G.R. No. 211113, June 29, 2015
ADERITO Z. YUJUICO, Petitioner, vs. UNITED RESOURCES ASSET MANAGEMENT, INC., ATTY. RICHARD J. NETHERCOTT and ATTY. HONORATO R. MATABAN, Respondents.

FACTS

Petitioner Aderito Z. Yujuico was a stockholder of Strategic Alliance Development Corporation (STRADEC). In 2000, several STRADEC stockholders, including Yujuico, pledged their shares to respondent United Resources Asset Management, Inc. (URAMI) to secure STRADEC’s loan obligations. STRADEC defaulted. On June 18, 2004, respondent Atty. Richard J. Nethercott, claiming to be URAMI’s attorney-in-fact, sent a notice of an impending public auction of the pledged shares set for June 23, 2004. On June 21, 2004, Yujuico filed an injunction complaint (Civil Case No. 70027) before the RTC of Pasig City against URAMI, Atty. Nethercott, and Atty. Honorato R. Mataban (the notary public), arguing the auction was void, citing Atty. Nethercott’s lack of authority. The RTC did not issue a TRO, so the auction proceeded on June 23, 2004, with URAMI as the winning bidder. However, on July 5, 2004, the RTC issued a writ of preliminary injunction, preventing URAMI from appropriating the shares. On April 21, 2006, URAMI filed a motion for leave to file its answer, which was granted. In its original answer, URAMI admitted Atty. Nethercott lacked authority to conduct the auction and argued it could not be held liable. On May 29, 2007, Yujuico filed a motion for summary judgment based on these admissions. Proceedings were suspended by a Supreme Court TRO in another case from July 25, 2007, to October 13, 2008. On January 26, 2009, URAMI changed counsel. Under new counsel, URAMI filed an amended answer on February 23, 2009, without leave of court, which reneged on its prior admissions and claimed Atty. Nethercott was duly authorized. The RTC initially admitted the amended answer but, upon Yujuico’s motion for reconsideration, set aside its order on August 18, 2009, citing lack of leave. URAMI then filed a motion for leave to file the amended answer on September 21, 2009, which the RTC granted on November 10, 2009. Yujuico’s motion for reconsideration was denied on September 27, 2010. Yujuico challenged these RTC orders via a certiorari petition before the Court of Appeals (CA-G.R. SP No. 117431). The CA sustained the RTC’s orders in a Decision dated August 12, 2013, and denied reconsideration on January 29, 2014. Hence, this appeal.

ISSUE

Whether the Court of Appeals erred in sustaining the RTC’s orders granting URAMI leave to file its amended answer, which contradicted its prior judicial admissions in the original answer.

RULING

No, the Court of Appeals did not err. The Supreme Court affirmed the CA’s decision. The rules of procedure allow amendment of pleadings upon leave of court, which should be treated with liberality, especially when filed before trial, to ensure cases are decided on their real facts and to prevent multiplicity of suits. URAMI filed its motion for leave more than two years after its original answer, but the RTC granted it. The Supreme Court found no abuse of discretion, as the amendment was not made in bad faith or to delay proceedings. URAMI presented evidence (a Secretary’s Certificate) to support its new claim of authority for Atty. Nethercott, showing its original admission might have been a palpable mistake. Under Section 4, Rule 129 of the Rules of Court, a judicial admission may be contradicted if shown to be made through palpable mistake. The RTC acted within its discretion in allowing the amendment to serve the ends of justice.