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697 Phil. 360 Five Percent (5%) of the amount due shall be imposed, until
the account is updated. In addition, a penalty of One
Hundred Pesos per day shall be imposed until the account is
updated;
THIRD DIVISION
f) That after receipt of the full payment, the Vendors shall
execute the necessary Absolute Deed of Sale covering the
[ G.R. No. 172825, October 11, 2012 ] house and lot mentioned above x x x[4]

SPOUSES MINIANO B. DELA CRUZ AND LETA L. DELA CRUZ,

Respondent made the following payments, to wit: (1) P500,000.00 by way of
PETITIONERS, VS. ANA MARIE CONCEPCION, RESPONDENT.
downpayment; (2) P500,000.00 on May 30, 1996; (3) P500,000.00 paid on
January 22, 1997; and (4) P500,000.00 bounced check dated June 30, 1997 which
DECISION
was subsequently replaced by another check of the same amount, dated July 7,
PERALTA, J.: 1997. Respondent was, therefore, able to pay a total of P2,000,000.00.[5]

Assailed in this petition for review on certiorari under Rule 45 of the Rules of Court Before respondent issued the P500,000.00 replacement check, she told petitioners
filed by petitioners spouses Miniano B. Dela Cruz and Leta L. Dela Cruz against that based on the computation of her accountant as of July 6, 1997, her unpaid
respondent Ana Marie Concepcion are the Court of Appeals (CA) Decision[1] dated obligation which includes interests and penalties was only P200,000.00.[6]
March 31, 2005 and Resolution[2] dated May 24, 2006 in CA-G.R. CV No. 83030. Petitioners agreed with respondent and said “if P200,000.00 is the correct balance,
it is okay with us.”[7]
The facts of the case are as follows:
Meanwhile, the title to the property was transferred to respondent. Petitioners
On March 25, 1996, petitioners (as vendors) entered into a Contract to Sell[3] with later reminded respondent to pay P209,000.00 within three months.[8] They
respondent (as vendee) involving a house and lot in Cypress St., Phase I, Town claimed that the said amount remained unpaid, despite the transfer of the title to
and Country Executive Village, Antipolo City for a consideration of P2,000,000.00 the property to respondent. Several months later, petitioners made further
subject to the following terms and conditions:
demands stating the supposed correct computation of respondent’s liabilities.[9]
Despite repeated demands, petitioners failed to collect the amounts they claimed
a) That an earnest money of P100,000.00 shall be paid from respondent. Hence, the Complaint for Sum of Money With Damages[10] filed
immediately; with the Regional Trial Court (RTC)[11] of Antipolo, Rizal. The case was docketed as
b) That a full down payment of Four Hundred Thousand Pesos Civil Case No. 98-4716.
(P400,000.00) shall be paid on February 29, 1996;
c) That Five Hundred Thousand Pesos (P500,000.00) shall be
In her Answer with Compulsory Counterclaim,[12] respondent claimed that her
paid on or before May 5, 1996; and
unpaid obligation to petitioners is only P200,000.00 as earlier confirmed by
d) That the balance of One Million Pesos (P1,000,000.00) shall
be paid on installment with interest of Eighteen Percent petitioners and not P487,384.15 as later alleged in the complaint. Respondent
(18%) per annum or One and a half percent (1-1/2 %) thus prayed for the dismissal of the complaint. By way of counterclaim,
interest per month, based on the diminishing balance, respondent prayed for the payment of moral damages and attorney’s fees. During
compounded monthly, effective May 6, 1996. The interest the presentation of the parties’ evidence, in addition to documents showing the
shall continue to run until the whole obligation shall have statement of her paid obligations, respondent presented a receipt purportedly
been fully paid. The whole One Million Pesos shall be paid indicating payment of the remaining balance of P200,000.00 to Adoracion Losloso
within three years from May 6, 1996; (Losloso) who allegedly received the same on behalf of petitioners.[13]
e) That the agreed monthly amortization of Fifty Thousand
Pesos (P50,000.00), principal and interest included, must be
On March 8, 2004, the RTC rendered a Decision[14] in favor of respondent, the
paid to the Vendors, without need of prior demand, on or
dispositive portion of which reads:
before May 6, 1996, and every month thereafter. Failure to
pay the monthly amortization on time, a penalty equal to

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WHEREFORE, premises considered, this case is hereby DISMISSED. The ALLEGED FAILURE OF PLAINTIFFS TO PRESENT COMPUTATION OF THE
plaintiff is hereby ordered to pay the defendant’s counterclaim, AMOUNT BEING CLAIMED AS DEFENDANT JUDICIALLY ADMITTED
amounting to wit: HAVING RECEIVED THE DEMAND LETTER DATED OCTOBER 22, 1997
WITH COMPUTATION OF THE BALANCE DUE.
a) P300,000 as moral damages; and
b) P100,000 plus P2,000 per court appearance as attorney’s fees. III.

