Title
Silot, Jr. vs. De la Rosa
Case
G.R. No. 159240
Decision Date
Feb 4, 2008
Construction contract dispute: overpayment of P191,525.02 confirmed by judicial admission; Supreme Court upheld return of excess and attorney’s fees.
contract dispute
overpayment
construction project
A

Case Summary (G.R. No. 159240)

Petitioner

Gregorio Silot, Jr. — contractor who supplied labor and claimed an unpaid balance for additional works; he also sought to defeat respondent’s claim for overpayment by disputing a counsel-made admission and arguing lack of authority for counsel to stipulate.

Respondent

Estrella de la Rosa — owner who paid 33% of materials as agreed and sued to recover an alleged overpayment of P191,525.02; relied on counsel admissions and pleaded that a client is bound by counsel’s admissions and negligence.

Key Dates and Procedural Posture

  • Contract entered January 19, 1996; structure turned over February 1997.
  • Lower court (RTC, Branch 61, Naga City) issued a Joint Decision ordering return of P191,525.02, awarding attorney’s fees and nominal damages; the Court of Appeals affirmed with modification (deleting nominal damages, reducing attorney’s fees to P20,000).
  • The Supreme Court review denied the petition, affirming the Court of Appeals’ judgment. (Decision applied and reviewed under the 1987 Constitution as the operative charter for judicial authority.)

Applicable Law

  • Rule 129, Section 4, Rules of Court: judicial admissions; an admission made by a party in the course of the proceedings does not require proof and may be contradicted only by showing palpable mistake or that no such admission was made.
  • Relevant jurisprudence cited by the Court: People v. Hernandez (on counsel-made stipulations as judicial admissions), Toh v. Court of Appeals (on dispensing with a witness based on opposing counsel’s admission), and other authorities recognizing that an attorney of record, as agent for the party during trial, may make admissions that bind the client. The Court also noted the limited exception that gross negligence of counsel which deprives a client of his day in court may relieve the client from the effect of counsel’s errors.

Factual Background

The parties agreed that respondent would pay 33% of total materials. Actual total cost of materials: P2,504,469.65; 33% = P826,474.98. Respondent had paid P1,018,000.00, resulting in an alleged overpayment of P191,525.02. After respondent demanded return, Silot refused; respondent sued for recovery. Silot counterclaimed for an alleged unpaid balance of P273,872.40 based on his computation of labor and materials for additional works. During trial, counsel for respondent offered the testimony of Ariel Goingo summarizing relevant facts; counsel for petitioner, Atty. San Jose, admitted the substance of the proposed testimony and agreed to dispense with the witness’ presentation in open court.

Procedural History

The trial court consolidated both actions, dismissed Silot’s counterclaim, and ordered Silot to return P191,525.02, awarded attorney’s fees of P100,000 and nominal damages of P50,000. On appeal, the Court of Appeals affirmed but deleted the nominal damages and reduced attorney’s fees to P20,000. Petitioner sought review in the Supreme Court, contesting (1) that his counsel’s admission was not a judicial admission of the evidence and (2) that the appellate court erred in ordering return of P191,525.02.

Issues Presented

  1. Whether the oral admission by petitioner’s counsel regarding the contents of the proposed witness’ testimony constituted a judicial admission binding on petitioner.
  2. Whether, on the merits and in light of that admission, the appellate court erred in ordering return of the P191,525.02 overpayment.

Parties’ Contentions

  • Petitioner: Counsel only admitted the subject matter (i.e., the topics) of the proposed testimony, not its truth; counsel lacked authority (no special power of attorney) to bind the client by stipulation or to compromise client’s substantive rights without direct client instruction.
  • Respondent: A client is bound by admissions and negligence of counsel; oral stipulations and admissions by counsel in open court are judicial admissions binding on the client unless shown to be the product of palpable mistake or gross negligence depriving the client of his day in court. Respondent cited controlling authorities where judicial admissions were held conclusive.

Legal Principles on Judicial Admissions and Stipulations

  • Admissions made by counsel in open court for the purpose of dispensing with proof are judicial admissions and, under Rule 129, Section 4, need no further proof and cannot be contradicted except on a showing of palpable mistake or that no such admission was made.
  • An attorney of record is the agent of the client for purposes of the trial and has prima facie authority to make relevant admissions by oral or written stipulation. Such admissions bind the client and are conclusive unless successfully attacked on permitted grounds.
  • The narrow exception permitting relief from counsel’s mistakes is where the attorney’s negligence is so gross that it results in the client being deprived of his day in court; ordinary tactical errors or ordinary negligence will not suffice.

Application of Law to the Facts

  • The court reviewed the trial transcript showing that respondent’s counsel offered Goingo’s testimony in summary form and that petitioner’s counsel explicitly answered “We admit that” when the purpose and substance of the testimony were recited. The judge’s inquiry and counsel’s repeated admissions (including an express admission of the P2,504,000 figure) were recorded.
  • Given those unequivocal admissions in open court, the court treated the admitted statements as judicial admissions which dispense with the need for Goingo’s testimony. Petitioner was not deprived of opportunity to be heard: he was present, could have introduced evidence to contradict the admissions, and was given the chance to testify. No palpable mistake or absence
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