A judicial admission is an admission, verbal or written, made by a party in the course of the proceedings in the same case, which dispenses with the need for proof with respect to the matter or fact admitted. It may be contradicted only by showing that it was made through palpable mistake or that no such admission was made.
Gordon and Amy, residents of the US, made known to Donabelle, then working at the Department of Labor and Employment (DOLE), that they intend to buy a property in Las Pinas. The latter informed them that there is a property to be sold in a public auction by the DOLE Sheriff’s Office, thus they transferred to Donna’s bank account US$60,000.00 or P3M for the purchase of the Las Pinas property. Donabelle, however, furnished them photocopies of titles located in Manila and Paranaque, which the spouses are not interested in, thus they informed Donabelle that they were no longer interested in acquiring the Las Pinas property or the properties in Manila and Paranaque which were offered by the same judgment debtor to Donabelle. Donabelle thus gave them an acknowledgement receipt for the P3M and promised to return it by September 1, 2002. As nothing came out of the promise, the spouses filed a case for collection of sum of money, moral damages and attorney’s fees against petitioner.
In her answer, Donabelle admitted receipt of the P3M, but averred that the intended purchase of the Las Pinas property did not push through as there was a third party claimant to the property; the judgment debtor however promised to sell to her properties in Manila and Paranaque, and in fact she (thru a friend) was the winning bidder in the public auction thereof, thinking that the purchase of the properties would be beneficial for the spouses, but the spouses were not interested in the Las Pinas property anymore, thus she promised to return the money after selling the Manila and Paranaque properties.
The RTC dismissed the case for insufficiency of evidence, ruling that the bank transaction presented by the plaintiffs did not comply with the Best Evidence Rule; neither was the acknowledgment receipt issued by Donabelle duly identified and authenticated as a private instrument.
On appeal to the CA, however, the appellate court reversed the RTC ruling. The CA held that the spouses need not prove the fact that they sent money to Donabelle because the latter’s admission that the amount of P3,000,000.00 was transmitted to her, having been made in her Answer, could be treated as a judicial admission. It pronounced that Donabelle’s admission was sufficient to prove that she received money from the respondent-spouses even without the documents presented by the latter. The appellate court added that petitioner was legally bound to return the P3,000,000.00 which she received from respondent-spouses considering that the purchase of the Las Piñas property did not materialize.
The Issue:
Whether or not the admissions in the Answer filed by Donabelle constitute judicial admissions.
The Ruling:
The petition lacks merit.
Statements in the Answer constitute judicial admissions which bind petitioner.
A judicial admission is an admission, verbal or written, made by a party in the course of the proceedings in the same case, which dispenses with the need for proof with respect to the matter or fact admitted. It may be contradicted only by showing that it was made through palpable mistake or that no such admission was made.
A party who judicially admits a fact cannot later challenge [the] fact as judicial admissions are a waiver of proof; production of evidence is dispensed with. A judicial admission also removes an admitted fact from the field of controversy. Consequently, an admission made in the pleadings cannot be controverted by the party making such admission and is cannot be controverted by the party making such admission and is conclusive as to such party, and all proofs to the contrary or inconsistent therewith should be ignored, whether objection is interposed by the party or not. The allegations, statements or admissions contained in a pleading are conclusive as against the pleader. A party cannot subsequently take a position contrary to or inconsistent with what was pleaded.
Petitioner argues that the allegations in her Answer are not admissions, but are actually defenses to show that the complaint states no cause of action; and that the alleged admission, with respect to her receipt of the P3,000,000.00 from respondent-spouses, was taken out of context because in that narration, she actually denied persuading respondent-spouses to remit money for the purchase of the Las Piñas property.
