One. An answer to the complaint may raise a negative defense which consists in defendant’s specific denial of the material fact that plaintiff alleges in his complaint, which fact is essential to the latter’s cause of action.[11] Specific denial has three modes. Thus:
1) The defendant must specify each material allegation of fact the truth of which he does not admit and whenever practicable set forth the substance of the matters on which he will rely to support his denial;
2) When the defendant wants to deny only a part or a qualification of an averment in the complaint, he must specify so much of the averment as is true and material and deny the remainder; and
3) When the defendant is without knowledge and information sufficient to form a belief as to the truth of a material averment made in the complaint, he shall so state and this shall have the effect of a denial.
But the rule that applies when the defendant wants to contest the documents attached to the claimant’s complaint which are essential to his cause of action is found in Section 8, Rule 8 of the Rules of Court, which provides:
SECTION 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.
To determine whether or not respondent Mrs. Capistrano effectively denied the genuineness and due execution of ECI’s actionable documents as provided above, the pertinent averments of the complaint and defendant Capistrano’s answer are here reproduced.
ECI’s complaint:
3. That sometime in 1997, defendant applied for membership, as widow of a deceased member of the
4. That in connection with her application for membership in the Manila Yacht Club, defendant applied for and was granted a Manila Yacht Club Visa Card in accordance with Credit Card Sponsorship Agreement entered into between the plaintiff and the Manila Yacht Club wherein Manila Yacht Club shall solicit applications for the Manila Yacht Club Visa Cards from Manila Yacht Club members and dependents. Copy of the
Mrs. Capistrano’s answer:
3. She specifically denies paragraph[s] 3 and 4 of the complaint for want of sufficient knowledge to form a belief as to the veracity of the allegations contained therein and for the reasons stated in her special and affirmative defenses.
x x x x
ECI’s complaint:
5. That defendant authorized her daughter, Mrs. Valentina Redulla to get the said credit card including her ATM application form from the plaintiff which enabled the defendant to avail of the cash advance facility with the use of said card; Copy of the authorization letter, application form and acknowledgment receipt showing that Valentina C. Redulla received the said credit card are hereto attached as Annexes “B”, “C”, and “D”, respectively;
Mrs. Capistrano’s answer:
4. She specifically denies paragraph 5 of the complaint for want of sufficient knowledge to form a belief as to the allegations contained therein. She never authorized any person to get her card. Valentina Redulla is not her daughter.
x x x x
ECI’s complaint:
6. That with the use of the said Manila Yacht Club Visa Card, defendant could purchase goods and services from local and accredited stores and establishments on credit and could make cash advances from ATM machines since it is the plaintiff who pays first the said obligations and later at a stated period every month, the plaintiff will send a statement of account to defendant showing how much she owes the plaintiff for the payments it previously made on her behalf. Copy of the monthly statement of accounts for the months of November and December 1997 are hereto attached as Annexes “E” and “F”, respectively;
Mrs. Capistrano’s answer:
5. She specifically denies paragraph 6 of the complaint for want of sufficient knowledge to form a belief as to the veracity of the allegations contained therein and for the reasons as stated in her special and affirmative defenses.
x x x x
ECI’s complaint:
7. That it is the agreement of the parties that in the event that an account is overdue, interest at 1.75% per month and service charge at 1.25% will be charged to the defendant;
Mrs. Capistrano’s answer:
6. She specifically denies paragraph 7 of the complaint for want of sufficient knowledge to form a belief as to the veracity of the allegations contained therein.
x x x x
ECI’s complaint:
8. That on November 24, 1997, defendant’s daughter, Mrs. Valentina C. Redulla issued Solidbank Check No. 0127617 dated November 24, 1997 in the amount ofP45,000.00 in partial payment of defendant’s account with the plaintiff;
9. That when the said check was deposited in the bank, the same was dishonored for the reason “Account Closed.” Copy of said said check is hereto attached as Annex “G”;
Mrs. Capistrano’s answer:
7. She denies paragraph[s] 8 and 9 for want of sufficient knowledge to form a belief as to the veracity of the allegations contained therein and for the reasons aforestated. It is quite peculiar that herein defendant’s alleged account would be paid with a personal check of somebody not related to her.
x x x x
ECI’s complaint:
10. That defendant has an unpaid principal obligation to the plaintiff in the amount of P217,235.326;
Mrs. Capistrano’s answer:
8. She denies paragraph 10 for want of sufficient knowledge as to the veracity of the allegations contained therein and for the reasons stated in her special and affirmative defenses. Granting ex gratia argumenti that defendant did indeed apply for a card, still, she vehemently denies using the same to purchase goods from any establishment on credit.
