Luciano Tan v.

Rodil Enterprises
December 18, 2006 | Chico-Nazario | Judicial Admissions | Reyes

PETITIONER/S: Luciano Tan (Sublessee)

RESPONDENT/S: Rodil Enterprises
SUMMARY: An Unlawful Detainer case was filed by Rodil Enterprises against Tan for refusal to pay
rentals and to vacate the leased unit despite repeated demands. Tan made an offer of compromise in
open court as the amount of unpaid rentals. No settlement was reached but the MeTC and CA,
subsequently, held that such offer constituted an implied admission of Tans liability to pay rent to
Rodil Enterprises. The SC affirmed the CA, decision, ruling that Tans admission was an exception to
the general rule of inadmissibility.
DOCTRINE/S: To determine the admissibility or non-admissibility of an offer to compromise, the
circumstances of the case and the intent of the party making the offer should be considered. Thus, if a
party denies the existence of a debt but offers to pay the same for the purpose of buying peace and
avoiding litigation, the offer of settlement is inadmissible. If in the course thereof, the party making the
offer admits the existence of an indebtedness combined with a proposal to settle the claim amicably,
then, the admission is admissible to prove such indebtedness.

FACTS:
1. Rodil Enterprises is a lessee of the Ides ORacca Building since 1959, which
is owned by the Republic of the Philippines. Rodil and the Republic entered
into a Renewal of a Contract of Lease through the DENR. A subsequent
Supplementary Contract was similarly entered into extending the lease
agreement until September 1, 1997.
2. The validity of such contracts was questioned. The SC declared these
contracts valid (Nov 29, 2001). Prior to this however, the Office of the
President declared these contracts of no force and effect (Feb 8, 1994),
appealed to the CA and AC, both were dismissed.
3. Rodil filed a Petition for Review on Certiorari with the CA on the Order of
Execution in which case the CA annulled the Order and enjoined the Office of
the President to abide by the decision in the consolidated cases, which upholds
the validity of the Renewal of the Contract of Lease and the Supplemental
Contract.
4. A subsequent Contract of Lease was drawn between Rodil and the Republic,
the same to be effective retroactively from Sept 1, 1997 to August 21, 2012 at
a monthly rental of P65,206.67, subject to the adjustment upon the approval of
the new appraisal covering the building.
5. Rodil subleased various units to members of the Tenants Association among
them is Tan who rented a space known as Botica Divisoria.
6. Rodil filed a compliant for Unlawful Detainer against Tan for not paying the
monthly rentals despite repeated oral and written demands. A payment of
rentals in arrears was similarly sought plus the attorneys fees and litigation
costs including the monthly rentals.
7. Tan on the other hand alleged that he is a legitimate tenant of the government
as owner of the building and not Rodil, and as such he has the right to lease
the said premises pending the disposition and sale of the building. He based
his claim from the fact that the Office of the President had declared the
Renewal Contract of Lease and Supplemental Contract between Rodil and
Republic to be without force and effect. Accordingly, DENR was directed to
award the lease contract on favor of the Association of which Tan is a
member. Thus he prayed for the dismissal of the complaint.
 8. MeTC issued an order recognizing the agreement entered into in open court by
Tan and Rodil.
9. Tan also filed a Motion to Allow Defendant to Deposit Rentals, averring that
he had agreed to pay all the rentals due on the subsequent monthly rentals as
they fall due; the rental arrears and that he would like to deposit the amount to
the City Treasurer of Manila. However, the MeTC denied such deposit and
rendered a decision in favor of Rodil and held that Tan did not contest the
sublease on a monthly basis and in fact admitted the same.
10. MeTC (Dec 6, 2000) rendered decision in favor of Rodil ruling that Tan did
not contest the sublease on a monthly basis and in fact admitted to his liability;
RTC: REVERSED MeTC and held that the act of Tan was not an admission
of liability and should not be considered evidence against him; CA: ruled in
favor of Rodil and held that Tan made an implied admission of the existence
of a contract of sublease and that he had reneged in the payments since Sept.
1, 1997 and that Tans Motion to Allow Deposit of Rentals was another
admission in favor of Rodil Enterprises.

