 when in one case involving a goldsmith, Holt, C. J., was quoted as stating that they should take into consideration the usages of trade and that "the best proof that the nature of the thing will afford is only required."[29] Over the years, the phrase was used to describe rules which were already existing such as the rule that the terms of a document must be proved by the production of the document itself, in preference to evidence about the document; it was also utilized to designate the hearsay rule or the rule excluding assertions made out of court and not subject to the rigors of cross-examination; and the phrase was likewise used to designate the group of rules by which testimony of particular classes of witnesses was preferred to that of others.[30]
(a) When the original has been lost or destroyed, or cannot be produced in court, without bad faith on the part of the offeror;
(b) When the original is in the custody or under the control of the party against whom the evidence is offered, and the latter fails to produce it after reasonable notice;
(c) When the original consists of numerous accounts or other documents which cannot be examined in court without great loss of time and the fact sought to be established from them is only the general result of the whole; and
(d) When the original is a public record in the custody of a public officer or is recorded in a public office.
(1) that precision in presenting to the court the exact words of the writing is of more than average importance, particularly as respects operative or dispositive instruments, such as deeds, wills and contracts, since a slight variation in words may mean a great difference in rights, (2) that there is a substantial hazard of inaccuracy in the human process of making a copy by handwriting or typewriting, and (3) as respects oral testimony purporting to give from memory the terms of a writing, there is a special risk of error, greater than in the case of attempts at describing other situations generally. In the light of these dangers of mistransmission, accompanying the use of written copies or of recollection, largely avoided through proving the terms by presenting the writing itself, the preference for the original writing is justified.[32]Bearing in mind that the risk of mistransmission of the contents of a writing is the justification for the "best evidence rule," we declare that this rule finds no application to this case. It should be noted that respondents never disputed the terms and conditions of the promissory note thus leaving us to conclude that as far as the parties herein are concerned, the wording or content of said note is clear enough and leaves no room for disagreement. In their responsive pleadings, respondents' principal defense rests on the alleged lack of consideration of the promissory note. In addition, respondent Morales also claims that he did not sign the note in his personal capacity. These contentions clearly do not question the "precise wording"[33] of the promissory note which should have paved the way for the application of the "best evidence rule." It was, therefore, an error for the Court of Appeals to sustain the decision of the trial court on this point.
Another error assigned by the appellant is the fact that the lower court took into consideration the documents attached to the complaint as a part thereof, without having been expressly introduced in evidence. This was no error. In the answer of the defendants there was no denial under oath of the authenticity of these documents. Under Section 103 of the Code of Civil Procedure, the authenticity and due execution of these documents must, in that case, be deemed admitted. The effect of this is to relieve the plaintiff from the duty of expressly presenting such documents as evidence. The court, for the proper decision of the case, may and should consider, without the introduction of evidence, the facts admitted by the parties.[37]Anent petitioner's allegation that the presiding judge of the court a quo should have inhibited himself from this case, we resolve this issue against petitioner.
SECTION 1. Demurrer to evidence.—After the plaintiff has completed the presentation of his evidence, the defendant may move for dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. If his motion is denied, he shall have the right to present evidence. If the motion is granted but on appeal the order of dismissal is reversed he shall be deemed to have waived the right to present evidence.A demurrer to evidence abbreviates judicial proceedings, it being an instrument for the expeditious termination of an action. Caution, however, must be exercised by the party seeking the dismissal of a case upon this ground as under the rules, if the movant's plea for the dismissal on demurrer to evidence is granted and the order of dismissal is reversed on appeal, he loses his right to adduce evidence. If the defendant's motion for judgment on demurrer to evidence is granted and the order is subsequently reversed on appeal, judgment is rendered in favor of the adverse party because the movant loses his right to present evidence.[40] The reviewing court cannot remand the case for further proceedings; rather, it should render judgment on the basis of the evidence presented by the plaintiff.[41]