40 Misamis Occidental II Coop V David
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ArtemisTzy40 Misamis Occidental II Coop V David
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ArtemisTzyMisamis Occidental II Cooperative Inc., petitioner, vs. Virgilio S. David, respondent.
G.R. No. 129928, Second Division, August 25, 2005, Tinga, J
The test of sufficiency of facts alleged in the complaint as constituting a cause of action
is whether or not admitting the facts alleged, the court could render a valid verdict in
accordance with the prayer of said complaint.
FACTS:
Private respondent Virgilio S. David, a supplier of electrical hardware, filed a
case for specific performance and damages against MOELCI II, a rural electric
cooperative in Misamis Occidental, docketed as Civil Case No. 94-69402 entitled
"Virgilio David v. Misamis Occidental II Electric Cooperative, Inc. (MOELCI II)." The said
case, which was essentially a collection suit, pending before Judge Felixberto Olalia of
the Regional Trial Court of Manila, Branch 8 was predicated on a document attached as
Annex "A to the Amended Complaint that according to David is the contract pursuant to
which he sold to MOELCI II one (1) unit of 10 MVA Transformer. MOELCI II filed
its Answer to Amended Complaint which pleaded, among others, affirmative defenses
which also constitute grounds for dismissal of the complaint. These grounds were lack
of cause of action, there being allegedly no enforceable contract between David and
MOELCI II under the Statute of Frauds pursuant to Section 1 (g) and (i), Rule 16 of
the Rules of Court, and improper venue.
The Court of Appeals dismissed MOELCI II's petition holding that the allegations
in David's complaint constitute a cause of action. With regard to MOELCI II's contention
that David's Amended Complaint is dismissible as the document, attached thereto as
Annex "A," upon which David's claim is based is not a contract of sale but rather a
quotation letter, the Court of Appeals ruled that the interpretation of the document
requires evidence aliunde which is not allowed in determining whether or not the
complaint states a cause of action. The appellate court further declared that when the
trial court is confronted with a motion to dismiss on the ground of lack of cause of
action, it is mandated to confine its examination for the resolution thereof to the
allegations of the complaint and is specifically enjoined from receiving evidence for that
purpose.
ISSUE: Whether the trial court did not commit grave abuse of discretion in denying
petitioner's Motion.
RULING: The court found no error in the ruling of the Court of Appeals.
A preliminary hearing undeniably is subject to the discretion of the trial court.
Absent any showing that the trial court had acted without jurisdiction or in excess
thereof or with such grave abuse of discretion as would amount to lack of jurisdiction, as
in the present case, the trial court's order granting or dispensing with the need for a
preliminary hearing may not be corrected by certiorari.
Moreover, consistent with our ruling in The Heirs of Juliana Clavano v. Genato,
as MOELCI II's Motion is anchored on the ground that the Complaint allegedly stated no
cause of action, a preliminary hearing thereon is more than unnecessary as it
constitutes an erroneous and improvident move. No error therefore could be ascribed to
the trial court in the denial of such Motion.
To determine the existence of a cause of action, only the statements in the
complaint may be properly considered. It is error for the court to take cognizance of
external facts or hold preliminary hearings to determine their existence. If the allegations
in a complaint furnish sufficient basis by which the complaint can be maintained, the
same should not be dismissed regardless of the defenses that may be averred by the
defendants. The test of sufficiency of facts alleged in the complaint as constituting a
cause of action is whether or not admitting the facts alleged, the court could render a
valid verdict in accordance with the prayer of said complaint.
It has been hypothetically admitted that the parties had entered into a contract
sale David bound himself to supply MOELCI II (1) unit 10 MVA Power transformer with
accessories for a total price of P5,200,000.00 plus 69 KV Line Accessories for a total
price of P2,169,500.00; that despite written and verbal demands, MOELCI II has failed
to pay the price thereof plus the custom duties and incidental expenses of P272,722.27;
and that apart from the previously stated contract of sale, David regularly delivered
various electrical hardware to MOELCI II which, despite demands, has an outstanding
balance of P281,939.76. We believe all the foregoing sufficiently lay out a cause of
action. Even extending our scrutiny to Annex "A," which is after all deemed a part of
the Amended Complaint, will not result to a change in our conclusion.
Finally, we do not agree with MOELCI II's contention that the Court of Appeals
sanctioned the trial court's deferment of the resolution of MOELCI II's Motion. The trial
court squarely denied the Motion and not merely deferred its resolution. Thus, there is
no deferment to speak of that should be enjoined.
