Dela Cruz v. Concepcion
REITERATIONFacts
The Antecedents: Petitioners (vendors) and respondent (vendee) entered into a Contract to Sell for a house and lot for P2,000,000.00. The contract stipulated payment terms including an earnest money, down payment, installment payments, and a balance of P1,000,000.00 with 18% annual interest, payable within three years. Respondent made payments totaling P2,000,000.00. Before issuing a replacement check for P500,000.00, respondent's accountant computed her unpaid obligation, including interests and penalties, at P200,000.00, which petitioners agreed was acceptable. The title to the property was transferred to respondent. Petitioners later demanded P209,000.00, then P487,384.15, but failed to collect despite repeated demands. Procedural History: Petitioners filed a Complaint for Sum of Money With Damages. Respondent claimed her outstanding obligation was only P200,000.00, which she alleged to have paid. The Regional Trial Court (RTC) dismissed the complaint, ordering petitioners to pay respondent's counterclaim for moral damages and attorney's fees, noting that petitioners' evidence was not formally offered and their claimed amounts varied. The Court of Appeals (CA) affirmed the dismissal but deleted the award for moral damages and attorney's fees, agreeing that petitioners' evidence lacked credence and that respondent's liability was limited to P200,000.00, which had already been paid to petitioners' representative. The Petition: Petitioners sought review, arguing the RTC erred in dismissing the complaint despite respondent's judicial admissions of an outstanding obligation and receipt of demand letters. They also contended the CA erred in giving credence to a receipt showing payment to Adoracion Losloso, whom they claimed was not authorized to receive payment.
Issue(s)
Whether the trial court erred in dismissing the complaint despite alleged judicial admissions by the respondent, considering the presented evidence of payment. Whether the Court of Appeals erred in giving credence to the receipt presented by the respondent as proof of payment, and whether the respondent's obligation was extinguished by payment made to Adoracion Losloso, an alleged authorized agent.
Ruling
The petition is denied for lack of merit. The Court of Appeals Decision dated March 31, 2005 and Resolution dated May 24, 2006 in CA-G.R. CV No. 83030 are affirmed.
Ratio Decidendi
On the issue of judicial admissions and amendment to conform to evidence: The Court held that while the respondent judicially admitted in her Answer that she still owed P200,000.00, she later presented evidence of payment. Crucially, petitioners did not object to the presentation of this evidence of payment. Under Section 5, Rule 10 of the Rules of Court, when issues not raised by the pleadings are tried with the express or implied consent of the parties, they shall be treated as if they had been raised in the pleadings. The failure to amend the pleading to conform to the evidence does not affect the result of the trial of these issues. Petitioners were given ample opportunity to refute the fact of payment and present their own evidence, thus, they cannot claim surprise or prejudice. The Court reiterated the principle that judgment may be rendered on the basis of evidence presented, even if the relevant pleading had not been previously amended, as long as fair play requirements are met. On the issue of payment to Adoracion Losloso: The Court affirmed the findings of the RTC and CA that the respondent's obligation had been extinguished by payment. Payment must be made to the proper person or to an authorized agent. The Court found that Adoracion Losloso (Dori) was indeed an authorized agent of the petitioners. This authority was evidenced by a letter from petitioners to respondent dated August 7, 1997, advising respondent to leave the payment to 'Dori' or her helper due to respondent's busy schedule. Furthermore, during cross-examination, petitioner Miniano dela Cruz admitted authorizing Losloso to receive payment on one or two occasions, which constitutes express authority. Therefore, payment made to Losloso, as petitioners' agent, is deemed payment to the petitioners themselves, effectively extinguishing respondent's obligation.
Main Doctrine
Where evidence of payment is presented without objection, the issue of payment, though not originally pleaded, may be considered by the court, treating the pleadings as amended to conform to the evidence, provided no surprise or prejudice is caused to the adverse party. Payment made to an agent with express or implied authority to receive it extinguishes the obligation.