Silot, Jr. vs. De la Rosa

An admission made by counsel in open court, for the purpose of dispensing with the presentation of a witness’s testimony, is a judicial admission that conclusively binds the client and requires no further proof; it may be contradicted only by a showing that it was made through palpable mistake or that no such admission was made.

On January 19, 1996, petitioner Gregorio Silot, Jr. and respondent Estrella de la Rosa executed a contract for the construction of a dormitory-apartment building on a lot in Naga City. Silot would supply labor; de la Rosa would pay 33% of the total value of materials purchased. The completed structure was turned over in February 1997, with materials costing ₱2,504,469.65, making de la Rosa’s liability ₱826,474.98. De la Rosa paid a total of ₱1,018,000.00. She demanded return of the excess ₱191,525.02; Silot refused. De la Rosa sued for recovery, and Silot retaliated with his own suit claiming a balance of ₱273,872.40. The two cases were consolidated.

• The Contract and Performance: On January 19, 1996, petitioner Silot and respondent de la Rosa entered into a construction agreement for a dormitory-apartment building. Silot undertook to supply labor; de la Rosa agreed to pay 33% of the total value of materials purchased. Upon completion in February 1997, the total material cost was ₱2,504,469.65, making the agreed 33% share ₱826,474.98. De la Rosa actually paid ₱1,018,000.00—an excess of ₱191,525.02.

• The Dispute: Through her son-in-law, de la Rosa confronted Silot about the overpayment and demanded its return. Silot refused. De la Rosa filed Civil Case No. 97-3750 for recovery. Silot responded by filing Civil Case No. 97-3736, alleging that his total labor amounted to ₱1,281,872.40 against which he received only ₱1,008,000.00, leaving an unpaid balance of ₱273,872.40. The cases were consolidated.

• The Judicial Admission: At trial, de la Rosa’s counsel offered the testimony of witness Ariel Goingo to establish that the 33% consideration covered all material supplies including additional works, that Silot was paid for all works and materials, that the total material cost was ₱2,504,469.65, that de la Rosa paid ₱1,018,000.00, resulting in an overpayment of ₱191,525.02, and that Silot never demanded any balance from de la Rosa. De la Rosa’s counsel proposed to dispense with Goingo’s testimony if the purpose was admitted. Silot’s counsel, Atty. San Jose, twice stated: “We admit that” and “We will admit that,” and when asked by the judge, he confirmed they admit the ₱2,504,000.00 figure.

• The Lower Courts’ Rulings: The RTC gave weight to the admission and ruled for de la Rosa, dismissing Silot’s case and ordering him to return the overpayment with attorney’s fees and nominal damages. The Court of Appeals affirmed the result but deleted nominal damages and reduced attorney’s fees to ₱20,000.00, finding the principal amount sufficiently established by the admission.

• Nature of Counsel’s Admission: Petitioner contended that Atty. San Jose merely admitted the purpose for which Goingo would testify, not the truth or veracity of his proposed testimony. He argued that the admission was not an acknowledgment of the facts themselves but only of the offer of proof.

• Lack of Special Authority: Petitioner maintained that Atty. San Jose lacked a special power of attorney to enter into stipulations or to compromise his client’s substantive right without direct intervention, and therefore the admission could not bind him.

• Claim for Unpaid Labor: Petitioner asserted that he had provided labor worth ₱1,281,872.40, including painting, electrical, and other additional works, against which only ₱1,008,000.00 was paid, leaving a balance of ₱273,872.40. He contended that allowing de la Rosa’s claim would constitute unjust enrichment at his expense.

• Binding Effect of Counsel’s Admissions: Respondent countered that a client is bound by the admissions and even the negligence of his counsel. She invoked multiple precedents establishing that judicial admissions are conclusive upon the party making them and may not be contradicted absent palpable mistake. She also argued that the exception for gross negligence depriving a client of his day in court did not apply, as Silot had been given every opportunity to present evidence and testify.

• Judicial Admission: Whether the statement of petitioner’s counsel admitting the purpose of the proposed testimony constituted a judicial admission of the facts contained therein, binding upon petitioner.

• Return of Overpayment: Whether the appellate court erred in ordering petitioner to return ₱191,525.02 to respondent as overpayment.

• Judicial Admission: The admission by Atty. San Jose was a judicial admission of the facts stated in the offer of testimony, not merely an acknowledgment of the purpose. The counsel expressly admitted the content of the proposed testimony to dispense with the witness’s presentation. Under Rule 129, Section 4 of the Rules of Court and prevailing jurisprudence, admissions made for the purpose of dispensing with proof are judicial admissions that bind the client, are conclusive, and require no further evidence. They may be contradicted only upon a showing of palpable mistake or that no admission was made—neither of which was shown. A client is generally bound by the acts of his counsel, and the exception of gross negligence depriving a party of his day in court did not apply because Silot was heard, testified, and could have introduced controverting evidence but did not.

