University of the Philippines College of Law

3D

Topic WHAT NEED NOT BE PROVED: Judicial Admissions

Case No. G.R. Nos. 119053 / January 23 1997
Case Name ATILLO III VS CA
Ponente FRANCISCO

DOCTRINE:

GR: A judicial admission is conclusive upon the party making it and doesnt require proof.
Except:

1. When it's shown that the admission was made thru palpable mistake; and
2. When it's shown that no such admission was in fact made.

GR: Facts alleged in a party's pleading are deemed admissions and are binding, but this is not absolute rule.
An answer is a mere statement of fact which the party filing it expects to prove. It is NOT evidence

RELEVANT FACTS

 Florentino L. Atillo III owned and controlled Amancor Inc.

o Contracted 1M loan with Metrobank
 Secured by real estate owned by Atillo.
o Before the loan was paid, Atillo executed a Memorandum of Agreement with Michell Lhuillier
where M. Lhuiller bought shares in Amancor.
o Due to urgent need for capital, Atillo and Lhuillier entered into another MOA:
 Lhuillier undertook to invest additional capital.
 As an addendum, a Supplemental MOA was executed wherein Atillo assumed
Amancor’s outstanding loan (subject to interest and reimbursement):

4. F.L. Atillo III may dispose off his properties at P. del Rosario St., Cebu City which may
involve pre-payment of AMANCOR'S mortgage loan to the bank estimated at
P300,000.00 and while AMANCOR may not yet be in the position to re-pay said amount
to him, it shall pay the interests to him equivalent to prevailing bank rate.

 The amount due to Atillo was P199,888.89.

 Amancor failed to pay the amount, thus Atillo filed a complaint for collection against Amancor and
Lhuillier.
 At the pre-trial conference, the parties admitted the due execution and genuineness of both MOAs and
the supplemental agreement (all 3 documents). The following were affirmed:
o Due execution of the 3 MOAs, and
o Petitioner’s claim really amounted to PHP199,888.89
o Questions then:
(1) Is Lhuillier personally liable to Atillo from the 3 MOAs?
(2) What is the rate of interest to be paid?

 RTC: In favor of petitioner, ordered AMANCOR to pay 199k with interest. Lhuillier absolved of personal
liability.
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3D

 Pet appealed to CA and argues: Lhuiller signed the MOA without official participation or ratifcation of
AMANCOR. Lhuiller should've been jointly and severally liable with AMANCOR.
 CA affirmed RTC. CA said that if Pet really believes in indebtedness of Lhuiller, he shouldn’t have offset
some of his accounts with AMANCOR. Defendant was only an officer/agent of the corporation.
 SC: Atillo argues that Lhuillier made a judicial admission in his Answer where he stated that:

3.11. In all the subject dealings, it was between plaintiff and Lhuillier personally without the official participation
of Amancor, Inc.

and

3.14. Since the board of Amancor, Inc. did not formally ratify nor acceded (sic) to the personal agreement
between plaintiff and Lhuillier through no fault of the latter, the corporation is not bound and the actionable
documents are, at most, unenforceable insofar as the subject claim of plaintiff is concerned.

ISSUE AND RATIO DECIDENDI

Issue
W/N Lhuillier admitted
personal liability
Ratio
No, Lhuiller did not admit personal liability
As per Sec 4 of Rule 129, the GENERAL RULE that a judicial admission is
conclusive upon the party making it and does not require proof admits of two
EXCEPTIONS: when it is shown that (1) the admission was made through
palpable mistake, or (2) no such admission was in fact made.

The latter exception allows one to contradict an admission by denying that he

made such an admission.

For instance, if a party invokes an "admission" by an adverse party, but cites

the admission "out of context", then the one making the admission may show
that he made no "such" admission, or that his admission was taken out of
context.

This may be interpreted as to mean "not in the sense in which the admission
is made to appear." That is the reason for the modifier "such". (Emphasis
supplied; citing Paras, in turn citing the Minutes of the Revision Committee)

ITC, Atillo appears to have taken the admissions made by Lhuillier in his
Answer "out of context" and is seemingly misleading this Court.

3.11 of Lhuiller’s Answer refers to the fact that when Lhuillier invested in
AMANCOR, only Atillo and Lhuillier dealt with each other. It is more than
obvious that Paragraph 3.11 has nothing to do with the obligation of Amancor
to Atillo. In fact, contrary to Atillo’s allegations, Lhuillier had categorically
denied personal liability in the succeeding paragraphs (3.12 & 3.13) of his
Answer:
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3D

3.12. As evident in the wordings… of the Actionable Memorandum of

Agreement… and… of the Actionable Supplemental Memorandum of
Agreement…, Lhuillier did not engage to personally pay the corporate loans
secured by plaintiff's property as to release the property to plaintiff…

3.13. At most, therefore, Lhuillier… only agreed, for the corporation to repay
plaintiff the amount of the pre-terminated corporate loans with the bank and,
pending improvement of Amancor's finances, for said corporation to pay
interest at prevailing bank rate…

SC:

(1) In the Pre-trial, both parties submitted for resolution the issue of WON
Lhuillier is personally liable for the obligation. This indicates that Atillo was
well aware that Lhuillier never admitted personal liability.

(2) Atillo offset the amount due to him with his accounts with Amancor. This
indicates that Atillo recognized Amancor and not Lhuillier as the obligor

Granting arguendo that Lhuillier admitted personal liability in his Answer,

such admission is still not conclusive upon him.

Recall the case of Gardner v CA which allowed a party's testimony in open

court to override admissions he made in his answer:

The fact that the allegations made by Ariosto Santos in his pleadings and in
his declarations in open court differed will not militate against the findings
herein made nor support the reversal by respondent court. As a general rule,
facts alleged in a party's pleading are deemed admissions of that party and
are binding upon it, but this is not an absolute and inflexible rule. An answer
is a mere statement of fact which the party filing it expects to prove, but it is
not evidence. As Ariosto Santos himself, in open court, had repudiated the
defenses he raised in his Answer and against his own interest, his testimony is
deserving of weight and credence.

In spite of the presence of judicial admissions in a party's pleading, the trial

court is still given leeway to consider other evidence presented.

RULING

ACCORDINGLY, finding no reversible error, the decision appealed from is hereby AFFIRMED and this petition is
DENIED. SO ORDERED.