585 Phil. 537
CHICO-NAZARIO, J.:
The Motion To Dismiss Complaint Against Defendant Marilyn Andal Bitanga filed on November 12, 2001 is denied for lack of merit considering that Sec. 4, Rule 3, of the Rules of Court (1997) specifically provides, as follows:Petitioner filed with the RTC on 12 November 2001, his Answer[13] to respondent's Complaint averring therein that he never made representations to respondent that Macrogen Realty would faithfully comply with its obligations under the Compromise Agreement. He did not offer to guarantee the obligations of Macrogen Realty to entice respondent to enter into the Compromise Agreement but that, on the contrary, it was respondent that required Macrogen Realty to offer some form of security for its obligations before agreeing to the compromise. Petitioner further alleged that his wife Marilyn was not aware of the obligations that he assumed under both the Compromise Agreement and the Contract of Guaranty as he did not inform her about said contracts, nor did he secure her consent thereto at the time of their execution."SEC. 4. Spouses as parties. - Husband and wife shall sue or be sued jointly, except as provided by law."and that this case does not come within the exception.[12]
On 20 September 2002, prior to the trial proper, respondent filed a Motion for Summary Judgment.[15] Respondent alleged therein that it was entitled to a summary judgment on account of petitioner's admission during the pre-trial of the genuineness and due execution of the Contract of Guaranty. The contention of petitioner and Marilyn that they were entitled to the benefit of excussion was not a genuine issue. Respondent had already exhausted all legal remedies to collect from Macrogen Realty, but its efforts proved unsuccessful. Given that the inability of Macrogen Realty as debtor to pay the amount of its debt was already proven by the return of the writ of execution to CIAC unsatisfied, the liability of petitioner as guarantor already arose.[16] In any event, petitioner and Marilyn were deemed to have forfeited their right to avail themselves of the benefit of excussion because they failed to comply with Article 2060[17] of the Civil Code when petitioner ignored respondent's demand letter dated 3 January 2001 for payment of the amount he guaranteed.[18] The duty to collect the supposed receivables of Macrogen Realty from its creditors could not be imposed on respondent, since petitioner and Marilyn never informed respondent about such uncollected credits even after receipt of the demand letter for payment. The allegation of petitioner and Marilyn that they could not respond to respondent's demand letter since they did not receive the same was unsubstantiated and insufficient to raise a genuine issue of fact which could defeat respondent's Motion for Summary Judgment. The claim that Marilyn never participated in the transactions that culminated in petitioner's execution of the Contract of Guaranty was nothing more than a sham.
(1) whether the defendants were liable under the contract of guarantee dated April 17, 2000 entered into between Benjamin Bitanga and the plaintiff;(2) whether defendant wife Marilyn Bitanga is liable in this action;(3) whether the defendants are entitled to the benefit of excussion, the plaintiff on the one hand claiming that it gave due notice to the guarantor, Benjamin Bitanga, and the defendants contending that no proper notice was received by Benjamin Bitanga;(4) if damages are due, which party is liable; and(5) whether the benefit of excussion can still be invoked by the defendant guarantor even after the notice has been allegedly sent by the plaintiff although proper receipt is denied.[14]
WHEREFORE, summary judgment is rendered ordering defendants SPOUSES BENJAMIN BITANGA and MARILYN ANDAL BITANGA to pay the [herein respondent], jointly and severally, the amount of P6,000,000.00, less P20,242.23 (representing the amount garnished bank deposit of MACROGEN in the Planters Bank, Buendia Branch); and the costs of suit.Petitioner and Marilyn filed a Motion for Reconsideration of the afore-quoted Decision, which the RTC denied in an Order dated 26 January 2003.[21]
Within 10 days from receipt of this partial decision, the [respondent] shall inform the Court whether it shall still pursue the rest of the claims against the defendants. Otherwise, such claims shall be considered waived.[20]
UPON THE VIEW WE TAKE OF THIS CASE, THUS, the judgment appealed from must be, as it hereby is, MODIFIED to the effect that defendant-appellant Marilyn Bitanga is adjudged not liable, whether solidarily or otherwise, with her husband the defendant-appellant Benjamin Bitanga, under the compromise agreement or the contract of guaranty. No costs in this instance.[22]In holding that Marilyn Bitanga was not liable, the Court of Appeals cited Ramos v. Court of Appeals,[23] in which it was declared that a contract cannot be enforced against one who is not a party to it. The Court of Appeals stated further that the substantial ownership of shares in Macrogen Realty by Marilyn Bitanga was not enough basis to hold her liable.
THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE VALIDITY OF THE PARTIAL SUMMARY JUDGMENT BY THE REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH 96, DESPITE THE CLEAR EXISTENCE OF DISPUTED GENUINE AND MATERIAL FACTS OF THE CASE THAT SHOULD HAVE REQUIRED A TRIAL ON THE MERITS.As in the two courts below, it is petitioner's position that summary judgment is improper in Civil Case No. Q-01-45041 because there are genuine issues of fact which have to be threshed out during trial, to wit:II
THE COURT OF APPEALS GRAVELY ERRED IN NOT UPHOLDING THE RIGHT OF PETITIONER BENJAMIN M. BITANGA AS A MERE GUARANTOR TO THE BENEFIT OF EXCUSSION UNDER ARTICLES 2058, 2059, 2060, 2061, AND 2062 OF THE CIVIL CODE OF THE PHILIPPINES.[25]
(A) Whether or not there was proper service of notice to petitioner considering the said letter of demand was allegedly received by one Dette Ramos at Macrogen office and not by him at his residence.We are not persuaded by petitioner's arguments.
(B) Whether or not petitioner is entitled to the benefit of excussion?[26]
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.For a summary judgment to be proper, the movant must establish two requisites: (a) there must be no genuine issue as to any material fact, except for the amount of damages; and (b) the party presenting the motion for summary judgment must be entitled to a judgment as a matter of law. Where, on the basis of the pleadings of a moving party, including documents appended thereto, no genuine issue as to a material fact exists, the burden to produce a genuine issue shifts to the opposing party. If the opposing party fails, the moving party is entitled to a summary judgment.[27]
SEC. 6. Personal service. - Service of the papers may be made by delivering personally a copy to the party or his counsel, or by leaving it in his office with his clerk or with a person having charge thereof. If no person is found in his office, or his office is not known, or he has no office, then by leaving the copy, between the hours of eight in the morning and six in the evening, at the party's or counsel's residence, if known, with a person of sufficient age and discretion then residing therein.The affidavit of Mr. Robert O. Pagdilao, messenger of respondent's counsel states in part:
We emphasize that when petitioner signed the Contract of Guaranty and assumed obligation as guarantor, his address in the said contract was the same address where the demand letter was served.[32] He does not deny that the said place of service, which is the office of Macrogen, was also the address that he used when he signed as guarantor in the Contract of Guaranty. Nor does he deny that this is his office address; instead, he merely insists that the person who received the letter and signed the receiving copy is not an employee of his company. Petitioner could have easily substantiated his allegation by a submission of an affidavit of the personnel manager of his office that no such person is indeed employed by petitioner in his office, but that evidence was not submitted.[33] All things are presumed to have been done correctly and with due formality until the contrary is proved. This juris tantum presumption stands even against the most well-reasoned allegation pointing to some possible irregularity or anomaly.[34] It is petitioner's burden to overcome the presumption by sufficient evidence, and so far we have not seen anything in the record to support petitioner's charges of anomaly beyond his bare allegation. Petitioner cannot now be heard to complain that there was an irregular service of the demand letter, as it does not escape our attention that petitioner himself indicated "314 Sen. Gil Puyat Avenue, Makati City" as his office address in the Contract of Guaranty.
- On 4 January 2001, Atty. Jose Vicente B. Salazar, then one of the Associates of the ACCRA Law Offices, instructed me to deliver to the office of Mr. Benjamin Bitanga a letter dated 3 January 2001, pertaining to Construction Industry Arbitration Commission (hereafter, "CIAC") Case No. 99-56, entitled "Pyramid Construction Engineering Corporation vs. Macrogen Realty Corporation."
- As instructed, I immediately proceeded to the office of Mr. Bitanga located at the 12th Floor, Planters Development Bank Building, 314 Senator Gil Puyat Avenue, Makati City. I delivered the said letter to Ms. Dette Ramos, a person of sufficient age and discretion, who introduced herself as one of the employees of Mr. Bitanga and/or of the latter's companies.[31] (Emphasis supplied.)
Here, the issue of non-receipt of the letter of demand is a sham or pretended issue, not a genuine and substantial issue. Indeed, against the positive assertion of Mr. Roberto O. Pagdilao (the private courier) in his affidavit that he delivered the subject letter to a certain Ms. Dette Ramos who introduced herself as one of the employees of [herein petitioner] Mr. Benjamin Bitanga and/or of the latter's companies, said [petitioner] merely offered a bare denial. But bare denials, unsubstantiated by facts, which would be admissible in evidence at a hearing, are not sufficient to raise a genuine issue of fact sufficient to defeat a motion for summary judgment.[36]We further affirm the findings of both the RTC and the Court of Appeals that, given the settled facts of this case, petitioner cannot avail himself of the benefit of excussion.
