ELPIDIO TALASTAS, PLAINTIFF-APPELLEE, VS. CLEMENCO ABELLA, DEFENDANT-APPELLANT.

From a summary judgment of the Court of First Instance of Manila,
the defendant appealed to the Court of Appeals which, subsequently, certified
the case to Us, pursuant to Sections 17 and 31 of Republic Act No. 296, as
amended,^[1]
only questions of law being raised in the appeal.

In his complaint, herein plaintiff, Elpidio
Talastas, seeks the liquidation of a partnership he
claims to have with defendant Clemenco Abella, as well as to recover several sums of money.  In said pleading, plaintiff alleges that,
sometime in September 1955, defendant and he entered into an oral contract of
partnership for the operation of a dance-hall or cabaret, known as the Sambat Recreation Center – hereinafter known as the Center
– in Samal, Bataan; that,
pursuant to said contract, plaintiff contributed one-third (or P1,546.54) and
defendant two-thirds (or P3,093.08) of the partner­ship capital, aggregating
P4,639.62, with the understanding that the profits would be divided among them
in the same proportion; that, as managing partner, defendant was bound to
render an accounting and deliver plaintiff’s share in the profits, at the end
of each month; that, after rendering accounts for four (4) months, or beginning
from February 1956, defendant failed and refused to make said accounting or
give plaintiff’s share in the profits; that a corner space in the building
housing the Center was leased to a refreshment concessionaire, at P6.00 a
night, from September to December 1955; that defendant caused said
concessionaire to be ejected from said nook and then operated therein his own
refreshment business, since January, 1956; that, in September 1955, the
partnership hired taxi-dancers and lent them, by way of advances, the total sum
of P327.00, one-third of which had been contributed by the plaintiff; that the
taxi-dancers had already refunded said sum of P327.00 to the defendant; and
that the latter had failed and refused to deliver plaintiff’s share therein, in
the aforementioned earnings for the lease of part of the Center and in the
proceeds of its operation, as well as to render an accounting thereof.

Plaintiff prayed, therefore, that said partnership be dissolved
and liquidated; that the defendant be ordered to render ac­counts and to
deliver to the plaintiff his share in the proceeds of the operation of the
Center, in the monthly rentals received or due for the lease of the corner
space above referred to and in the above-mentioned advances made to
taxi-dancers, as well as to pay moral damages, attorney’s fees and the costs.

Upon being summoned, the defendant filed an answer deny­ing
“the allegations contained” in plaintiff’s complaint, alleging that
there had been no oral contract of partnership between them and setting up a
counterclaim for attorney’s fees and moral damages.

Soon thereafter, plaintiff filed a “motion for summary judg­ment,”
upon the ground that “no genuine issue of fact” had been raised in
defendant’s answer”, for:  (1) the
same is in the nature of a general denial, and, thus, amounts to an admission
of the ma­terial averments contained in the complaint; (2) defendant’s alle­gation
to the effect that there had been no oral contract of partner­ship between the
parties is manifestly false, as shown in the affidavits of the plaintiff, and
Angel Bugay, Luningning Bugay, Marciano Medi­na, Vicente Tinao and Juan Castillo, annexed to the motion; and (3)
plaintiff is in possession of indubitable documents establishing the existence
of said partnership, which documents are too voluminous to be attached to the
motion, but would be presented at the hearing thereof.

In their respective sworn statements, affiants said, substantially
the following:

1.  Plaintiff Elpidio Talastas. –
Sometime in 1955, defendant and he entered into a partnership agreement whereby
he constructed, at his expense, the first floor – including the eaves and an
“extension” of said floor – of a building of the defendant, in Samal, Bataan,
which had, theretofore, been used as dance-hall or cabaret.  As the materials and labor in said
construction – which was supervised by the plaintiff, who, at first, was
assisted by Luningning Bugay
in his task – had cost him the aggregate sum of P1,546.54, and defendant
claimed to have spent P3,093.08 for the second floor of the building, it was
agreed that their shares in the partnership would be one-third (1/3) for the
plaintiff and two-thirds (2/3) for the defendant.  After rendering accounts for four (4) months,
defendant failed and refused to do so or to deliver plaintiff’s share in the
profits, since February 1956.  Besides,
in July 1958, plaintiff learned that his interest in the business had been sold
by the defendant, for P1,600.00, to Juan Castillo.  Confronted, soon thereafter, by the
plaintiff, with this information, in the pre­sence of Castillo, defendant
offered to buy plaintiff’s share and pay therefor
P67.00 a month, but plaintiff rejected the offer.  Again, upon its establishment, the
partnership had lent to the taxi-dancers hired for its business, the aggregate
sum of P327.00, which was subsequently paid to the defendant.  Yet, the latter failed to deliver to the
plaintiff his share of said loan, or the sum of P109.00.  Last­ly, since January 1956, defendant had
occupied as lessee a nook of the Center – which used to be let to a
concessionaire, at a rental of P6.00 a night – in which he operated a
refreshment store, but, des­pite repeated demands, defendant had failed and
refused to give plaintiff’s share in the corresponding rental.

