G.R. No. 150731 - CASENT REALTY DEVELOPMENT CORP., VS. PHILBANKING CORPORATION.D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE , premises considered[,] finding defendant's Motion For Judgment On Demurrer To The Evidence to be meritorious[,] the same is hereby GRANTED . Consequently, considering that the obligation of the defendant to the plaintiff having been extinguish[ed] by a Dacion en Pago duly executed by said parties, the instant complaint is hereby DISMISSED , with prejudice. Without Cost. [14] The Ruling of the Court of Appeals On appeal, respondent alleged that the trial court gravely erred because the promissory notes were not covered by the Dacion , and that respondent was able to prove its causes of action and right to relief by overwhelming preponderance of evidence. It explained that at the time of execution of the Dacion , the subject of the promissory notes was the indebtedness of petitioner to Rare Realty and not to the "Bank"­­--the party to the Dacion . It was only in 1989 after Rare Realty defaulted in its obligation to respondent when the latter enforced the security provided under the Deed of Assignment by trying to collect from petitioner, because it was only then that petitioner became directly liable to respondent. It was also for this reason that the April 3, 1989 Confirmation Statement stated that petitioner had no obligations to repondent as of December 31, 1988. On the other hand, petitioner claimed that the Deed of Assignment provided that Rare Realty lost its rights, title, and interest to directly proceed against petitioner on the promissory notes since these were transferred to respondent. Petitioner reiterated that the Dacion covered all conceivable amounts including the promissory notes. [15] The appellate court ruled that under the Rules of Civil Procedure, the only issue to be resolved in a demurrer is whether the plaintiff has shown any right to relief under the facts presented and the law. Thus, it held that the trial court erred when it considered the Answer which alleged the Dacion , and that its genuineness and due execution were not at issue. It added that the court a quo should have resolved whether the two promissory notes were covered by the Dacion , and that since petitioner's demurrer was granted, it had already lost its right to present its evidence. [16] The CA found that under the Deed of Assignment, respondent clearly had the right to proceed against the promissory notes assigned by Rare Realty. Thus, the CA ruled, as follows: WHEREFORE , premises considered, the Order dated May 12, 1999 of the Regional Trial Court, National Capital Judicial Region, Branch 145, Makati City is hereby REVERSED and SET ASIDE . Judgment is hereby entered ORDERING [petitioner] Casent Realty [Development] Corporation to: pay [respondent] Philbanking Corporation the amount of P300,000.00 with an interest of 36% per annum and a penalty of 12% for failure to pay the same on its maturity date, June 27, 1985 as stipulated in Promissory Note No. 84-04; pay [respondent] Philbanking Corporation the amount of P681,500.00 with an interest of