G.R. No. 154430 ; June 16, 2006
Spouses Jose N. Binarao and Preciosa Binarao, Petitioners, vs. Plus Builders, Inc., Respondent.

FACTS

Petitioners Spouses Binarao purchased a house and lot from respondent Plus Builders, Inc. in 1990. They executed an Affidavit of Undertaking on Equity agreeing to pay a specific sum but subsequently failed to fully comply. After a partial payment in 1998, a balance of P65,571.22 remained. Respondent sent demand letters and, upon petitioners’ refusal to pay, filed a complaint for a sum of money before the Metropolitan Trial Court (MTC). The MTC ruled in favor of respondent, ordering petitioners to pay the balance with interest, liquidated damages, and attorney’s fees. This decision was affirmed by the Regional Trial Court (RTC) on appeal.
The RTC held that petitioners, in their answer to the complaint, did not specifically deny the material allegation in paragraph 4 thereof, which stated the partial payment made, the outstanding balance, and the agreed payment plan. Petitioners filed a motion for reconsideration, which was denied. The Court of Appeals subsequently affirmed the RTC decision, applying the rules on judicial admissions.

ISSUE

Whether petitioners, through their answer, made a judicial admission of their liability for the claimed balance.

RULING

Yes. The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. The legal logic centers on the application of the rules on judicial admissions under Section 4, Rule 129 of the Rules of Court. A judicial admission, made by a party in the course of proceedings in the same case, is conclusive and does not require proof. It can only be contradicted by showing it was made through a palpable mistake or that no such admission was made.
In their answer, petitioners explicitly admitted paragraph 4 of the complaint. The Court, agreeing with the appellate court’s analysis, found that this paragraph contained three material facts: (1) the payment of P20,000.00; (2) the existence of an unpaid balance of P65,571.22; and (3) that this balance was payable under an agreed plan. While petitioners later qualified that they did not sign a payment plan, this qualification did not constitute a specific denial of the core fact of the indebtedness itself. By admitting the paragraph, petitioners conclusively admitted the outstanding obligation. They failed to demonstrate any palpable mistake in making this admission. Consequently, they were bound by their own judicial admission, which rendered further contest on the existence of the debt untenable. The lower courts correctly held them liable based on this admission.