FOURTH DIVISION
[CA-G.R. CV No. 54234. August 14, 1998.]
VICENTE DITCHING, JR., for himself and as ASSIGNEE of his co-heirs, viz: Ester, Editha, Juan, Corazon, Josefa, Otelia, Rosita, Jose Ramon, Marciano, Samson, Cielo, Herminio and Marino, all surnamed Ditching, plaintiff-appellee, vs. ODISCO FARMS SYSTEM COOPERATIVE FOUNDATION, rep. by LEYTE SALVACION B. MONTEROSO, accompanied by her husband GLENN MONTEROSO and LINO CORNELIO CECILIO BASCUG, defendants-appellants.
D E C I S I O N
GONZAGA-REYES, J p:
This is an action for sum of money to recover the amount of P180,000.00 representing accumulated lease rentals.
On July 28, 1979, defendant Leyte Salvacion Monteroso entered into a lease contract with her grandfather, the late Vicente Ditching, Sr. covering Lot 97 of the cadastral survey of Victorias Negros Occidental, with an area of 181,094 sq.m. The lease contract provides inter alia:
"a) That the term of this lease shall be ten (10) crop years beginning crop year 1978-79 up and including crop year 1988-89.
b) That the LESSEE shall pay a rental of 10% (Ten Percent) of the production in said property every crop year; the same to be segregated as soon as the sugarcane of the LESSEE produced therein is milled with the Victorias Milling Company, Inc. and for this purpose the said VMC is authorized to segregate and issue sugar quedans pertaining to the rentals thereof in the name of the LESSOR, Atty. Vicente Ditching.
c) That this lease shall pertain only to all available lands for sugarcane plantation including lands now planted with sugarcane, for the lease in this lot." (at pp. 64-65, Record)
The instant complaint, which was filed by Vicente Ditching, Jr., for himself and as Assignee of his co-heirs, against ODISCO FARMS SYSTEM CO-OPERATIVE FOUNDATION, represented by Leyte Salvacion Monteroso and Lino Cornelio Cecilio Bascug, alleges:
"3. That during the existence of the lease the defendant Leyte Salvacion B. Monteroso, with the help of her brother and co-defendant Lino Cornelio Cecilio Bascug, without the knowledge and consent of the Lessor Atty. Vicente Ditching, Sr., took possession of an area of around two (2) hectares of the land leased (Lot 97) not devoted for the planting of sugarcane, but devoted for lowland palay and cultivated and planted lowland palay under the 'Odisco Farms System Co-operative Foundation' of which institution said defendants are in charge, and on account of good harvest which is twice a year the annual production amounted to two (2) hundred cavans and the reasonable annual rental is P20,000.00, and from 1979 to 1988, when Lot 97 of cadastral survey was sold to Sugar Farms Industries, Inc., owned by Federico Sola, the accumulated rentals amounted to P180,000.00;" (at p. 2, Record)
Defendants filed a Motion to Dismiss on the grounds, among others, of lack of jurisdiction, because of an agrarian case pending in the DAR Adjudication Board in Quezon City, and bar by prior judgments in Civil Cases No. 1253 and 1371. The motion to Dismiss was denied.
In their Answer, defendants raised the following affirmative defenses:
"3. That after the execution of the contract stated in paragraph 2 of the complaint, some persons who worked on the leased property took possession of some portions of the land and they were later identified by the DAR under the land reform program of the government;
4. That the alleged harvests on the portions planted to palay were enjoyed by the said farmer-beneficiaries of the land reform program and the herein defendant Leyte Salvacion B. Monteroso was only given a few shares of their produce as lease rentals;
5. That the allegation that defendant Leyte Salvacion Monteroso is in charge of the ODISCO FARM SYSTEM COOPERATIVE FOUNDATION is without any factual basis because the said foundation is composed of a set of officers, board of directors, and members which include the aforesaid beneficiaries of the agrarian reform program;
6. That if ever there is a refusal on the part of the Sugarfarm Industries, Inc. to pay the balance of the purchase price and on the part of the farmers to vacate some portions of the land in question, the entire blame should lie with the lessor and Federico Sola, owner of the Sugarfarm, who, without respecting the right and interest of the farmers entered into a contract of sale and confederated in using force, threats, and intimidation against the farmers. Thus, forced to fend for themselves, the said farmers instituted a case for maintenance against the lessor and Sola with the DAR, which rendered a decision in favor of the farmers and against Sola and the herein lessor. Machine copy of the DAR decision is attached hereto and marked as Annex '1';" (at pp. 27-28, Record)
and reiterated the above-mentioned two grounds in their Motion to Dismiss. Defendants counterclaimed for damages for the alleged "malicious filing" of the complaint.
The parties filed their respective Pre-trial Briefs.
Plaintiffs claimed in their pre-trial brief that defendants, without the consent of the owner and in violation of the lease contract, tool possession of two hectares and installed their laborers as tenants in said two hectares, and that these tenants filed DARAB Case No. 184 against the plaintiff to resist plaintiff's request to vacate the land.