ISSUE/S & HELD:

1. WON Tans offer of compromise is admissible in evidence against himself? YES
Petition DENIED. CA decision AFFIRMED.

RULE/S:

RULE 130: Rules of Admissibility

Section 27. Offer of compromise not admissible. In civil cases, an offer of compromise is not an
admission of any liability, and is not admissible in evidence against the offeror.
In criminal cases, except those involving quasi-offenses (criminal negligence) or those allowed by law
to be compromised, an offer of compromised by the accused may be received in evidence as an implied
admission of guilt.
A plea of guilty later withdrawn, or an unaccepted offer of a plea of guilty to lesser offense, is not
admissible in evidence against the accused who made the plea or offer.
An offer to pay or the payment of medical, hospital or other expenses occasioned by an injury is not
admissible in evidence as proof of civil or criminal liability for the injury. (24a)

RULE 70: Forcible Entry and Unlawful Detainer

Section 1. Who may institute proceedings, and when. Subject to the provisions of the next
succeeding section, a person deprived of the possession of any land or building by force, intimidation,
threat, strategy, or stealth, or a lessor, vendor, vendee, or other person against whom the possession of
any land or building is unlawfully withheld after the expiration or termination of the right to hold
possession, by virtue of any contract, express or implied, or the legal representatives or assigns of any
such lessor, vendor, vendee, or other person, may, at any time within one (1) year after such unlawful
deprivation or withholding of possession, bring an action in the proper Municipal Trial Court against
the person or persons unlawfully withholding or depriving of possession, or any person or persons
claiming under them, for the restitution of such possession, together with damages and costs. (1a)

ANALYSIS:
1. GR: An Offer of compromise in a civil case is not an admission of liability. It is not
admissible in evidence against the offeror. However, this rule is not absolute.
2. In the case of Tran-Pacific Industrial Supplies v. CA: To determine the admissibility
or non-admissibility of an offer to compromise, the circumstances of the case and the
intent of the party making the offer should be considered. Thus, if a party denies the
existence of a debt but offers to pay the same for the purpose of buying peace and
avoiding litigation, the offer of settlement is inadmissible. If in the course thereof, the
party making the offer admits to the existence of indebtedness combined with a
 proposal to settle the claim amicably, then, the admission is admissible to prove such
indebtedness.
3. MeTC and the CA properly appreciated petitioners admission as an exception to the
general rule of inadmissibility. The MeTC found that petitioner did not contest the
existence of the sublease, and his counsel made frank representations anent the
formers liability in the form of rentals. This expressed admission was coupled with a
proposal to liquidate. The Motion to Allow Defendant to Deposit Rentals was
deemed by the MeTC as an explicit acknowledgement of petitioners liability on the
subleased premises. The CA agreed with the MeTC.
4. Tan made a categorical admission, not only as to his liability, but also, as to the
amount of indebtedness in the form of rentals due. The Order of the MeTC dated June
27, 2000 was clear that the petitioner agreed in open court to pay the amount of
P440,000.00, representing petitioners unpaid rentals from September 1997 to June
2000; and that petitioner will pay the monthly rentals computed at P13,750.00 on or
before the 5th day of each month after June 30, 2000. The petitioners judicial
admission in open court, as found by the MeTC, and affirmed by the CA finds
particular significance when viewed together with his Motion to Allow Defendant to
Deposit Rentals, wherein petitioner stated that the rental due on the premises in
question from Sept. 1997 up to the present amounted to P467,500.00, as of the date of
filing the Motion. Petitioner cannot be allowed to reject the same. An admission
made in the pleading cannot be controverted by the party making such admission and
are conclusive as to him, and that all proofs submitted by him contrary thereto or
inconsistent therewith should be ignored whether objection is interposed by a party in
the course of the proceedings in the same case, for purposes of the truth of some
alleged fact, which said party cannot thereafter disprove.

DISPOSITION:
WHEREFORE, the Petition is DENIED. The Decision dated October 21, 2002 and the Resolution
dated May 12, 2005 in CA-G.R. SP No. 67201, affirming and reinstating the October 6, 2000 Decision
of the MeTC in Civil Case No. 166584 are AFFIRMED. Costs against petitioners.