Art. 2060. In order that the guarantor may make use of the benefit of excussion, he must set it up against the creditor upon the latter's demand for payment from him, and point out to the creditor available property of the debtor within Philippine territory, sufficient to cover the amount of the debt.[38]The afore-quoted provision imposes a condition for the invocation of the defense of excussion. Article 2060 of the Civil Code clearly requires that in order for the guarantor to make use of the benefit of excussion, he must set it up against the creditor upon the latter's demand for payment and point out to the creditor available property of the debtor within the Philippines sufficient to cover the amount of the debt.[39]
Art. 2059. This excussion shall not take place:As the Court of Appeals correctly ruled:
x x x x
(5) If it may be presumed that an execution on the property of the principal debtor would not result in the satisfaction of the obligation.
We find untenable the claim that the [herein petitioner] Benjamin Bitanga cannot be compelled to pay Pyramid because the Macrogen Realty has allegedly sufficient assets. Reason: The said [petitioner] had not genuinely controverted the return made by Sheriff Joseph F. Bisnar, who affirmed that, after exerting diligent efforts, he was not able to locate any property belonging to the Macrogen Realty, except for a bank deposit with the Planter's Bank at Buendia, in the amount of P20,242.23. It is axiomatic that the liability of the guarantor arises when the insolvency or inability of the debtor to pay the amount of debt is proven by the return of the writ of execution that had not been unsatisfied.[40]IN ALL, we fail to point out any impropriety in the rendition of a summary judgment in favor of the respondent.
This Guaranty made and executed this 17th day of April 2000 at Makati City, Philippines, by and between:[7] Rollo, p. 101.
Benajamin M. Bitanga, of legal age, Filipino, married, with office address located at 314 Sen. Gil Puyat Avenue, Makati City (hereafter referred to as the "Guarantor")- in favor of -
PYRAMID CONSTRUCTION ENGINEERING CORPORATION, a corporation organized and existing under the laws of the Republic of the Philippines, with office address located at Pyramid Building, 124 Kaingin Road, Balintawak, Quezon City, represented herein by its duly authorized representative, Mr. Engracio Ang, Jr. (hereafter referred to as "PYRAMID").W I T N E S S E T H: That -
WHEREAS, on 17 April 2000, Pyramid and Macrogen Realty Corporation (hereafter referred to as the "Debtor") executed a Compromise Agreement (hereafter referred to as "Agreement"), acknowledged before Jose Vicente B. Salazar Notary Public for Makati City, as Doc. No. 118, Page 25, Book No. 2, Series of 2000;
WHEREAS, in said Agreement, Macrogen, in order to put an end to CIAC Case No. 36-99, agreed to pay and Pyramid has agreed to accept the total amount of SIX MILLION PESOS (P6,000,000.00), payable in six monthly installments, on the 15th day of each month, beginning in June 15, 2000;
WHEREAS, the Guarantor agrees to execute and deliver to Pyramid an irrevocable and unconditional guaranty for the due and punctual payment of the principal amount of Six Million Pesos (P6,000,000.00) due and payable by the Debtor to Pyramid under the Agreement.
NOW, THEREFORE, for and in consideration of the foregoing and for other good and valuable consideration, receipt of which is hereby acknowledged by the Guarantor, the latter agrees as follows:SECTION 1. SCOPE OF GUARANTY
1.1. The Guarantor hereby absolutely, unconditionally and irrevocably guarantees to Pyramid the full and complete payment by Debtor of the principal amount of Six Million pesos (P6,000,000.00).
1.2. The Guarantor irrevocably and unconditionally agrees that this Guaranty shall be a continuing guaranty and as such shall remain in full force and effect and be binding on the Guarantor until all sums payable by the Debtor under and pursuant to the Agreement shall have been fully paid by the Debtor. (Rollo, pp. 136-137.)
Art. 2058. The guarantor cannot be compelled to pay the creditor unless the latter has exhausted all the property of the debtor, and has resorted to all the legal remedies against the debtor.[39] JN Development Corporation v. Philippine Export and Foreign Loan Guarantee Corporation, supra note 37.
Art. 2061. The guarantor having fulfilled all the conditions required in the preceding article, the creditor who is negligent in exhausting the property pointed out shall suffer the loss, to the extent of said property, for the insolvency of the debtor resulting from such negligence.
Art. 2062. In every action by the creditor, which must be against the principal debtor alone, except in the cases mentioned in article 2059, the former shall ask the court to notify the guarantor of the action. The guarantor may appear so that he may, if he so desire, set up such defenses as are granted him by law. The benefit of excussion mentioned in article 2058 shall always be unimpaired, even if judgment should be rendered against the principal debtor and the guarantor in case of appearance by the latter.