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PACIFIC REHOUSE CORP vs. EIB SECURITIES, INC.

By: DORIA
GR No. Topic: Judgment on the pleadings
Date:

FACTS
1. EIB (defendant) is the stockbroker of Pacific Rehouse Corporation (petitioners).
2. From June 2003 to March 2004, petitioners, through their broker, EIB, bought 60,790,000 KKP shares of stock at the Philippine
Stock Exchange (PSE).
3. On various dates in July and August 2003, petitioners acquired DMCI shares. A total of 32,180,000 DMCI shares of stock
owned by petitioners were placed in the custody or control of EIB.
4. On April 1, 2004, petitioners ordered the sale of 60,790,000 KPP shares to any buyer at the price of 0.14 per share. The sale was
with an obligation to buy back or reacquire the KPP shares at 0.18 per share within 30 days from date of transaction.
5. Petitioners failed to reacquire or buy back the KPP shares, so EIB had no recourse but to sell the DMCI shares of petitioners to
reacquire the KPP shares.
6. So, on various dates in June 2004, EIB, without petitioners knowledge and consent, sold petitioners 32,180,000 DMCI shares at
the controlling market price. EIB later sent sales confirmation receipts and statement of accounts to petitioners regarding the sale
of their DMCI shares.
7. On January 12, 2005, petitioners wrote EIB demanding the return of the 32,180,000 DMCI shares. EIB rejected petitioners
demand for the return of the DMCI shares, as those were already sold to cover the buy back of the KPP shares.
8. In the complaint, petitioners pray for the return of the 32,180,000 DMCI shares by EIB to them.
9. EIBs answer contained admissions and specific denials.
10. On July 19, 2005, petitioners registered a Motion for Judgment on the Pleadings, asserting that EIB materially admitted the
allegations of their complaint by not tendering any genuine issue in its answer.

RTC: rendered its judgment on the pleadings directing 1) the defendant to return the petitioners 32,180,000 DMCI shares, as of
judicial demand; 2) to reimburse the defendant the amount of P10,942,200.00, representing the buy back price of the 60,790,000
KPP shares of stocks at P0.18 per share.

The trial court found merit in rendering a judgment on the pleadings: first, the assailed transactions were all documented; second,
the transactions were admitted by the parties; and third, the main issues can be resolved based on the parties documentary
evidence appended to the pleadings.

CA: rendered a decision revoking RTCs judgment on the pleadings and remanded the case back to the RTC for further
proceedings.

The CA found that while some material allegations in petitioners complaint were admitted by EIB, the latters answer nonetheless
raised other genuine issues which it viewed can only be threshed out in a full-blown trial, like the average price of the KPP shares
of stock, the scope of the collaterals stated in the Notices of Sale and the monetary claims of the defendant against the petitioners.

ISSUE/S
Whether judgment on the pleadings Is proper? YES
RULING

Based on the admissions in the pleadings and documents attached, the Court finds that the issues presented by the complaint and
the answer can be resolved within the four corners of said pleadings without need to conduct further hearings.

Judgment on the pleadings is, therefore, based exclusively upon the allegations appearing in the pleadings of the parties and the
annexes, if any, without consideration of any evidence aliunde. When what is left are not genuinely issues requiring trial but
questions concerning the proper interpretation of the provisions of some written contract attached to the pleadings, judgment on
the pleadings is proper.

As explained by the Court in Philippine National Bank v. Utility Assurance & Surety Co., Inc., when what remains to be done is
the proper interpretation of the contracts or documents attached to the pleadings, then judgment on the pleadings is proper.
In the case at bar, the issue of whether the sale of DMCI shares to effectuate the buy back of the KKP shares is valid can be
decided by the trial court based on the SDAA, Notices of Sale, Sales Confirmation Receipts, the letters of the parties, and other
appendages to the pleadings in conjunction with the allegations or admissions contained in the pleadings without need of trial.
Regarding CAs findings that EIBs answer raised other genuine issues: To the mind of the Court, these matters are not genuinely
triable issues but actually minor issues or mere incidental questions that can be resolved by construing the statements embodied in
the appendages to the pleadings. The facts that gave rise to the side issues are undisputed and were already presented to the trial
court rendering trial unnecessary.
DOCTRINE NOTES