2.  Angel Bugay. – He was the master carpenter, engaged by
plaintiff herein in the aforementioned construction, which plain­tiff
supervised, apart from paying for his services and for the lumber used, all of
which were ordered in his name or on his ac­count.  Said construction was plaintiff’s capital as
partner in the operation of the Center.

3.  Luningning
Bugay. – Upon plaintiff’s request, she supervised
for a while, and advanced some funds for, the aforementioned construction.  The lumber used therein was secured in
plaintiff’s name.  According to the
defendant, said construction was plaintiff’s contribution to their partnership
for the operation of the Center.  Upon
the completion of the construction, plaintiff engaged her ser­vices as ticket
seller and his representative in the Center. 
Said tickets bore the names of the plaintiff and the defendant, as
owners of the business.  Upon closing
every night, defendant and she made an accounting, the records of which were
signed by either the defendant or one Rodolfo Buan.  She showed these records to the plaintiff,
whenever he came.

4.  Marciano
Medina. – He has a
lumber yard from which plaintiff got, for the construction above referred to,
lumber worth P1,100, of which P180 is still unpaid.  Defendant told him that said construction is
plaintiff’s share in their business. 
Sometime in June or July 1958, he learned from the defendant that he had
sold plaintiff’s share to Juan Castillo.

5.  Vicente Tinao. – From 1955 to 1957, he had worked in the Center
as ticket seller and as helper of Rodolfo Buan.  The tickets sold there bore the names of the
plaintiff and the defendant, as owners of the Center, and, whenever plaintiff
came, on Saturdays and Sundays, he inspected its books of accounts or records.

6.  Juan Castillo. –
In June 1958, defendant offered to sell him plaintiff’s share in the Center for
P1,600.00, which he delivered to the defendant to reimburse plaintiff’s
investment therein.  Thereupon, he acted
as cashier of the Center, but, presently, he found out that defendant had not
turned over said sum of P1,600.00 to the plaintiff.  So, the three (3) of them had a meeting in
the house of Arturo Bugay, in Samal,
Bataan, at which defendant admitted his failure to
deliver the aforementioned sum to the plaintiff and offered to pay it to him at
the rate of P67.00 a month.  Plaintiff
did not agree thereto, whereas he (Castillo) filed a criminal complaint for estafa against the defendant.

The latter opposed said motion, upon the ground that the
allegations in plaintiff’s complaint had been denied in his (defendant’s)
answer and that he affirmed therein that there is no partnership between
them.  This, notwithstanding, the lower
court, after due hear­ing, granted plaintiff’s motion and rendered a summary
judgment, the dispositive part of which reads:

“FOR THE FOREGOING CONSIDERATIONS the Court hereby renders a
summary judgment against the defendant and in favor of the plaintiff as
follows:

“1. P1,600.00 on the first cause of action, with 6% interest
thereon from the filing of the complaint until full payment;

“2. P240.00 on the second cause of action with the same rate
of interest from the filing of the complaint;

“3. P109.00 on the third cause of action, with the same rate
of interest from the date of the complaint;

“4. Ordering the defendant to render an ac­counting of the
proceeds of the business beginning February, 1956 up to and including
September, 1959, and every month thereafter until this issue of the case shall
be fully terminated; and

“5. Directing an accounting on the rentals of the space for
refreshment from January, 1956 up to September, 1959, and every month
thereafter until this issue shall be wholly resolved and that these two
accountings shall be submitted to this Court within thirty (30) days from
receipt of this decision, otherwise the defendant may be cited for contempt of
court; and

“6. Adjudging the defendant to pay plaintiff attorney’s fees
in the sum of P300.00, plus costs.”

A reconsideration of this judgment having been denied, defendant
interposed the present appeal.  Defendant
maintains that the lower court erred: 
(1) in finding that his answer is “a general denial”; (2)
“in finding the existence of a partnership” between the parties
“on the strength of mere affidavits”; and (3) “in awarding money
judgments x x x even before
the accounting” ordered in the decision appealed from had been rendered.

