SECOND DIVISION
[G.R. No. 224194. June 19, 2019.]
SWIM PHILS., INC., petitioner, vs.CORS RETAIL CONCEPT, INC., NORMAN P. LOZENDO, AND "JOHN DOE", respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Second Division, issued a Resolution dated19 June 2019which reads as follows:
"G.R. No. 224194 — SWIM PHILS., INC. vs. CORS RETAIL CONCEPT, INC., NORMAN P. LOZENDO, and "JOHN DOE"
THE CASE
This Petition for Review 1 assails the following issuances of the Regional Trial Court, Branch 201, Las Piñas City in Civil Case No. 14-0107 entitled Swim Phils., Inc. vs. CORS Retail Concept, Inc., Norman P. Lozendo, and "John Doe":
1. Judgment 2 dated November 16, 2015, dismissing petitioner's complaint for damages; and
2. Order 3 dated April 18, 2016, denying petitioner's subsequent motion for reconsideration.
THE UNDISPUTED FACTS
Petitioner Swim Phils., Inc. (Swim) filed the complaint below for damages against respondent CORS Retail Concept, Inc. (CORS), its managing director Norman P. Lozendo, and employee "John Doe." In its Complaint dated October 27, 2014, Swim essentially alleged:
On September 30, 2013, at Trinoma Mall, Quezon City, CORS' employee "John Doe" accidentally broke the sprinkler inside their store causing damage and wettage to nearby stores. One of them was "Nothing But H2O," which Swim owned and operated. It sold swimwear, footwear, and accessories. Swim sustained the following damages:
1. "TOMS" products amounting to PhP235,670.00;
2. "Lagu" products worth PhP19,980.00;
3. Replacement of damaged "Point of Sale (POS)" motherboard in the amount of PhP2,500.00;
4. Six boxes of continuous paper amounting to PhP3,000.00;
5. Manpower lost in inspecting and assessing the damage and clean up in the amount of PhP20,000.00;
6. Lost sales during the recovery and clean-up period in the amount of PhP40,000.00;
7. Attorney's fees worth PhP80,000.00;
8. Legal interest from the time of incident until full payment; and
9. Cost of suit and litigation expenses. 4
Although CORS had already acknowledged its responsibility for these damaged items, efforts to amicably settle the dispute failed. Swim was, therefore, constrained to file the complaint below. 5
In its Answer dated March 23, 2015, CORS denied Swim's factual allegations in the complaint, citing lack of knowledge or information sufficient to form a belief as to their truth or falsity. As counterclaim, it prayed for exemplary damages, moral damages, and attorney's fees. 6
Thereafter, Swim filed a Motion for Judgment on the Pleadings claiming that CORS' averment of lack of knowledge or information sufficient to form a belief as to the truth or falsity of Swim's allegations amounted to a general denial. In effect, CORS should be deemed to have impliedly admitted these factual allegations. 7
CORS opposed. It asserted that to be entitled to damages, Swim was still required to present evidence substantiating the same. 8
THE RULING OF THE REGIONAL TRIAL COURT
By Order dated November 13, 2015, the trial court granted the Motion for Judgment on the Pleadings. 9 The trial court pronounced that since CORS' Answer contained mere general denials, the same failed to tender a genuine issue, thus, judgment on the pleadings was proper pursuant to Section 1, Rule 34 of the 1997 Rules of Court.
Three days later, the trial court rendered its assailed Judgment dated November 16, 2015, dismissing the complaint for insufficiency of evidence. The trial court noted that the only document attached to the complaint was Swim's demand letter dated September 9, 2414. 10 Under Order dated April 18, 2016, Swim's motion for reconsideration was denied. 11
THE PRESENT PETITION
Swim now asks the Court to exercise its discretionary appellate jurisdiction via Rule 45 of the 1997 Rules of Court on a singular question of law: did the trial court err when it dismissed the complaint for insufficiency of evidence, albeit it had earlier pronounced that CORS was deemed to have admitted all the factual allegations in the complaint? 12
In its Comment dated October 14, 2016, CORS counters that when Swim moved for judgment on the pleadings, it effectively submitted for decision the case solely on the basis of the allegations in the complaint and the single documentary evidence, i.e., the demand letter sent by Swim. 13
On March 6, 2017, Swim filed its reply essentially reiterating its arguments in the petition. 14
ISSUE
Is judgment based on the pleadings proper in an action for damages where the defendant made a general denial of the factual allegations in the complaint due to lack of knowledge or information sufficient to form a belief as to their truth or falsity?
