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466 Phil. 173


[ G.R. No. 147012, January 29, 2004 ]




Before us is a petition for review of the decision[1] dated January 30, 2001 of the Court of Appeals, affirming the decision[2] dated March 30, 1998 of the Regional Trial Court, Branch 138, Makati City, in Civil Case No. 92-2822, for specific performance, reconveyance and damages.

The trial court dismissed the complaint for reconveyance of title filed by respondent herein but nevertheless ordered petitioners to indemnify him in the amount of P500,000 with legal interest computed from October 23, 1989 until full payment is made.

The facts follow.

Respondent Eduardo Taduran and petitioner Cristino Arroyo, Jr. were cousins. In 1988, respondent and petitioner Cristino Arroyo, Jr. entered into a verbal agreement to form a corporation and to acquire a suitable office for this purpose. Pursuant to the agreement, petitioner Cristino Arroyo, Jr. purchased from Cityland Development Corporation a condominium unit for P348,718.30. The amount money used to purchase the condominium unit was borrowed by petitioner Cristino Arroyo, Jr. from the Commercial Bank of Manila (now Bank of Commerce) and was guaranteed by the time deposit of respondent Taduran with in the same bank. When the loan matured, the proceeds of the time deposit amounting to P500,000 was applied by respondent Taduran in as payment of the loan. Title to the condominium unit in the name of petitioner Cristino Arroyo, Jr., married to Sandra Arroyo (his co-petitioner in the present case), was subsequently released by Cityland to said spouses.

Petitioners, however, failed to pay certain obligations to Cityland Development Corporation which resulted in the extrajudicial foreclosure of the subject condominium unit. The property was eventually redeemed by them (petitioners Arroyo).

Meanwhile Taduran discovered that petitioners had been enjoying the use of the subject property. Thus, he demanded from them the delivery of the title and other documents, and transfer of title in to his name pursuant to their verbal agreement. When petitioners Arroyo refused, Taduran filed a complaint in the Makati RTC, praying that petitioners petitioners be ordered compelled to deliver and reconvey the title to the subject property to him and that they be adjudged liable for actual, moral and exemplary damages in the amount of P500,000 plus the costs of suit and attorney’s fees. Respondent claimed that petitioner Cristino Arroyo, Jr. was his a mere agent tasked to look for a condominium unit to purchase.

Petitioners Arroyo denied the existence of agency between respondent Taduran and petitioner Cristino Arroyo, Jr. and claimed ownership over the subject property. On March 30, 1998, the trial court rendered a decision:
The Court does not find the evidence presented by plaintiff sufficient to establish agency. As a contractual relationship agency should be proven by clear, convincing and highly credible evidence. In the present case, the testimony of the plaintiff is wanting with respect to the material details of the extent and authority of the agent. As a matter of fact, during his testimony on direct examination, plaintiff did not even mention anything about the claimed agency agreement. A circumstance which will aid the Court in determining the ownership of the condominium unit could be the source of the P500,000.00 but from Exhibit “A” of the plaintiff, it appears that the loan was that of defendant Arroyo, though it was secured by the time deposit of the plaintiff. The situation therefore is – a loan was secured by defendant Arroyo from Commercial Bank of Manila, secured by the time deposit of plaintiff. The proceeds of the loan was used to pay for the price of the condominium unit. Title was not then transferred to defendant Arroyo. The loan was not paid and at the instruction of plaintiff, Commercial Bank of Manila applied his time deposit in full payment of the loan.

From the foregoing, and absent any convincing evidence of agency or trust, reconveyance cannot be ordered because plaintiff failed to establish title over the condominium unit. Title is with defendant Arroyo because he obtained the loan. The source of payment is immaterial, though it gives plaintiff right to indemnification. This fact defendant Arroyo admits.

The Court finds the evidence of the plaintiff insufficient to establish his cause of action and entitlement to the relief prayed for. On the other hand, the Court finds him entitled to indemnification from defendant Arroyo because his time deposit was applied to the loan obligation of the defendant Arroyo.[3]
Petitioners appealed to the Court of Appeals the arguing that the trial court decision appeared to be a “contradiction in terms,” that is, despite the finding that there was no agency and that reconveyance could not be ordered due to the failure of respondent to establish its his title to the property, it, nonetheless, ordered indemnification in the amount of P500,000. The Court of Appeals disagreed with petitioners and affirmed the trial court decision:
Nevertheless, the appellants have admitted the fact that there is an obligation on their part to pay for the time deposit proceeds of appellee which was applied to the payment of the bank loan earlier obtained by appellant Cristino Arroyo, Jr. in his name. On cross-examination, appellant Cristino Arroyo, Jr. was asked why despite having received the proceeds of the sale of the condominium unit in favor of Josie G. Lim in the sum of P800,000.00, he did not even return or give the appellee an amount representing the time deposit proceeds of appellee which was used to pay his loan with the bank

