G.R. No. L-29033 July 31, 1970
ARABAY INCORPORATED, plaintiff-appellee, vs. JOSE C. AQUINO doing business under the name and style of JOSE C. AQUINO LUMBER and GENERAL MERCHANDISE, and JOSE C. AQUINO LUMBER and PLYWOOD INDUSTRIES, INC., defendants-appellants.

FACTS

Arabay, Incorporated filed a complaint for collection of a sum of money against Jose C. Aquino and Jose C. Aquino Lumber and Plywood Industries, Inc. based on a promissory note dated March 1, 1967. The defendants, jointly and severally, bound themselves to pay the plaintiff the sum of P8,964.19 on installments, with the entire outstanding balance becoming due upon failure to pay any installment. The complaint alleged defendants defaulted on the second and subsequent installments, leaving an unpaid balance of P753,000.00. The promissory note, signed by Jose C. Aquino, also stipulated for the payment of an additional amount equivalent to 25% of the total collectible account as attorneys’ fees and costs of collection in case of court action. In their answer, defendants admitted the allegations regarding the execution of the note, the stipulation on acceleration and attorneys’ fees, and their default. They raised affirmative defenses, including that the note was prepared solely by the plaintiff and signed without checking their records in the belief it could be revised later, and that due to business reverses, they had asked the plaintiff for a reduction of the monthly installments from P50,000.00, showing a sincere desire to compromise. The plaintiff moved for judgment on the pleadings. The trial court initially deferred resolution to allow a compromise period, but after the parties failed to settle, it granted the motion and rendered judgment in favor of the plaintiff.

ISSUE

Whether the trial court correctly rendered a judgment on the pleadings.

RULING

Yes, the trial court correctly rendered a judgment on the pleadings. The defendants’ answer failed to tender a genuine issue. They admitted the material allegations of the complaint: the existence of the indebtedness, the execution of the promissory note, their default in payment, and the stipulated attorneys’ fees. Their defenses—that they signed the note believing it could be revised, requested a reduction of installments due to financial difficulty, and desired to compromise—did not constitute valid defenses against the enforceability of the note. The inability to pay is not a defense to delay a due obligation, and the plaintiff was not obligated to grant the request for revision. No fraud or error affecting the note’s validity was alleged. Consequently, with no issue raised by the answer, judgment on the pleadings was proper. The award of P20,000.00 as attorneys’ fees and costs of collection, being less than the 25% stipulated and within the court’s discretion, was also upheld. The decision was affirmed.