RULING
Manufacturer's Bank & Trust Co. vs. Diversified Industries, Inc. aptly holds that denials consisting of an avowed lack of knowledge of facts which could not but be clearly known to the defendants or ought to be or could quite easily have been known by them are sham denials. Thus, the disclaimer by a debtor of the amount of their outstanding balance is implausible, but even if true cannot be deemed a proper denial because it concerns something they could have easily learned or verified had they wished to. 15
On this score, Section 11, Rule 8 of the 1997 Revised Rules of Court is apropos:
Section 11. Allegations not specifically denied deemed admitted. — Material averment in the complaint, other than those as to the amount of unliquidated damages, shall be deemed admitted when not specifically denied. x x x
Here, CORS was deemed to have admitted that Swim's sport apparels sold in its "Nothing But H2O" shop got drenched due to the fault of CORS' employee. But as to the extent of value of the actual damages sustained by Swim, the same are deemed specifically denied. Raagas vs. Traya teaches:
Even if the allegations regarding the amount of damages in the complaint are not specifically denied in the answer, such damages are not deemed admitted. x x x Actual damages must be proved, and that a court cannot rely on "speculation, conjecture or guesswork" as to the fact and amount of damages, but must depend on actual proof that damages had been suffered and on evidence of the actual amount. x x x 16
Applying Section 11 and Raagas in the present case, Swim is required to adduce evidence precisely to establish the exact extent or pecuniary value of the actual damages it claims to have suffered by reason of CORS' employee's act of accidentally breaking the sprinklers inside CORS' store. This is the essence of Section 11 "(m)aterial averment in the complaint, other than those as to the amount of unliquidated damages, shall be deemed admitted when not specifically denied. x x x." (Emphasis supplied)
In fine, the trial court gravely erred when it granted Swim's motion for judgment on the pleadings despite the existence of one crucial factual issue: how much is the value of the actual damages sustained by Swim?
So must it be.
For this purpose, there is a need to remand the case for reception of the evidence below. The fact that it was CORS' employee who directly caused damage to Swim's merchandise remains unrefuted. Too, the fact that Swim had already paid the corresponding docket fees based on the value of actual damages and attorney's fees alleged in the complaint is a matter of record.
In the higher interest of substantive justice, though, the Court finds it proper to remand the case for reception of evidence to determine the actual extent or value of the damages suffered by Swim.
Accordingly, the Judgment dated November 16, 2015 and Order dated April 18, 2016 are PARTIALLYREVERSED and SET ASIDE. Civil Case No. 14-0107 is remanded to the Regional Trial Court-Branch 201, Las Piñas City for reception of evidence on the amount of or extent of the damages suffered by Swim Phils., Inc. caused by an employee of CORS. Thereafter, the trial court shall resolve the case on the merits.
Very truly yours,
(SGD.) MARIA LOURDES C. PERFECTODivision Clerk of Court
By:
TERESITA AQUINO TUAZONDeputy Division Clerk of Court
Footnotes
1. Under Rule 45 of the 1997 Rules of Court.
2.Rollo, pp. 8-12.
3.Id. at 13.
4.Id. at 42.
5.Id. at 42-43.
6.Id. at 50-52.
7.Id. at 54-62.
8.Id. at 64-65.
9.Id. at 73-75.
10.Id. at 8-12.
11.Id. at 13.
12.Id. at 16-32.
13.Id. at 102-107.
14.Id. at 102-105.
15. 255 Phil. 353, 360 (1989).
16. 130 Phil. 846 (1968).