Case Summary (G.R. No. 226587)
Factual Background
In January 2002 the respondents, then residing in the United States, expressed to petitioner their desire to acquire real property in Metro Manila and, upon petitioner’s information that a parcel in Las Piñas would be auctioned by the DOLE Sheriff’s Office, asked petitioner to participate in the auction on their behalf. On January 30, 2002 respondents remitted US$60,000 (P3,000,000) to petitioner’s bank account to purchase the Las Piñas property. When the respondents later received photocopies of Transfer Certificates of Title for properties in Manila and Parañaque, petitioner explained that the Las Piñas auction was cancelled because of a third‑party claim and that the judgment creditor was offering other levied properties; petitioner had her friend participate in bidding and those properties were sold to the friend. Upon respondents’ return in July 2002 they declined the Las Piñas property and demanded return of the P3,000,000; petitioner acknowledged receipt and promised to return the amount by September 14, 2002, but did not do so and conditioned return on sale of the Manila and Parañaque properties.
Procedural History
Respondents filed suit for collection of sum of money, moral damages, and attorney’s fees on March 6, 2006 (Civil Case No. 7720, RTC, Kalibo, Aklan, Branch 6). The RTC dismissed the complaint for failure of plaintiffs to present a preponderance of evidence. On appeal the Court of Appeals reversed and ordered petitioner to pay P3,000,000 with interest at 6% per annum from default until finality and thereafter until full satisfaction. Petitioner sought reconsideration before the CA, which was denied. Petitioner then filed a petition for review on certiorari to the Supreme Court.
Issues Presented
The principal issues framed and addressed were: (1) whether petitioner’s statements in her Answer constitute judicial admissions binding on her; (2) whether petitioner should return the P3,000,000 she received for the purchase of the Las Piñas property; and (3) whether petitioner is liable for interest on the amount due and, if so, from what date and at what rate. Secondary assignments raised whether the CA improperly considered inadmissible evidence and whether unjust enrichment was improperly introduced on appeal.
RTC Ruling (Trial Court)
The RTC applied the Best Evidence Rule and ruled that plaintiffs’ documentary evidence—specifically uncertified photocopies of bank transfers and the alleged acknowledgment receipt/promissory note—were inadmissible. The court found plaintiffs failed to prove loss of originals and that the contested private document lacked notarization and witnesses to prove petitioner’s signature. For failure to present preponderant evidence, the RTC dismissed the complaint and the counterclaim.
CA Ruling (Appellate Court)
The Court of Appeals found that petitioner’s admission in her Answer that P3,000,000 had been transmitted to her account operated as a judicial admission, dispensing with the need for proof of receipt. The CA concluded petitioner was legally bound to return the money because the agreed purchase of the Las Piñas property did not materialize and petitioner used the funds for other properties without respondents’ consent. The CA ordered payment of P3,000,000 with 6% interest per annum from default until finality and thereafter until full satisfaction.
Supreme Court Analysis — Judicial Admissions
The Supreme Court confirmed the legal doctrine on judicial admissions: an admission in the course of proceedings in the same case dispenses with proof of the matter admitted and is conclusive against the pleader unless shown to have been made through palpable mistake or that no such admission was in fact made. The Court examined petitioner’s Answer and concluded she did not deny receipt of the P3,000,000; rather, she simply denied having induced respondents to remit the money. The Court treated petitioner’s statements that “Plaintiffs may have sent money to defendant” and related passages as admissions of receipt, and found no showing of palpable mistake. Accordingly, the judicial‑admission doctrine bound petitioner and obviated the need for the plaintiffs’ documentary proofs.
Supreme Court Analysis — Implied Agency and Liability to Return Funds
The Court applied Civil Code provisions on agency and ordinary rules of inference to find an implied agency relationship between petitioner and respondents for the purpose of purchasing the Las Piñas property. The elements supporting an implied agency included the respondents’ communication to petitioner about the purchase, the remittance of funds to petitioner’s account for that purpose, petitioner’s enquiries with the DOLE Sheriff’s Office, and petitioner’s active efforts to effect the purchase. The Court concluded petitioner exceeded the scope of her authority by participating in auctions for substitute properties (Manila and Parañaque) without obtaining respondents’ prior approval and by later conditioning return of the remitted funds on her successful sale of those properties. Petitioner’s failure to return the P3,000,000 upon cancellation of the Las Piñas auction was a breach of her principal obligation and entitled respondents to recovery of the amount.
Supreme Court Analysis — Admissibility and Best Evidence Rule
While the RTC excluded certain documentary proofs for lack of originals under the Best Evidence Rule (Rule 129, Sec. 4), the Supreme Court did not rely on those excluded documents because petitioner’s judicial admission rendered those documents unnecessary to establish receipt of the funds. The Court therefore resolved the controversy on the basis of the admission and the inferred agency relationship rather than on the excluded documentary evidence.
Supreme Court Analysis — Unjust Enrichment
Although one assignment of error complained that the CA improperly entertained unjust enrichment raised for the first time on appeal and applied the principle, the Supreme Court grounded its ruling on the existence of an implied agency and petitioner’s breach of the agency obligation to return the remitted funds. The Court’s disposition focused on the contractual/agency relationship and failure to perform rather than on a distinct unjust‑enrichment remedy as a separate theory introduced for the first time on appeal.