Under his first assignment of error, defendant argues that his
answer was not in the nature of a general denial, because he had averred
“that the alleged verbal partnership did not exist between him and the
plaintiff.” It should be noted, however, that “material averment in
the complaint, other than those as to the amount of damage, shall be deemed
admitted when not specifically denied x x
x.”1  Moreover, to
be specific, within the purview of the Rules of Court, a denial must not
only “specify each material allegation of fact the truth of
which” is not admitted.  He must, also,
“whenever practicable, x x set forth the
substance of the matters which he will rely upon to support his denial.”2 This, the defendant herein has not done.  Besides, we perceive no reason why, and he
does not claim, it would not be practicable for him to “set forth the
substance of the matters” on which he would rely to support his denial, if
the allegations in the complaint were not true.

Indeed, apart from alleging, in paragraph 2 of the complaint, the
existence of said oral contract of partnership, plaintiff averred, in
paragraphs 3, 4, 5, 6, 7, 8, 12, 13, 14, 16 and 17 of said pleading, the
specific sum contributed by him to the common fund, his particular share
therein and in the assets and proceeds of the business, the stipulation
concerning accounting, the months during which the defendant rendered account,
the month and year from which he allegedly failed and refused to comply with
his obli­gations, the specific amount of rental paid by the concessionaire of
the space where the defendant now runs a refreshment store; the date from which
the latter was operated by the defendant, the pre­cise sum advanced to
taxi-dancers and the exact amount of plaintiff’s share therein.

Yet, defendant’s answer limited itself to saying that he “denies
the allegations contained in paragraphs 2, 3, 4, 5, 6, 7, x x
8, x x 12, 13, x x 14, x x 16 and 17 of the plaintiff’s complaint.” Surely,
defendant could have said something else about the speci­fic topics of these
paragraphs, if he had any concrete matter on which to rely in controverting the allegations made therein, instead of
making a mere denial thereof.

No matter how we may view the situation, the conclusion is
inevitable that defendant has indulged and is indulging in no more than a
general denial of the material allegations in plaintiff’s complaint.1

Contrary to defendant’s contention, under his second assignment
of error, the lower court was fully justified in finding that the existence of
a partnership between the parties had been duly esta­blished.  Indeed, his aforementioned general denial of
the material allegations in the complaint resulted in the admission of the
truth of said allegations, including the allegation about the oral contract of
partnership between the parties.  This
admission by the defend­ant was bolstered up by the six (6) affidavits attached
to plaintiff’s motion for a summary judgment, which affidavits corroborate each
other and leave no room for doubt on the construction of the first floor of the
building on which the Center was operated, as plaintiff’s contribution to the
business of said partnership. 
Furthermore, the impact of said affidavits has been made overwhelming by
defendant’s failure to submit counter-affidavits – not even his own –
even, if only, to give a semblance of earnestness to the denials and
allegations made in his answer and in his opposition to plaintiff’s aforesaid
motion.

It is well-settled that a party against whom a motion for summary
judgment is made must show that he has a “plausible ground of defense,
something fairly arguable and of a substantial character,”1 a bona fide defense that he may be able to
establish.2 He can not take cover under an umbrella of general
and specific denials,3 or denials
of knowledge or information sufficient to form a belief,4 much less
repeat denials contained in his answer, or shelter behind pleadings already
filed in court.5

In connection with the third and last assignment of error made by
the defendant, it should be noted that, because of the ad­missions resulting
from defendant’s general denial and his failure to submit counter-affidavits to
offset those attached to plaintiff’s motion for a summary judgment, there is,
on record, no genuine issue on the fact:

1.  That a partnership exists
between the parties under the terms and conditions set forth in the complaint;

2.  That defendant received
from Juan Castillo the sum of P1,600, for delivery to the plaintiff, as the
price of his share or interest in the partnership;

3.  That defendant has been
running a refreshment store on a space in the Center operated by the
partnership which used to rent P6.00 a night or P180 a month, so that
plaintiff’s share therein is P60 monthly, or P240 for the four (4) months
during which it was leased to a concessionaire; and

4.  That one-third of the
P327.00 lent to the first taxi-dancers hired by the partnership and already
collected by the same, belongs to the plaintiff and should, therefore, be
refunded to him.

And there being no genuine issue on the foregoing facts, the
lower court had authority to render the proper summary judg­ment that said
facts justified,1 the reason for said judgment
being “to expedite or promptly dispose of cases where the facts appear
undisputed and certain from the pleadings, depositions, admissions and
affidavits.”2

As regards the sum of P1,600 received by the defendant from Juan
Castillo, in payment for plaintiff’s share in the part­nership, it was proper
for the decision appealed from to sentence the defendant to pay to the
plaintiff the aforementioned sum, with interest thereon, as directed in the
first subdivision of the dis­positive part of said
decision, since the understanding with Castillo was that the defendant would
turn it over to the plaintiff, to whom it rightfully belongs, without any
qualification whatsoever.

