Manzano v. Despabiladeras
REITERATIONFacts
The Antecedents: In 1989, respondent Luz Despabiladeras obtained construction materials on credit from petitioner Roger Manzano for a project at the Camarines Sur Polytechnic Colleges (CSPC). Petitioner claims the total value of materials delivered was P307,140.50, with an agreed-upon 8% monthly interest until full payment, which was to be made upon respondent's collection from CSPC. Respondent paid only P130,000.00, exclusive of interest, despite receiving payments from CSPC, leading to the dispute. Procedural History: Petitioner filed a complaint for sum of money with damages before the Regional Trial Court (RTC) of Iriga City, seeking to establish a supplier's lien on respondent's collectible payments from CSPC and demanding payment of the outstanding balance, interest, attorney's fees, and other damages. The RTC granted the motion to establish a supplier's lien and ordered CSPC to retain P201,711.74. After pre-trial, the RTC ordered the parties to stipulate on the costs of materials. Petitioner instead filed a Request for Admission. The RTC later deemed the facts in the Request for Admission as confirmed due to respondent's failure to answer under oath. By Decision of July 7, 1997, the RTC found for petitioner, ordering respondent to pay P87,610.50 plus legal interest and attorney's fees. On appeal, the Court of Appeals set aside the RTC decision and dismissed the complaint, finding that respondent had already fully paid the obligation. This led to the present petition. The Petition: Petitioner seeks review on certiorari under Rule 45 of the Rules of Court, raising the issue of the legal consequence when a request for admission is not answered under oath within the prescribed period. Petitioner argues that respondent's failure to deny under oath the material facts in his Request for Admission means she is deemed to have admitted the delivery and cost of construction materials totaling P314,610.50, with only P130,000.00 paid. Petitioner contends the Court of Appeals erred in considering the pre-trial agreement and the request for admission as referring to the same thing and in allowing respondent to present evidence contradicting her supposed admissions. Petitioner asserts that despite the trial court allowing contradictory evidence, it retained the discretion to disregard it in favor of the admissions made under Rule 26.
Issue(s)
Whether respondent is deemed to have admitted the facts in the Request for Admission due to her failure to file a sworn statement denying them. Whether the Court of Appeals erred in setting aside the trial court's decision based on the interpretation of the pre-trial agreement and the respondent's response to the Request for Admission. Whether the respondent had fully paid her obligation to the petitioner, and the propriety of the award of attorney's fees.
Ruling
The Supreme Court granted the petition, reinstated the RTC decision with modification, ordering respondent to pay petitioner P62,610.50 plus legal interest, and deleted the award of attorney's fees.
Ratio Decidendi
On the legal consequence of failing to answer a Request for Admission: The Court held that Rule 26 of the Rules of Court mandates that a party served with a Request for Admission must serve a sworn statement either denying the matters or setting forth reasons for inability to admit or deny within the designated period. Failure to do so results in the matters being deemed admitted. The Court emphasized that this rule is substantive and cannot be disregarded or amended by a pre-trial order. The RTC correctly applied this rule when it deemed the facts in the Request for Admission as confirmed due to respondent's failure to answer under oath. The Court found that the CA erred in disregarding the clear mandate of Rule 26. On the interpretation of the pre-trial agreement and respondent's response: The Court clarified that while the pre-trial order mentioned an "offer to stipulate" and respondent's "objections or comment," petitioner's subsequent filing of a Request for Admission was a valid procedural remedy under Rule 26. The Court found that the respondent's submission of a list of admitted and disputed items, without a sworn statement, did not constitute compliance with Rule 26. The CA's reliance on the pre-trial agreement to excuse respondent's non-compliance with the Request for Admission was misplaced, as the rules on discovery are mandatory. The Court noted that the trial court, despite allowing respondent to present evidence, still had the discretion to disregard evidence contradicting prior admissions. On the determination of the outstanding balance and attorney's fees: Based on the implied admission that the total value of materials was P314,610.50 and that only P130,000.00 was paid, the initial unpaid balance was P184,610.50. However, the Court considered subsequent admissions made during the trial: petitioner admitted receiving P97,000.00 from the retention lien and P25,000.00 from the counterbond. Therefore, the total payments credited to respondent were P130,000.00 + P97,000.00 + P25,000.00 = P252,000.00. The remaining balance was thus P314,610.50 - P252,000.00 = P62,610.50. The Court deleted the award of attorney's fees, citing the general rule that they cannot be recovered as damages unless specifically enumerated in Article 2208 of the Civil Code, none of which were present in this case.
Main Doctrine
A party's failure to submit a sworn statement denying or explaining inability to admit or deny matters of fact in a Request for Admission, within the period designated or as extended by the court, results in the implied admission of those facts, pursuant to Rule 26 of the Rules of Court. Such implied admissions, once made, cannot be contradicted unless shown to have been made through palpable mistake.