Demurrer to Evidence Dismissal Upheld for Insufficient Proof of Installment Sale and Insurable Interest

A civil case can end without the defendant ever presenting evidence. This happens through a demurrer to evidence, a procedural move that asks the court to dismiss the complaint on the ground that the plaintiff has not proven a right to relief. In Felipe v. MGM Motor Trading Corporation, G.R. No. 191849 (September 23, 2015), the Supreme Court affirmed the dismissal of a complaint for specific performance and damages after the plaintiff failed to prove an installment sale and an insurable interest in a vehicle.

The dispute over a Nissan Terrano

Frederick Felipe sued MGM Motor Trading Corporation and Ayala General Insurance Corporation. He claimed he bought a Nissan Terrano Wagon on installment through an MGM representative, paying a downpayment, a reservation fee, and several postdated checks. The vehicle was delivered to him in May 1997, and he insured it with Ayala Insurance.

In November 1997, the vehicle was reportedly lost while parked in Manila. Felipe tried to claim from Ayala Insurance, which refused to pay. MGM, for its part, allegedly refused to produce the installment sale documents and later insisted the transaction had been for cash.

MGM denied the installment claim. It said it had offered a discount for cash payment, delivered the vehicle, but never received full payment, which is why it withheld the registration papers. MGM added that Felipe's mother issued a postdated check for the balance, which bounced, leading to a criminal case under Batas Pambansa Bilang 22. Ayala Insurance argued that Felipe had no insurable interest because he did not own the vehicle.

What the trial court admitted as evidence

During trial, Felipe testified, but his testimony was stricken from the record after he repeatedly failed to return for cross-examination. Only two pieces of evidence were admitted: an official receipt dated May 7, 1998 showing MGM received P200,000.00 from Felipe, and the testimony of his father, Alberto, who said he witnessed that payment.

Both defendants filed demurrers to evidence. The Regional Trial Court dismissed the complaint, and the Court of Appeals affirmed. The case reached the Supreme Court on a petition for review.

The rule on demurrer to evidence

Under Rule 33, Section 1 of the 1997 Rules of Civil Procedure, after the plaintiff finishes presenting evidence, the defendant may move for dismissal on the ground that, upon the facts and the law, the plaintiff has shown no right to relief. If the motion is denied, the defendant may still present evidence. If it is granted and later reversed on appeal, the defendant is deemed to have waived the right to present evidence.

The Supreme Court explained that the essential question is whether the plaintiff has shown an entitlement to his claim. The Court also stressed that a petition for review under Rule 45 covers only questions of law, not questions of fact. Whether the sale was on cash or installment basis, and whether Felipe had an insurable interest, are questions of fact. The Court generally defers to the trial judge's factual findings because the judge observed the witnesses firsthand.

Why the complaint failed

The Court held that the trial court correctly dismissed the complaint. The burden of proof lies on the party who makes the allegations. Felipe alleged an installment sale, but the only admitted evidence was his father's testimony and the receipt for P200,000.00. A receipt for partial payment does not prove that the purchase was made on installment. Felipe presented no document to support his claim, while MGM produced a sales invoice stating the mode of payment was "COD" or cash on delivery.

As for Ayala Insurance, Felipe bore the burden of proving that a loss occurred and that the loss was covered by his policy. None of the two admitted pieces of evidence tended to prove the loss of the vehicle or its coverage. Without that proof, he was not entitled to the reliefs he prayed for.

Practical takeaways

• A demurrer to evidence lets the defendant ask for dismissal after the plaintiff rests, on the ground that the evidence presented shows no right to relief under Rule 33, Section 1 of the Rules of Court.
• The plaintiff carries the burden of proving every material allegation of the complaint. A receipt for partial payment, standing alone, does not establish an installment sale.
• In an insurance claim, the insured must prove both that a loss occurred and that the loss falls within the policy's coverage.
• Evidence that is never admitted, or testimony stricken for failure to submit to cross-examination, cannot support a judgment.
• Factual findings of the trial court, especially on credibility, are generally respected on appeal, and a Rule 45 petition may raise only questions of law.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.