In their pre-trial brief, defendants raised the following issues: (1) whether plaintiffs have a cause of action considering their admission that the property has been sold to Federico Sola; (2) whether the present action could survive the death of the owner-lessor and (3) whether Civil Cases Nos. 1253 and 1371 and DARAB Case No. 184 will be a bar to the prosecution of the instant case.
The Order of the court a quo dated December 11, 1995 states that during the pre-trial conference held on December 20, 1994, the parties, through their respective counsel, "agreed to submit the case for judgment on the pleadings by submitting their respective memorandum" in a non-extendible period of thirty (30) days.
On January 12, 1995, the plaintiffs filed their "Memorandum for the Plaintiffs for Judgment on the Pleadings" to support their claim for unpaid lease rentals in the amount of P180,000.00, together with their documentary evidence. No Memorandum appears to have been filed for the defendants (pp. 59-82, Record).
On April 4, 1995, the court rendered its decision "based on the agreement to have judgment on the pleadings", the dispositive portion of which reads:
"IN THE LIGHT OF ALL THE FOREGOING, the Court finds the decision in favor of the plaintiffs and hereby orders —
(a) the defendants to pay the plaintiffs the sum of ONE HUNDRED FIFTY THOUSAND PESOS (P150,000.00) representing the unpaid accumulated back rentals for a period of six (6) years;
(b) the award of attorney's fees in the amount of TWENTY THOUSAND PESOS (P20,000.00) to be paid by the defendants;
(c) defendants to pay the costs of this suit; and
(d) the dismissal of the counterclaim." (at pp. 86-87, Record)
Motion for reconsideration of said decision having been denied, the defendants have appealed to this court on the following assignment of errors:
I. THE TRIAL JUDGE VIOLATED THE DEFENDANTS' CONSTITUTIONAL RIGHT TO DUE PROCESS BY RENDERING A JUDGMENT ON THE PLEADINGS ALTHOUGH THE ANSWER TENDERED AN ISSUE AND ALLEGED NEW MATTERS THAT ARE CONTROVERTED, AND MADE THEM LIABLE FOR UNLIQUIDATED DAMAGES THAT WERE NOT PROVEN.
II. THE TRIAL COURT ERRED IN DISMISSING DEFENDANTS' MOTION TO DISMISS ON THE GROUND THAT THE CASE AT BAR IS BARRED BY PREVIOUS COURT DISMISSALS.
III. THE TRIAL COURT ERRED IN DISMISSING THE COUNTERCLAIM." (at pp. 68-69, rollo)
The first assignment of error has merit.
Judgment on the pleadings is governed by Rule 19, Section 1 which reads:
"SECTION 1. Judgment on the pleadings. — Where an answer fails to tender an issue, or otherwise admits the materials allegations of the adverse party's pleading, the court may, on motion of that party, direct judgment on such pleading. But in actions for annulment of marriage or for legal separation the material facts alleged in the complaint shall always be proved."
Judgment on the pleadings is justified where the answer fails to tender an issue (Lorenzo vs. Estenzo, 73 SCRA 630). If the answer tenders an issue on the litigated matters as judgment on the pleadings is not proper (Stronghold Insurance Co. vs. C.A., 203 SCRA 763; Santiago vs. Conde, 105 Phil. 298).
A perusal of the complaint and the answer readily reveals that the defendants have made a sufficient controversion of the material allegations in the complaint, and specifically tendered several issues with respect to plaintiffs' entitlement to their claim for lease rentals, i.e. that the alleged harvests on the portions of the leased property were enjoyed by the farmer-beneficiaries of the Land Reform Program and defendant Monteroso was only given a few shares of the produce, and that the defendant Leyte Salvacion Monteroso is not in charge of Odisco Farm System Cooperative Foundation. In their Reply to Answer, plaintiff controverted the claim that defendants are not in actual possession of the two hectares devoted to palay and the claim of tenancy as well as the right of the defendants to install their laborers as tenants of Lot No. 97 (See also Pre-trial Brief for the Plaintiffs). The defendants raised new defenses in the Pre-Trial Brief, namely (1) whether plaintiffs have a cause of action despite the sale of the property to Federico Sola, and (2) whether the lease contract can survive the death of the lessor Vicente Ditching Sr.
No pre-trial order was issued by the court a quo that could have identified the facts stipulated upon and the issues yet to be tried.
However, what is clear is that the pleadings tendered genuine factual issues, as the Answer traversed the claim of plaintiffs to collect the accumulated unpaid rentals in the sum of P180,000.00 as prayed for in the complaint, which was based on a bi-annual production of 200 cavans and a "reasonable annual rental" of P20,000.00 from 1979 to 1988. This is indicated in the affirmative defenses (1) that the alleged harvests were enjoyed by certain farmer beneficiaries who worked on the leased property and not fully by defendant Monteroso, and (2) the fact that defendants Monteroso and Bascug denied that they were in charge of Odisco Farm System Cooperative Foundation though which entity defendants were alleged to have planted and harvested palay for their own use.
