Case Summary (G.R. No. 159240)
Factual Background
The parties contracted on January 19, 1996 for the construction of a dormitory-apartment on Lot 1-A-9-D, Bagumbayan Sur, Naga City, under an agreement that petitioner would supply labor and respondent would pay thirty-three percent of the total value of materials purchased. Upon turnover in February 1997, the total cost of materials was P2,504,469.65, of which thirty-three percent equaled P826,474.98. Petitioner demanded P1,018,000.00 from respondent, an amount P191,525.02 in excess of the thirty-three percent share alleged by respondent. Respondent confronted petitioner through her son-in-law, and petitioner refused to return the alleged overpayment. Respondent filed a suit to recover the excess; petitioner instituted a retaliatory action claiming an unpaid balance of P273,872.40 arising from an asserted entitlement to P1,281,872.40 and receipt of only P1,008,000.00. The trial court consolidated the two actions.
Trial Court Proceedings
During trial counsel for respondent offered the testimony of Ariel Goingo and summarized the witness’s expected testimony, including that all materials for additional works were accounted for, that the total materials cost was P2,504,469.65, that thirty-three percent thereof was P826,474.98, that respondent paid P1,018,000.00, and that there was an excess payment of P191,525.02. Counsel for petitioner, Atty. San Jose, orally admitted the stated purpose and content of the proposed testimony and dispensed with the witness’s presentation. The RTC rendered a joint decision dated May 24, 2000 dismissing Civil Case No. 97-3736 for lack of merit and ordering petitioner in Civil Case No. 97-3750 to return P191,525.02 to respondent, to pay P100,000.00 as attorneys fees, and P50,000.00 as nominal damages.
Court of Appeals Decision
On appeal the Court of Appeals affirmed the RTC’s factual finding that respondent had overpaid petitioner and the order to return P191,525.02, but modified the award by deleting the grant of nominal damages and reducing attorneys fees to P20,000.00. The appellate court reasoned that petitioner’s counsel had made an oral admission in open court dispensing with Goingo’s testimony and that such admission constituted a judicial admission binding upon the client.
Issues Presented to the Supreme Court
Petitioner raised two principal errors for review: (1) that the Court of Appeals erred in construing counsel Atty. San Jose’s statements as a judicial admission of respondent’s evidence; and (2) that the appellate court erred in ordering petitioner to return P191,525.02 and in awarding P20,000.00 as attorneys fees.
Petitioner’s Contentions
Petitioner argued that his counsel merely admitted the subject matter of the proposed testimony and did not concede its truth or veracity. Petitioner further contended that counsel had no special power of attorney to make stipulations that would compromise petitioner’s rights without petitioner’s direct authorization.
Respondent’s Contentions
Respondent maintained that a client is bound by his counsel’s admissions and by counsel’s negligence, subject only to narrow exceptions. She cited authorities holding that admissions in pleadings or made by counsel in court are conclusive absent a showing that they were made through palpable mistake, and she urged that the oral admission dispensing with Goingo’s testimony bound petitioner.
Supreme Court’s Analysis on Judicial Admissions
The Court examined the trial transcript and found that Atty. San Jose clearly admitted, in open court, the content of Goingo’s proposed testimony and thereby dispensed with the witness. The Court applied the principle that judicial admissions made by counsel in the course of trial and entered on the record are binding on the client, relying on the Court’s prior discussion in People v. Hernandez and on Rule 129, Section 4, Rules of Court, which provides that an admission made in the course of proceedings does not require proof and may be contradicted only by showing that it was made through palpable mistake or that no such admission was made. The Court further cited Toh v. Court of Appeals for the proposition that when opposing counsel admits the substance of a proposed witness’s testimony, further examination of that witness is unnecessary because the testimony becomes uncontroverted and effectively admitted as fact.
Court’s Consideration of Deprivation of a Day in Court
The Court addressed petitioner’s contention that counsel lacked authority to make the admission and that petitioner was effectively deprived of his day in court. The Court observed that petitioner was afforded opportunity to be heard, including by appearing in open court and being available to testify, and that petitioner could have introduced evidence to controvert the admission but did not do so. The Court held that the na
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Case Syllabus (G.R. No. 159240)
Parties and Posture
- Gregorio Silot, Jr. was the petitioner in a petition for review from the Court of Appeals decision in CA-G.R. CV No. 68062.
- Estrella de la Rosa was the respondent and plaintiff in the underlying civil actions consolidated by the trial court.
- The petition sought review of the Court of Appeals Decision dated July 9, 2003 that affirmed with modification the RTC Joint Decision dated May 24, 2000 in Civil Case Nos. 97-3736 and 97-3750.
- The RTC had consolidated two actions between the parties, one claiming overpayment and the other claiming underpayment, and tried both causes together.
Key Factual Allegations
- Gregorio Silot, Jr. and Estrella de la Rosa entered into a construction contract on January 19, 1996 for a dormitory-apartment on Lot 1-A-9-D, Bagumbayan Sur, Naga City.
- The parties agreed that Silot would supply labor and that de la Rosa would pay thirty-three percent of the total value of materials purchased for the project.
- Upon turnover in February 1997, the total cost of materials purchased was P2,504,469.65, thirty-three percent of which was P826,474.98.
- Silot demanded payment of P1,018,000.00 from de la Rosa, which respondent alleged amounted to an overpayment of P191,525.02.
- Silot counterclaimed that he was entitled to P1,281,872.40 for labor and related works and that he had received only P1,008,000.00, leaving a claimed balance of P273,872.40.
- During trial, counsel for Silot, Atty. San Jose, agreed to dispense with the testimony of witness Ariel Goingo by admitting the substance of his proposed testimony in open court.
Issues Presented
- Whether the admission by Atty. San Jose of the substance of the proposed testimony of witness Ariel Goingo constituted a judicial admission binding on Gregorio Silot, Jr..
- Whether the Court of Appeals erred in ordering Gregorio Silot, Jr. to return P191,525.02 to Estrella de la Rosa and in awarding attorneys fees of P20,000.00.
Parties' Contentions
- Petitioner argued that Atty. San Jose admitted only the purpose of the witness's testimony and not its truth, and that counsel lacked authority by special power of attorney to make stipulations compromising the client's rights.
- Respondent argued that a client is bound by the admissions and negligence of counsel and cited decisions including Ongson v. People, Republic v. Sarabia, People v. Genosa, Arroyo, Jr. v. Taduran, and Carandang v. Court of Appeals to support the binding effect of counsel's admissions.
- Respondent further argued that stipulations dispensing with