1ST SLIDE

This case has its origin from the Complaint for Unlawful Detainer filed by Rodil Enterprises
against Luciano Tan.

Here, Rodil Enterprises is a lessee of the Ides O’Racca Building which is owned by the Republic
of the Philippines. It subleased various units of the property to members of the Ides O’Racca
Building Tenants Association, Inc. A space thereof, known as Botica Divisoria was subleased to
Luciano Tan.

2ND SLIDE

In the Complaint, Rodil Enterprises alleged Tan bound himself to pay monthly rentals under
a Contract of Sublease. However, Tan unjustifiably and unreasonably refused to pay the
rentals and despite repeated demands, refused to vacate the premises.

In his Answer, Tan insits that he is a legitimate tenant of the governement who owns the
Ides O’Racca Building and not of Rodil Enterprises.

3RD SLIDE

Subsequently, the MeTC issued an Order, recognizing an agreement entered into in open
court by Luciano Tan and Rodil Enterprises wherein Tan agreed to pay Rodil Enterprises the
amount representing rentals. After that, Tan also filed a Motion to Allow Defendant to
Deposit Rentals which was denied by the MeTC.

A Decision was then rendered in favor of Rodil Enterprises. According to the MeTC, although
an offer of compromise is not an admission of any liability, the court cannot overlook the
frank representations by Tan’s counsel of Tan’s liability in the form of rentals, coupled with a
proposal to liquidate.

4TH SLIDE

The issue now is Whether or not Tan’s offer of compromise, made in open court and
reiterated in the Motion he filed, can be taken as an admission of his liability. – YES.

5TH SLIDE

The general rule, pursuant to Section 28 of Rule 130, is that an offer of compromise in a
civil case is not an admission of liability. It is not admissible in evidence against the offeror.
That rule, however, is not absolute.

An exception to the general rule was elucidated by the Supreme Court in the case of Trans-
Pacific Industrial Supplies, Inc. vs Court of Appeals. Here, the Court said that if the party
making the offer admits the existence of an indebtedness combined with a propsal to settle
the claim amicably, then, the admission is admissible to prove such indebtedness.

6TH SLIDE
In the case at bar, recall that Tan did not contest the existence of the sublease. In addition
to that, he also agreed in open court to pay the amount representing unpaid rentals.
According to the MeTC, this is akin to an admission of the existence of an indebtedness. This
admission was then coupled with Tan’s Motion to Allow Defendant to Deopsit Rentals.
Taking all these together, the Court said, that the appreciation of Tan’s admission as an
exception to the general rule of inadmissibility was proper.

Therefore, Tan’s offer of compromise can be taken as an admission of his liability.