The judgment on the pleadings was not proper because the material allegations of the complaint to support the claim for unpaid rentals against the defendants were sufficiently controverted. Although the lease contract itself is not disputed, the lease rentals stipulated were based on a percentage (10%) of the production in every crop year, and is by no means a liquidated amount, and requires the presentation of evidence in the absence of an admission either express or implied from failure to make a specific denial (Ondap vs. Abrigaa, 88 SCRA 610). The trial court itself admitted that there is no sufficient proof to determine the annual palay production from the premises of about two hectares, and thus "equitably and reasonably" reduced the back annual rentals from P180,000.00, the amount prayed for, to P150,000.00. The judgment on the pleadings precluded the presentation of evidence as to the factual basis for computation of rentals based on actual yearly production, despite the affirmative defense raised by defendants that they were given only a small share of the produce. In fact the said judgment precluded a trial on the other issues squarely raised by the parties, e.g. whether defendants violated the lease contract by planting palay and not sugarcane, whether defendants installed their laborers as tenants of Lot No. 97 without the consent of the owner, and whether Odisco Farm System Cooperative Foundation is the principal participant in the violation of the lease contract and was therefore correctly impleaded as party-defendant.
It is believed that under the circumstances of the case, judgment on the pleadings was not called for and prevented a fair and full resolution of controversy. The trial court stated that both parties agreed to have judgment on the pleadings, the minutes of the session held on December 20, 1994 merely stated that "both parties will submit their respective memoranda for judgment on the pleadings" (p. 57, Record). Only the plaintiffs submitted Memorandum praying for judgment on the pleadings; the defendants did not submit their memorandum for judgment on the pleadings. In fact, in their Motion for Reconsideration of the Judgment on the pleadings, the defendants pointed out that the parties presented "widely opposing contentions" in their respective pre-trial brief, and the court cannot rely on "conjectures" on the "wild" monetary claims of plaintiffs. In view of the objections expressed by the defendants to the issues raised, there was no clear agreement to submit the case to a judgment or the pleadings, much less an implied admission of each other's factual allegations, which the defendants-appellants correctly describe as "widely opposing", that would support a submission by the parties to a judgment on the pleadings.
The second assignment of error has to merit. The instant case is not barred by the dismissal of Civil Cases Nos. 1253 and 1371.
Civil Case No. 1253 was for rescission of the lease contract entered into by Vicente Ditching Sr. and Leyte Salvacion Monteroso. The cause of action for rescission was based on the abandonment by the defendant of the land leased and the failure to plant sugarcane, which allegedly deprived the plaintiff of annual rental of P50,000.00. The complaint prayed for rescission of the contract of lease and for defendant to render an accounting of unpaid rentals. The case was dismissed on motion of the plaintiff, to which defendant interposed no objection, for the reason that plaintiff decided to wait for the expiration of the lease contract which was due to expire in two years.
Civil Case No. 1371 wad for payment of rentals and damages based on the defendant's failure to plant sugarcane on the land and to pay unpaid rentals amounting to P180,000.00. Plaintiff also asked for moral damages for the "complete disregard of parental affection by defendant". The case was dismissed without prejudice in view of the manifestation of plaintiffs' counsel that plaintiff died already.
The instant case is for collection of lease rentals filed by the heirs of the original lessor against the Odisco Farms System Cooperative Foundation, Inc., represented by Leyte Salvacion Monteroso and her brother Lino Cornelio Bascug.
The Orders of dismissal in Civil Case No. 1253 and Civil Case No. 1371 merely confirmed the dismissal on motion filed by the plaintiffs. There was no adjudication on the merits, that is one rendered after a consideration of the evidence or stipulations of the parties, that would give rise to res judicata under Rule 16, par. (f) (See Ybañez vs. CA, 253 SCRA 540). Neither is the twin dismissal rule, which is invoked for the first time on appeal, in point. Under this rule, which is found in Section 1, Rule 17, dismissal is without prejudice (I Regalado, Remedial Law Compendium, p. 167) and the court order expressly stated that the dismissal is without prejudice.
Moreover, it is too late now for appellants to question the Order of dismissal in Civil Case No. 1371 for being null and void because the fact that the plaintiff has died is a reason for substitution of parties and not dismissal. The said order has long become final. The order is "without prejudice" and this is also final.
The third assigned error has merit. The counterclaim contained in defendant's answer was for damages based on the alleged malicious filing of the instant complaint. In his Reply to Answer, plaintiff specifically denied paragraphs 9 and 10 as regards the said counterclaim for the reason that "the alleged damages are the result of defendants' undoing". The reply thus tendered an issue of fact and the judgment on the pleadings precluded the reception of evidence on this factual issue.
ACCORDINGLY, the judgment appealed from is SET ASIDE and the case is REMANDED to the court a quo for further proceedings.
SO ORDERED.
Hofileña and Amin, JJ., concur.