• Return of Overpayment: The appellate court did not err. The admitted facts established that the total material cost was ₱2,504,469.65, 33% of which was ₱826,474.98, and that de la Rosa paid ₱1,018,000.00, yielding an overpayment of ₱191,525.02. Petitioner’s claim of unpaid labor was belied by his own counsel’s admission that Silot was paid for all works and materials and never demanded a balance. The order to return the overpayment with reduced attorney’s fees was thus proper.

• Judicial Admissions by Counsel — A verbal admission made by counsel in open court for the purpose of dispensing with the proof of some fact is a judicial admission. It binds the client, does not require further proof, and may be contradicted only by showing that it was made through palpable mistake or that no such admission was made (Rule 129, Sec. 4, Rules of Court; People v. Hernandez, G.R. No. 108028; Toh v. Court of Appeals, G.R. No. 140274). The conformity or signature of the client is unnecessary because counsel, as agent for the purpose of trial, has prima facie authority to make such admissions.

• Client Bound by Counsel’s Acts — Clients are bound by the admissions, stipulations, and even the negligence of their counsel. The only exception is when the negligence is so gross as to deprive the client of his day in court, which requires that the party was denied an opportunity to be heard or present evidence. (Juani v. Alarcon, G.R. No. 166849; Uy v. Adriano, G.R. No. 159098.)

• “A stipulation of facts entered into by the prosecution and defense counsel during trial in open court is automatically reduced into writing and contained in the official transcript of the proceedings had in court. The conformity of the accused in the form of his signature affixed thereto is unnecessary in view of the fact that: ‘[…] an attorney who is employed to manage a party's conduct of a lawsuit […] has prima facie authority to make relevant admissions by pleadings, by oral or written stipulation, […] which unless allowed to be withdrawn are conclusive.’” (Quoting People v. Hernandez)

• “The Court sees no cogent reason why the said witness should be examined any further since his testimony as summarized in the offer made by counsel was expressly admitted by opposing counsel. With the said admission, the testimony of said witness is uncontroverted and even admitted as fact by opposing counsel.” (Quoting Toh v. Court of Appeals)

• The exchange during trial: Atty. Terbio: “… He will testify that … de la Rosa paid the total amount of ₱1,018,000.00, and therefore, there is an excess payment of ₱191,525.00 … now, if the counsel wish to admit this.”
  Atty. San Jose: “We admit that.” … “We will admit that.”

• People v. Hernandez, G.R. No. 108028, July 30, 1996 — Followed. Established that admissions made to dispense with proof are binding judicial admissions; the client’s signature is not required because counsel has prima facie authority to make them.

• Toh v. Court of Appeals, G.R. No. 140274, November 15, 2000 — Followed. Held that when opposing counsel admits the summarized testimony of a witness, that testimony becomes uncontroverted and is admitted as fact.

• Ongson v. People, G.R. No. 156169, August 12, 2005; Republic v. Sarabia, G.R. No. 157847, August 25, 2005; People v. Genosa, G.R. No. 135981, January 15, 2004; Arroyo, Jr. v. Taduran, G.R. No. 147012, January 29, 2004; Carandang v. Court of Appeals, G.R. No. 85718, April 16, 1991; People v. Razul, G.R. No. 146470, November 22, 2002; Lim v. Jabalde, G.R. No. 36786, April 17, 1989 — Cited by respondent and acknowledged by the Court as consistently holding that judicial admissions are conclusive upon the party making them and may not be contradicted absent palpable mistake.

• Juani v. Alarcon, G.R. No. 166849, September 5, 2006; Uy v. Adriano, G.R. No. 159098, October 27, 2006 — Cited for the rule that a client is bound by the mistakes of counsel, with the sole exception of gross negligence that deprives the client of a day in court.

• Rule 129, Section 4, Rules of Court — “Judicial admissions. – An admission, verbal or written, made by a party in the course of the proceedings in the same case, does not require proof. The admission may be contradicted only by showing that it was made through palpable mistake or that no such admission was made.” The Court applied this provision, holding that Atty. San Jose’s verbal admission in open court dispensed with proof of the witness’s testimony, and petitioner could not later contradict it without demonstrating palpable mistake, which he failed to do.

Carpio, Carpio-Morales, Tinga, Velasco, Jr., JJ., concur.