A perusal, however, of petitioner’s Answer leads to the conclusion that her arguments are just a futile attempt to sow confusion in an otherwise indisputable case. In her Answer, petitioner made the following statements:
x x x x
4. Defendant denies the allegations contained in items 4, 5, 6, and 7, [of the] complaint, that defendant proposed and convinced the plaintiffs, the truth of the matter being that:
x x x x
f. Plaintiff knew what they were venturing into, the defendant fully explaining to them the procedures. On their own accord, the plaintiffs sent money via bank-to-bank transaction, contrary to their claim that plaintiffs caused to debit and remit the amount of US$60,000.00 to defendant’s account only upon the instruction of the [defendant]. It cannot be overemphasized that the defendant is junior to the plaintiffs and that she has no power to direct order on what to do with their money. x x x
x x x x
20. The complaint states no cause of action.
- x x x Plaintiffs may have sent money to defendant but not in the form of loan. The money was sent to invest in properties, primarily Las Piñas City. The money sent was used to purchase properties for the plaintiffs, however, it happened that the plaintiffs were not satisfied with the purchase, as such, as an afterthought, plaintiffs wanted to get back the money from defendant. (Emphases supplied)
From the foregoing, it is incontrovertible that petitioner does not even deny that she received P3,000,000.00 from respondent-spouses. What she simply denies is the allegation that it was because of her insistence that respondent-spouses remitted money to her account. Petitioner, however, fails to realize that whether or not she persuaded respondent-spouses to purchase the Las Piñas property is beside the point. To resolve the controversy between the parties, the issue simply boils down to whether petitioner received P3,000,000.00 from respondent-spouses and as can be gleaned from her Answer, petitioner admitted such fact. She failed to prove that the admission was made through palpable mistake or that no such admission was made. Her arguments, therefore, are mere desperate attempts to escape liability.
There is an implied agency between petitioner and respondent-spouses.
By the contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. Agency may be express, or implied from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf without authority. Acceptance by the agent may also be express, or implied from his acts which carry out the agency, or from his silence or inaction according to the circumstances.
A contract of agency may be inferred from all the dealings between petitioner and respondent-spouses. The question of whether an agency has been created is ordinarily a question which may be established in the same way as any other fact, either by direct or circumstantial evidence. The question is ultimately one of intention.In this case, respondent-spouses communicated with petitioner as regards the purchase of the Las Piñas property and they remitted P3,000,000.00 to petitioner’s account for such purpose. For her part, petitioner made inquiries with the DOLE Sheriff’s Office and even talked to the judgment creditor for the purchase of the said property. Also, she received P3,000,000.00 from respondent-spouses to finalize the transaction. Thus, it is beyond dispute that an implied agency existed between petitioner and respondent-spouses for the purpose of purchasing the Las Piñas property.
Petitioner, however, acted beyond the scope of her authority. It is worthy to note that it was petitioner who introduced to respondent-spouses the idea of participating in the auction sale of the Las Piñas property. When the parties came to an agreement as to the purchase of the said property, petitioner was then unaware of other properties which were going to be sold on auction. As a result, the parties never agreed on a substitute property to be purchased in case the bidding of the Las Piñas property failed to materialize. As it happened, the Las Piñas property could not be auctioned on account of a third-party claim. Thus, when petitioner was informed that certain properties in Manila and Parañaque were to be auctioned for the same judgment creditor, she proceeded to participate in the bidding and decided not to wait for respondent-spouses’ approval.It was only after the sale that petitioner informed respondent-spouses that she already settled for the Manila and Parañaque properties, worth more than P3,000,000.00 in valuation.Thus, even though petitioner may have been motivated by good intentions and by a sincere belief that the purchase of the Manila and Parañaque properties would benefit respondent-spouses, it cannot be gainsaid that she acted outside the scope of the authority given to her, i.e., to purchase the Las Piñas property. Hence, petitioner’s failure to fulfill her obligation entitles respondent-spouses to the return of the P3,000,000.00 which they remitted to her account.
Petitioner is liable for the payment of compensatory interest.
The kinds of interest that may be imposed in a judgment are the monetary interest and the compensatory interest. In this regard, the Court has expounded in Siga-an v. Villanueva:
Interest is a compensation fixed by the parties for the use or forbearance of money. This is referred to as monetary interest. Interest may also be imposed by law or by courts as penalty or indemnity for damages. This is called compensatory interest. The right to interest arises only by virtue of a contract or by virtue of damages for delay or failure to pay the principal loan on which interest is demanded.
