G.R. No. 171873 Case Digest

G.R. No. 171873, July 9, 2010

Municipality of Tiwi

vs Antonio Betito

Ponente: Del Castillo

Facts:

On June 4, 1990, this court issued a decision finding National Power Corporation liable for unpaid real estate taxes on its properties in Albay. This properties consisted geothermal plants in Tiwi and in Daraga. Previously, these properties were sold in an auction, of which the Province of Albay acquired ownership.

Later, NPC and Albay entered into a MOA where Albay agreed to settle its tax liabilities and NPC will make an initial payment upon signing of the agreement, and the rest will be paid in a monthly instalment.

Then on August 3, 1992, then mayor Corral of Tiwi requested Governor Salalima to remit the rightful taxes shares of Tiwi. Salalima replied that the request cannot be granted as the initial payment was only an earnest money and that the total amount to be collected was still being validated.

RTC: The trial court held that petitioners’ answer to the complaint failed to tender an issue, thus, partial judgment on the pleadings is proper.  It noted that petitioners did not specifically deny under oath the actionable documents in this case, particularly, the Contract of Legal Services and Resolution No. 15-92.  Consequently, the genuineness and due execution of these documents are deemed admitted pursuant to Section 8, Rule 8 of the Rules of Court.  Thus, the authority of Mayor Corral to enter into the subject contract was deemed established.

CA: The appellate court agreed with the trial court that the genuineness and due execution of the Contract of Legal Services and Resolution No. 15-92 was impliedly admitted by petitioners because of their failure to make a verified specific denial thereof.  Further, the answer filed by the petitioners admitted the material averments of the complaint concerning Tiwi’s liability under the subject contract and its receipt from the NPC of a total of P146,579,661.84 as realty taxes.   Petitioners  cannot claim that the subject contract  required ratification because this is not a requisite for the enforceability of a contract against a local government unit under the express terms of the contract and the provisions of the Local Government Code (LGC). Also, petitioners are estopped from questioning the enforceability of the contract after having collected and enjoyed the benefits derived therefrom.

Issues: (1) The amount of award of attorney’s fees to respondent is unreasonable, unconscionable and without any proof of the extent, nature and “result of his legal service” as required by the purported “contract of legal services” and pursuant to Section 24, Rule 138 of the Rules of Court.(2) The application of the rule of judgment on the pleadings and/or summary judgment is baseless, improper and unwarranted in the case at bar.(3) The purported “contract of legal services” exceeded the authority of the late Mayor Corral and should have been ratified by the Sangguniang Bayan of Tiwi in order to be enforceable.

Held:

The petition is meritorious. Judgment on the pleadings is improper when the answer to the complaint tenders several issues. A motion for judgment on the pleadings admits the truth of all the material and relevant allegations of the opposing party and the judgment must rest on those allegations taken together with such other allegations as are admitted in the pleadings .

In the instant case, a review of the records reveal that respondent (as plaintiff) and petitioners (as defendants) set-up multiple levels of claims and defenses, respectively, with some failing to tender an issue while others requiring the presentation of evidence for resolution.  The generalized conclusion of both the trial and appellate courts that petitioners’ answer admits all the material averments of the complaint is, thus, without basis.  For this reason, a remand of this case is unavoidable. However, in the interest of justice and in order to expedite the disposition of this case which was filed with the trial court way back in 1999, we shall settle the issues that can be resolved based on the pleadings and remand only those issues that require a trial on merits as hereunder discussed.

The foregoing considerations cannot be brushed aside for it would be iniquitous for Tiwi to compensate respondent for legal services which he did not render; or which has no reasonable connection to the recovery of Tiwi’s share in the subject realty taxes; or whose weight or value has not been properly appraised in view of respondent’s admission in his Complaint that the opinion issued by then Chief Presidential Legal Counsel Antonio T. Carpio (in which respondent had no clear participation) was instrumental to the recovery of the subject realty taxes.