x x x         x x x         x x x

In view of the above admission by appellant Cristino Arroyo, Jr. of his obligation to pay the appellee of his time deposit proceeds which was used to pay off appellant’s loan with the bank, the trial court correctly ruled that while reconveyance of the subject condominium unit may no longer be ordered, the appellee is entitled to be indemnified by the appellants to the extent of the amount of his time deposit applied to the payment of appellants’ loan.[4]
Hence, this petition. Petitioners contend that neither the trial court nor the appellate court could, under the law, order that respondent be indemnified in the amount of P500,000 as it was not prayed for as an alternative remedy in the complaint. According to them, the complaint filed in the trial court was for “specific performance, reconveyance and damages.” The damages were separate and distinct from the admitted indebtedness in the amount of P500,000. Petitioners claims that “the damages sought by respondent [were] in relation to the alleged agency which, as the court a quo itself (said) in its decision, was not established by respondent.” Thus, they should not have been required to pay respondent in connection with the a non-existent agency. Even assuming, that respondent alleged or prayed for indemnification, petitioners assert that no proof was presented by respondent to show that he was entitled to indemnity. Such claim must be made in another forum as the trial court had no jurisdiction to award indemnification to respondent.

We deny the petition.

Respondent is entitled to recover P500,000 from petitioners Arroyo even in the absence of any prayer therefor. This Court has ruled that it is the material allegations of fact in the complaint, not the legal conclusion made therein or the prayer, that determines the relief to which the plaintiff is entitled. It is the allegations of in the pleading which determine the nature of the action and the Court shall grant relief warranted by the allegations and the proof even if no such relief is prayed for.[5] Thus, although the complaint was for specific performance, reconveyance and damages, the factual allegations contained therein likewise seek sought the return of the amount of P500,000 which was paid by satisfy petitioners Arroyo’s indebtedness to the bank, which indebtedness they were liable to pay in any case. Both the trial court and the Court of Appeals found sufficient factual and evidentiary bases to order the payment of P500,000. We see no reason to change this finding.

In any event, the prayer in respondent’s complaint for “other reliefs equitable and just in the premises”[6] justifieds the grant of a relief not otherwise specifically prayed for.[7]

Furthermore, petitioners Arroyo’s admission of their indebtedness to respondent during the trial and in their petition before us is conclusive. Such admission is binding on them and no amount of contradictory evidence can offset it.[8] Judicial admissions, verbal or written, made by the parties in the pleadings or in the course of the trial or other proceedings in the same case, are conclusive on them,. No evidence being is required needed to prove the same and it cannot be contradicted unless it is shown to have been made through palpable mistake or that no such admission was made.[9] The records does not show any attempt on the part of petitioners to contradict their judicial admission, either on the ground of palpable mistake or by denying that they ever made such admission. Instead, petitioners specifically stated in their petition that they were indeed indebted to respondent in the amount of P500,000. They categorically declared:
“(p)ursuant to the dictum that no one should be unjustly benefited (sic) or enriched at the expense of another, Arroyo, Jr. admitted having an obligation to pay respondent. The latter can recover whatever Arroyo, Jr. may owe him, pursuant to Art. 1236 (second par.) of the Civil Code, but the recovery should certainly be done in the proper manner, in the proper case, and in another forum.”[10]
Such admission required no further proof.To require respondent to file a separate case to recover the P500,000 in a different court and in another proceeding will only result in a protracted litigation. This is inconsistent with the orderly and efficient administration of justice.

WHEREFORE, the petition is hereby DENIED. The assailed decision of the Court of Appeals, dated January 30, 2001, is AFFIRMED in toto.


Vitug, (Chairman), Sandoval-Gutierrez, and Carpio-Morales, JJ., concur.

[1] Penned by Associate Justice Martin S. Villarama, Jr. and concurred in by Associate Justices Conrado M. Vasquez, Jr. and Perlita J. Tria Tirona.

[2] Penned by Judge Sixto Marella, Jr.

[3] Rollo, p. 36.

[4] Rollo, pp. 25-26.

[5] Banco Filipino Savings and Mortgage Bank vs. Court of Appeals, 332 SCRA 241 [2000]; see also Baguioro vs. Barrios, 77 Phil. 120 [1946]; Eugenio, Sr. vs. Velez, 185 SCRA 425 [1990]..

[6] Rollo, p. 29.

[7] Schenlcer vs. Gemperie, 5 SCRA 1042 [1962].

[8] Philippine American General Insurance Co. Inc. vs. Sweet Lines Inc., 212 SCRA 194 [1992].

[9] Section 4, Rule 129; Atillo III vs. Court of Appeals, 266 SCRA 596 [1997]; Garcia vs. Court of Appeals, 258 SCRA 446 [1996].

[10] Rollo, pp. 14-15.

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