BELL CARPETS INTERNATIONAL TRADING CORPORATION, PETITIONER, VS. HON. COURT OF APPEALS, HON. MI­LAGROS CAGUIOA, VICTOR R. STA. ANA, AND MANILA BAY SPINNING MILLS, INC., RESPONDENTS.

Bell Carpets International Trading Corporation versus Court of Appeals

The Case

This is a petition for review on certiorari brought by Bell Carpets International Trading Corporation against the Court of Appeals, the trial judge, a private individual, and Manila Bay Spinning Mills, Incorporated. The dispute began as a simple collection suit for unpaid yarn, but it grew into a contest over the ownership of goods seized under a writ of preliminary attachment, and over the propriety of a summary judgment and its execution. The case matters because it teaches the strict hierarchy of remedies: a final judgment must be appealed, not attacked by certiorari, and it teaches when a court may treat pleaded defenses as sham and render summary judgment.

Procedural History

Manila Bay Spinning Mills sued Carpets International in the Regional Trial Court at Pasig for the unpaid balance of the purchase price of yarn, and obtained a writ of preliminary attachment. Bell Carpets filed a third-party claim to part of the attached property, and on motion it was impleaded as a party defendant on the theory that it and Carpets International were one and the same entity. The trial court granted a motion for summary judgment in favor of Manila Bay Spinning Mills and later granted execution pending appeal. Bell Carpets then filed a special civil action of certiorari with the Intermediate Appellate Court, which affirmed the summary judgment and denied reconsideration. Bell Carpets appealed to the Supreme Court on certiorari.

Facts

From June 1983 to October 1983, Manila Bay Spinning Mills delivered yarn to Carpets International. Carpets International issued post-dated checks, which were dishonored on presentment. Manila Bay Spinning Mills then sued for the unpaid balance and applied for preliminary attachment on the ground of fraud in contracting the obligation and of disposing of property with intent to defraud.

The writ issued, and the sheriff seized machinery, equipment, raw materials, and finished products found at the factory in Bagumbayan, Taguig. Bell Carpets filed a third-party claim to the inventory, finished products, and hand tools. Carpets International posted a counterbond to dissolve the attachment, and later a bond of one million pesos was filed by Manila Bay Spinning Mills to restore it. Carpets International then manifested that none of the attached items belonged to it.

Manila Bay Spinning Mills moved for summary judgment, arguing that the indebtedness, its amount, and the ownership of the attached property were all admitted. The trial court rendered summary judgment against Carpets International and later allowed execution pending appeal. Bell Carpets insisted it was a separate and distinct corporation with no part in the transactions, and claimed ownership of the seized goods.

Issues

• Whether or not the summary judgment had become final and executory, and whether certiorari could substitute for the lost remedy of appeal.
• Whether or not the trial court gravely abused its discretion in rendering summary judgment despite the pleaded issues of fact on ownership and indebtedness.
• Whether or not the levy on execution against the property claimed by Bell Carpets was a despotic exercise of judicial authority.

Applicable Provisions

Section 8 of Rule 8 of the Rules of Court provides:

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.

This governs whether Carpets International made a judicial admission of the documents sued upon.

Section 2 of Rule 129 provides:

Judicial admissions do not require proof and cannot be contradicted unless previously shown to have been made through palpable mistake.

This explains why the denials of Carpets International could not raise a genuine issue of fact.

Ruling

On the first issue, the Court held that the summary judgment was final and executory because it disposed of the case on the merits and left nothing more to be done by the trial court. The remedy was an appeal within fifteen days from notice, regardless of whether the questions raised were of fact or of law, or involved jurisdiction or grave abuse of discretion. Certiorari under Rule 65 could not substitute for appeal under Rule 41, because the existence and availability of the right of appeal are antithetical to the availment of the special civil action of certiorari.

On the second issue, the Court held that the summary judgment was correctly rendered. Carpets International failed to deny specifically and under oath the genuineness and due execution of the documents attached to the complaint, giving rise to a judicial admission. Its officials had also admitted in affidavits at the preliminary investigation that the company bought the yarn, and it had posted a bond to discharge the attachment. Its denials were therefore sham, fictitious, and contrived.

On the third issue, the Court held that Bell Carpets' claim of title was likewise sham and fictitious. The attached goods were found in the factory of Carpets International, Carpets International filed a bond to discharge the attachment covering those goods, and Bell Carpets presented no evidence to show how it came to own them. The findings of fact of the appellate court bound the Supreme Court.

Doctrine

A final judgment that disposes of the case on the merits must be appealed within the reglementary period; certiorari is not a substitute for a lost appeal. A party who fails to deny under oath the genuineness and due execution of a written instrument attached to the pleading makes a judicial admission that requires no proof and cannot be contradicted absent palpable mistake. Where the pleadings, admissions, and affidavits show no genuine issue as to any material fact, summary judgment is proper.

Disposition

The petition was denied, and the judgment of the Intermediate Appellate Court sustaining the trial court was affirmed, with costs against Bell Carpets.

Remember This

Certiorari cannot replace a lost appeal, and a final summary judgment stands when the defenses are sham. Examiners use this case on the hierarchy of remedies and on judicial admissions under Section 8 of Rule 8.