Article 1956 of the Civil Code, which refers to monetary interest, specifically mandates that no interest shall be due unless it has been expressly stipulated in writing. As can be gleaned from the foregoing provision, payment of monetary interest is allowed only if: (1) there was an express stipulation for the payment of interest; and (2) the agreement for the payment of interest was reduced in writing. The concurrence of the two conditions is required for the payment of monetary interest. Thus, we have held that collection of interest without any stipulation therefor in writing is prohibited by law.
x x x x
There are instances in which an interest may be imposed even in the absence of express stipulation, verbal or written, regarding payment of interest. Article 2209 of the Civil Code states that if the obligation consists in the payment of a sum of money, and the debtor incurs delay, a legal interest of 12% per annum may be imposed as indemnity for damages if no stipulation on the payment of interest was agreed upon. Likewise, Article 2212 of the Civil Code provides that interest due shall earn legal interest from the time it is judicially demanded, although the obligation may be silent on this point.
All the same, the interest under these two instances may be imposed only as a penalty or damages for breach of contractual obligations. It cannot be charged as a compensation for the use or forbearance of money. In other words, the two instances apply only to compensatory interest and not to monetary interest.
Clearly and contrary to petitioner’s assertion, the interest imposed by the CA is not monetary interest because aside from the fact that there is no use or forbearance of money involved in this case, the subject interest was not one which was agreed upon by the parties in writing. Further, the appellate court, after citing Eastern Shipping Lines, Inc. v. Court of Appeals wherein the Court synthesized the rules on the award of interest, imposed an interest of 6% per annum which finds application in transactions involving the payment of indemnities in the concept of damages arising from breach or a delay in the performance of obligations in general. Hence, there can be no other conclusion than that the interest imposed by the appellate court is in the nature of compensatory interest.
As a form of damages, compensatory interest is due only if the obligor is proven to have failed to comply with his obligation.In this case, petitioner’s principal obligation was to purchase the Las Piñas property for respondent-spouses. Consequently, when she was informed that the auction sale of the Las Piñas property would have to be cancelled, petitioner should have simply returned the P3,000,000.00 to respondent-spouses instead of purchasing the Manila and Parañaque properties without the latter’s knowledge and consent. Moreover, she insists that she would return such amount only after she successfully sells the Manila and Parañaque properties. Contrary to petitioner’s argument, however, the obligation to return the amount is not dependent upon the sale of the Manila and Parañaque properties. The obligation to return the money is a consequence of her failure to comply with her principal obligation, the breach thereof entitles respondent-spouses to the payment of interest at the rate of 6% per annum, which, as pronounced in Eastern Shipping Lines and subsequently reiterated in Nacar v. Gallery Frames is the rate of interest applicable in transactions involving the payment of indemnities in the concept of damages arising from the breach or a delay in the performance of obligations in general. The payment of interest should be reckoned from the date of filing of the Complaint or on March 6, 2006.
WHEREFORE, the petition is DENIED. The March 31, 2016 Decision and August 10, 2016 Resolution of the Court of Appeals in CA-G.R. CV No. 05172 are AFFIRMED with MODIFICATION in that the amount of P3,000,000.00 shall earn interest at the rate of 6% per annum from the date of filing of the Complaint on March 6, 2006 until the Decision becomes final and executory.
An interest of 6% per annum shall be further imposed on the amount from the finality of the Decision until its satisfaction.
SO ORDERED.
J. REYES, JR., J.:
Peralta, (Chairperson), Leonen, and Gesmundo, JJ., concur.
Hernando, J., on wellness leave.
G.R. No. 226587, November 21, 2018, DONABELLE V. GONZALES-SALDANA, PETITIONER, VS. SPOUSES GORDON R. NIAMATALI AND AMY V. NIAMATALI, RESPONDENTS.
Citations omitted.