Concerning, however, the sums of P240 and P109 mentioned in the
second and third subdivisions of said dispositive
part, the authority of the lower court was limited to making a declaration of
plaintiff’s right to have these sums credited in his favor in the accounting
ordered in the fourth and fifth subdivisions of the aforementioned dispositive part. 
The actual amount recoverable by the plaintiff – except as to the price
of his share – will depend upon the result of such accounting.

Similarly, the amount of attorney’s fees to be awarded to the
plaintiff should, likewise, be fixed after said accounting, for, until the same
shall have been completed, it is not possible to determine, with reasonable
certainty, the nature and extent of the services rendered by his counsel.

In fact, because of the accounting ordered in the decision
appealed from, the same partakes of an interlocutory nature and is not appealable, pursuant to the doctrine laid down in Fuentebella v. Carrascosol1 and
reiterated in Zaldarriaga v. Zaldarriaga.2 We should not overlook, however, that this action
was instituted on January 27, 1959, and that, although the defendant has set
up, in effect, no defense whatsoever, he has managed to delay the final
determination of the case for almost ten (10) years now.  Besides, considering that none of the parties
has questioned the pro­priety of the appeal taken by the defendant, and that
the issues therein are purely legal in character, it is our considered opinion
that public interest and that of the parties herein would be served better by
settling those issues in this appeal, instead of remanding the case to the
lower court for the required accounting and let­ting the parties to,
thereafter, bring said issues back to this Court, in another appeal.

WHEREFORE,
the decision appealed from is hereby affirmed, except only with respect
to:  (1) the attorney’s fees, the amount
of which shall be determined upon completion of said accounting, and (2) the
aforementioned sums of P240 and P109, with interest on both, which shall be
credited to the plaintiff in the accounts to be submitted by the defendant, as
ordained in said decision.  The defendant
shall, also, pay the costs.

IT IS SO ORDERED.

Reyes, J.B.L., Dizon, Makalintal, Sanchez, Castro, Angeles, Fernando, and Capistrano, JJ., concur.

Zaldivar, J., did not take part.

^[1]
Judiciary Act of 1948.

1 Rule 9, Section 1, Rules of
Court.

2
Rule 8,
Section 10, Rules of Court.

1 Lichauco
v. Guash, 76 Phil. 5; El Hogar
Filipino v. Santos Investments Inc., 74 Phil. 79; Galofa
v. Nee Bon Sing, L­-22018, January 17, 1968.

1 Moore’s Federal Practice, Vol.
3, pp. 3184-3185 (1938), citing Dwan v. Massarene, 192 NYS 577, 582; Strasburger
v. Rosenheim, 255 NYS 316; see also 41 Am. Jur. Pleading, Sec. 172, pp. 414-415; 49 C.J.S. Judgments,
Sec. 225(c), pp. 419-422.

2 “To avert summary judgment
in favor of plaintiff, the affidavits or other proof adduced by defendant must
disclose a good defense or set out facts and circumstances sufficient to raise
a triable issue of fact and to entitle defendant to
defend.” 49 C.J.S. 225(c) p. 419; Perez v. Tomberlin,
340 Pac. 2d 982; Wainscott v.
Penikoff, 4 N.E. 2d 511; Lewis v. Hat Corp. of
America, 150 A 2d
750.

3 La Pointe v. Wilson, 61
NYS 2d 64; Marra v. Warren, 80 NYS 2d 412;
O’Meara Co. v. National Park Bank, 146 N.E. 636; Continental Cas. Co. v. Belknap Hardware
& Manufacturing Co. 281 S.W. 2d 914; General Inv. Co. v. Interborough Rapid Transit Co. 139 N.E. 216.

4 New Jersey
Mort. & Invest. Corp. v. Calvetti, 171 A
2d 321.

5 Atchison
v. McGee, 296 Pac. 2d 860.

1 Urmaneta
v. Manzano, L-17478, February 28, 1962; Go Leting & Sons v. Leyte
Land Trans. Co., L-8887, May 28, 1958; Philippine National Bank v.
Philippine Leather Co., 105 Phil. 400, 403-404; Londres
v. National Life Insurance Co. of the Philippines, 94 Phil. 627; Jugador v. De Vera, 94 Phil. 704; Capital Insurance
& Surety Co. v. Eberly, 100 Phil. 398;
Miranda v. Malate Garage & Taxicab, 99
Phil. 670.

2 Singleton v.
Philippine Trust Co., 99 Phil. 91, 97.

1 G.R. No. 48102, May 27, 1942.

2 L-13252, April 29, 1961.  See, also, Dy Chun v.
Men­doza, L-25461, October 4, 1968; Anota
v. Bermudo, L-29417, September 21, 1968; Salazar v. Torres,
L-13711, May 25, 1960.