Supreme Court Analysis — Interest (Monetary vs. Compensatory)
The Court distinguished monetary interest (which requires an express written stipulation under Article 1956 of the Civil Code) from compensatory interest (interest imposed by law or courts as indemnity for damages due to delay or breach). Citing precedent, the Court explained that when an obligation consists in the payment of a sum of money and the debtor incurs delay, legal/compensa
Case Syllabus (G.R. No. 226587)
Facts and Antecedents
- In January 2002, respondents Gordon R. Niamatali and Amy V. Niamatali, then residing in the United States, informed petitioner Donabelle Gonzales‑Saldana (then a Department of Labor and Employment employee) of their intention to acquire real properties in Metro Manila.
- Petitioner advised them that a parcel of land in Las Piñas City would be sold at a public auction conducted by the DOLE Sheriff’s Office and agreed to participate in the auction on their behalf.
- On January 30, 2002, respondents remitted US$60,000.00 (P3,000,000.00) to petitioner’s bank account for the purchase of the Las Piñas property.
- In March 2002 petitioner sent respondents photocopies of Transfer Certificates of Title Nos. 105904 and 223102 covering properties located in Manila and Parañaque, contrary to their agreement to purchase the Las Piñas property.
- Petitioner explained the Las Piñas auction did not push through due to a third‑party claim, and that the judgment creditor agreed to sell the Parañaque and Manila properties which were also levied on execution.
- In July 2002, upon their return to the Philippines, respondents were brought by petitioner to the Las Piñas property but found it locked with a signboard reading “Future Home of Lutheran School and Community Center.”
- Respondents informed petitioner they were no longer interested in acquiring the Las Piñas property and demanded return of the P3,000,000.00; petitioner acceded and acknowledged receipt of the P3,000,000.00 in a letter, promising to return it on or before September 14, 2002.
- Petitioner’s account: the Las Piñas bidding was cancelled due to a third‑party claim; DOLE Sheriff’s Office informed her other properties of the losing party would be auctioned; she invited friend Alninia L. Austria to bid for Manila and Parañaque properties; Austria won both auctions; respondents later indicated they no longer wanted Las Piñas and petitioner said she would return the money after selling the Manila and Parañaque properties.
- Respondents made several demands but petitioner failed to return the P3,000,000.00.
Procedural History
- March 6, 2006: Respondents filed a complaint for collection of sum of money, moral damages, and attorney’s fees (Civil Case No. 7720, RTC Kalibo, Aklan, Branch 6).
- March 11, 2014: The Regional Trial Court rendered a Decision dismissing the complaint for failure of plaintiffs to present preponderance of evidence; the RTC excluded respondents’ documentary evidence (uncertified photocopies of bank transfer and alleged promissory note) for noncompliance with the Best Evidence Rule and lack of notarization/witnesses.
- Respondents appealed to the Court of Appeals (CA) in CA‑G.R. CV No. 05172.
- March 31, 2016: The CA reversed and set aside the RTC Decision, treating petitioner’s admission in her Answer as a judicial admission that she received P3,000,000.00 and ordering petitioner to pay respondents P3,000,000.00 with interest at 6% per annum from default until finality and thereafter until full satisfaction.
- August 10, 2016: The CA denied petitioner’s motion for reconsideration.
- Petitioner filed a petition for review on certiorari to the Supreme Court, assailing the CA Decision and Resolution.
Issues Presented to the Supreme Court
- Whether statements in petitioner’s Answer constitute judicial admissions binding on petitioner.
- Whether petitioner should return the P3,000,000.00 she received from respondents for the purchase of the Las Piñas property.
- Whether petitioner is liable for payment of interest on the amount due and, if so, the proper rate and accrual period.
- Whether the CA erred in considering inadmissible evidence, applying rules on judicial admission, admitting the issue of unjust enrichment raised for the first time on appeal, and applying the principle of unjust enrichment.
- Whether interest was properly awarded by the CA.
Parties’ Contentions (as presented to the Court)
- Petitioner:
- Allegations in her Answer are defenses, not admissions; they show the complaint states no cause of action.
- The purported admission about receipt of P3,000,000.00 is taken out of context and pertains to borrowed money, not that she received and must return it.
- Obligation to return the money is demandable only upon sale of the Manila and Parañaque properties; unjust enrichment principle not applicable.
- No interest is due because the transaction was not a contract of loan and there was no agreement for payment of interest reduced in writing.
- Respondents:
- Petitioner should return P3,000,000.00 because she had not informed respondents of the status of the Las Piñas property since 2002.
- A complaint for recovery of money is proper even if the contract was not a contract of loan.
- Legal interest must be imposed because petitioner incurred delay.
Ruling of the Regional Trial Court (March 11, 2014)
- The RTC held respondents’ documentary evidence (uncertified photocopies of bank transfer and promissory note/acknowledgment receipt) inadmissible for failure to comply with the Best Evidence Rule and for lack of notarization/witness, respectively.
- Noted respondent Amy testified she could have secured the original bank document but did not.
- Dismissed the complaint for failure of plaintiffs to present preponderance of evidence; counterclai