x x x x
ECI’s complaint
11. That plaintiff made demands on the defendant to pay her obligation but despite said demands, defendant has failed and refused to pay her obligation and still fails and refuses to pay her obligation to the plaintiff and settle her obligation, thus, compelling the plaintiff to file the present action and hire the services of counsel for the amount of P53,998.84 and incur litigation expenses in the amount of P30,000.00;
12. That it is further provided as one of the terms and conditions in the issuance of the Manila Yacht Club Card that in the event that collection is enforced through court action, 25% of the amount due of P53,998.84 will be charged as attorney’s fees and P53,998.84 will be charged as liquidated damages;
Mrs. Capistrano’s answer
9. She denies paragraph[s] 11 and 12 for want of sufficient knowledge to form a belief as to the veracity of the allegations therein. If ever there was any demand sent to herein defendant the same would have been rejected on valid and lawful grounds. Therefore, any damage or expense, real or imaginary, incurred or sustained by the plaintiff should be for its sole and exclusive account.
x x x x
Further, Mrs. Capistrano’s special and affirmative defenses read as follows:
10. Defendant repleads by reference all the foregoing allegations which are relevant and material hereto.
11. Defendant denies having applied for membership with the Equitable Cardnetwork, Inc. as a widow of a deceased member of the Manila Yacht Club.
12. She has never authorized anyone to get her alleged card for the preceding reason. Therefore, being not a member, she has no obligation, monetary or otherwise to herein plaintiff.
13. Plaintiff has no cause of action against herein answering defendant.
14. This Valentina C. Redulla is not her daughter. In all modesty, defendant being a member of one of the prominent families of Cebu and being a board member of the Borromeo Brothers Estate whose holdings include Honda Cars Cebu as well as other prestigious establishments, it would be totally uncalled for if she would not honor a valid obligation towards any person or entity.
15. She surmises that this Valentina Redulla has been posing as Josefa Capistrano. Therefore, plaintiff’s cause of action should have been directed towards this Redulla.
16. Even granting for the sake of argument that herein answering defendant did indeed authorized somebody to pick up her card, still, she never made any purchases with the use thereof. She, therefore, vehemently denies having used the card to purchase any merchandise on credit.
In substance, ECI’s allegations, supported by the attached documents, are that Mrs. Capistrano applied through Mrs. Redulla for a credit card and that the former used it to purchase goods on credit yet Mrs. Capistrano refused to pay ECI for them. On the other hand, Mrs. Capistrano denied these allegations “for lack of knowledge” as to their truth.[12] This mode of denial is by itself obviously ineffectual since a person must surely know if he applied for a credit card or not, like a person must know if he is married or not. He must also know if he used the card and if he did not pay the card company for his purchases. A person’s denial for lack of knowledge of things that by their nature he ought to know is not an acceptable denial.
In any event, the CA ruled that, since ECI did not object on time to Mrs. Capistrano’s evidence that her signatures on the subject documents were forged, such omission cured her defective denial of their genuineness and due execution. The CA’s ruling on this point is quite incorrect.
True, issues not raised by the pleadings may be tried with the implied consent of the parties as when one of them fails to object to the evidence adduced by the other concerning such unimpleaded issues.[13] But the CA fails to reckon with the rule that a party’s admissions in the course of the proceedings, like an admission in the answer of the genuineness and true execution of the plaintiff’s actionable documents, can only be contradicted by showing that defendant made such admission through palpable mistake.[14] Here, Mrs. Capistrano never claimed palpable mistake in the answer she filed.
It is of no moment that plaintiff ECI failed to object to Mrs. Capistrano’s evidence at the trial that the subject documents were forgeries. As the Court ruled in Elayda v. Court of Appeals,[15] the trial court may reject evidence that a party adduces to contradict a judicial admission he made in his pleading since such admission is conclusive as to him. It does not matter that the other party failed to object to the contradictory evidence so adduced.
Notwithstanding the above, the Court holds that the CA correctly ordered the dismissal of ECI’s action since, contrary to the RTC’s finding, Mrs. Capistrano effectively denied the genuineness and due execution of ECI’s actionable documents. True, Mrs. Capistrano denied ECI’s actionable documents merely “for lack of knowledge” which denial, as pointed out above, is inadequate since by their nature she ought to know the truth of the allegations regarding those documents. But this inadequacy was cured by her quick assertion that she was also denying the allegations regarding those actionable documents “for the reasons as stated in her special and affirmative defenses.”
In the “Special and Affirmative Defenses” section of her answer, Mrs. Capistrano in fact denied ECI’s documented allegations that she applied for a credit card, was given one, and used it. She said:
11. Defendant denies having applied for membership with the Equitable Cardnetwork, Inc. as a widow of a deceased member of the Manila Yacht Club.
12. She has never authorized anyone to get her alleged card for the preceding reason. Therefore, being not a member, she has no obligation, monetary or otherwise to herein plaintiff.
Neither the RTC nor the CA can ignore Mrs. Capistrano’s above additional reasons denying ECI’s allegations regarding its actionable documents. Such reasons form part of her answer. Parenthetically, it seems that, when Mrs. Capistrano denied the transactions with ECI “for lack of knowledge,” it was her way of saying that such transactions took place without her knowing. And, since Mrs. Capistrano in fact verified her claim that she had no part in those transactions, she in effect denied under oath the genuineness and due execution of the documents supporting them. For this reason, she is not barred from introducing evidence that those documents were forged.
