Raising an issue

Summary judgment is a procedural device to avoid long drawn out litigations and useless delays. It is resorted to when the pleadings of the parties show that there are no genuine issues of fact to be tried; when the facts are not in dispute. In such a case, the trial court is allowed to decide without going to trial by applying the law to the material facts. When is there no genuine issue? This is answered in this case between two big commercial banks.

On July 5, 1985, FEBTC purchased from the Central Bank (CB), through bidding, the assets and the franchise of the various offices of another bank under liquidation (PBC) and assume some of its liabilities. The transaction was contained in a Purchase Agreement and a Memorandum Agreement.

Among the liabilities of PBC were eight receivables by a leasing corporation representing unpaid rentals for the computer machines and their accessories totaling P24,158,263.10 and proceeds of collection items deposited in various branches of PBC amounting to P127,834.73.These receivables were assigned by the leasing company to its principal, the CBTC or Solid bank. The latter in turn filed its claims with the Central Bank liquidator in the Special Receivership Proceedings of PBC.

When Solid discovered the existence of the Purchase Agreement and the MOA signed by FEBTC, it filed with the trial court a motion to implead FEBTC asking the court to order FEBTC to pay jointly and severally with the PBC through its CB liquidator the receivables it is claiming. Solid alleged that said receivables were part of the liabilities of PBC assumed by FEBTC under the Purchase Agreement and MOA. Subsequently, Solid filed a motion for summary judgment in connection with the claims aforementioned. Solid contended that it is entitled to summary judgment as a matter of law since there is no genuine issue as to any material fact regarding said claims attaching thereto the affidavit of merit of its comptroller. FEBTC on the other hand contended that the issues before the liquidation court are not purely legal but factual, i.e., whether the subject receivables as well as deposit liabilities are included in the purchase agreement and the MOA as among those assumed by it.

The liquidation court ruled in favor of Solid. It granted the motion for summary judgment and ordered FEBTC to pay jointly and severally with PBC through the CB liquidator, the claims of Solid less the amount of P1,206,495.17 already paid to the latter in the course of the proceedings.

Was the lower court correct?

No.

Rule 34, Section 3 of the Rules of Court provides two requisites for summary judgment to be proper:(1) there must be no genuine issue as to any material facts except for the amount of the claim; and (2) the party presenting the motion must be entitled to a judgment as a matter of law. Genuine issue is such issue of fact which require the presentation of evidence as distinguished from a sham, fictitious contrived or false claim.

In this case, it cannot be said that the foregoing requisites are present. There is a genuine issue of facts, the resolution of which requires the presentation of evidence, i.e., whether or not Solid’s claim is included in the purchase agreement as among the properties and liabilities or items purchased and assumed by FEBTC from PBC/CB.

Rule 34 does not vest in the trial court jurisdiction to summarily try the issues on depositions and affidavits when the requisites abovementioned are not present. Upon a motion for summary judgment, the sole function of the court is to determine whether or not there is an issue of fact. Any doubt as to the existence of the issue of fact must be resolved against the movant. The movant has the burden of demonstrating clearly the absence of any genuine issue of fact, or that the issue posed in the complaint is patently unsubstantial so as not to constitute a genuine issue for trial. Solid failed to discharge this burden. The pleadings of the parties would show that a trial is necessary to ascertain which of the conflicting allegations are true (Solidbank Corp. vs. Court of Appeals et. al. G.R. 120010, October 3, 2002).

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