CASENT REALTY DEVELOPMENT CORP. vs. PHILBANKING CORP. G.R. No.

150731 September 14, 2007 Facts: Casent Realty

Developmet Corp. executed two promissory notes in favor of Rare
Realty. These promissory notes were used by Rare Realty as a security
for a loan that Rare Realty obtained from Philbanking wherein a Deed
of Assignment was executed. When Rare Realty failed to pay its debt,
the bank went after the security of the loan. The bank demanded
payment based on the promissory notes issued by Casent Realty Corp
to Rare Realty by virtue of the deed of assignment. On a separate loan
with Philbanking, Casent Realty satisfied its obligation by executing a
Dacion en pago. Philbanking filed for a complaint for the collection of
payment against Casent based on the promissory notes. Casent Realty,
in its answer, raised that a Dacion en pago was already executed which
extinguished its obligation. Philbanking failed to file a reply. Casent
Realty points out that the defense of Dacion and Confirmation
Statement, which were submitted in the Answer, should have been
specifically denied under oath by respondent in accordance with Rule
8, Section 8 of the Rules of Court. Its failure to reply constituted an
admission on the part of the bank. Issue: Whether or not failure to file
a Reply and deny the Dacion and Confirmation Statement under oath
constitute a judicial admission of the genuineness and due execution of
these documents Held: Yes. Since respondent failed to file a Reply, in
effect, respondent admitted the genuineness and due execution of said
documents. This judicial admission should have been considered by
the appellate court in resolving the demurrer to evidence. Since
respondent failed to deny the genuineness and due execution of the
Dacion and Confirmation Statement under oath, then these are
deemed admitted and must be considered by the court in resolving the
demurrer to evidence.