SO ORDERED.[15] THE TRIAL COURT ERRED IN DISMISSING THE COMPLAINT ON THE

GROUND THAT THE DEFENDANT FULLY PAID THE CLAIMS OF
PLAINTIFFS BASED ON THE ALLEGED RECEIPT OF PAYMENT BY
The RTC noted that the evidence formally offered by petitioners have not actually ADORACION LOSLOSO FROM ANA MARIE CONCEPCION MAGLASANG
been marked as none of the markings were recorded. Thus, it found no basis to WHICH HAS NOTHING TO DO WITH THE JUDICIALLY ADMITTED
grant their claims, especially since the amount claimed in the complaint is different OBLIGATION OF APPELLEE.”[23]
from that testified to. The court, on the other hand, granted respondent’s
counterclaim.[16]
Invoking the rule on judicial admission, petitioners insist that respondent admitted
On appeal, the CA affirmed the decision with modification by deleting the award of in her Answer with Compulsory Counterclaim that she had paid only a total
moral damages and attorney’s fees in favor of respondent.[17] It agreed with the amount of P2 million and that her unpaid obligation amounts to P200,000.00.[24]
RTC that the evidence presented by petitioners cannot be given credence in They thus maintain that the RTC and the CA erred in concluding that said amount
had already been paid by respondent. Petitioners add that respondent’s total
determining the correct liability of respondent.[18] Considering that the purchase
liability as shown in the latter’s statement of account was erroneously computed
price had been fully paid by respondent ahead of the scheduled date agreed upon
by the parties, petitioners were not awarded the excessive penalties and interests. for failure to compound the monthly interest agreed upon.[25] Petitioners also
[19] The CA thus maintained that respondent’s liability is limited to P200,000.00 as claim that the RTC and the CA erred in giving credence to the receipt presented by
respondent to show that her unpaid obligation had already been paid having been
claimed by respondent and originally admitted by petitioners.[20] This amount,
allegedly given to a person who was not armed with authority to receive payment.
however, had already been paid by respondent and received by petitioners’ [26]
representative.[21] Finally, the CA pointed out that the RTC did not explain in its
decision why moral damages and attorney’s fees were awarded. Considering also The petition is without merit.
that bad faith cannot be attributed to petitioners when they instituted the
collection suit, the CA deleted the grant of their counterclaims.[22] It is undisputed that the parties entered into a contract to sell a house and lot for
a total consideration of P2 million. Considering that the property was payable in
Aggrieved, petitioners come before the Court in this petition for review on installment, they likewise agreed on the payment of interest as well as penalty in
certiorari under Rule 45 of the Rules of Court raising the following errors: case of default. It is likewise settled that respondent was able to pay the total
purchase price of P2 million ahead of the agreed term. Afterwhich, they agreed on
the remaining balance by way of interest and penalties which is P200,000.00.
I. Considering that the term of payment was not strictly followed and the purchase
price had already been fully paid by respondent, the latter presented to petitioners
“THE TRIAL COURT ERRED IN DISMISSING THE COMPLAINT ON THE her computation of her liabilities for interests and penalties which was agreed to
GROUND THAT PLAINTIFF FAILED TO FORMALLY OFFER THEIR by petitioners. Petitioners also manifested their conformity to the statement of
EVIDENCE AS DEFENDANT JUDICIALLY ADMITTED IN HER ANSWER account prepared by respondent.
WITH COMPULS[O]RY COUNTERCLAIM HER OUTSTANDING
OBLIGATION STILL DUE TO PLAINTIFFS AND NEED NO PROOF. In paragraph (9) of petitioners’ Complaint, they stated that:

II.
9) That the Plaintiffs answered the Defendant as follows: “if P200,000
THE TRIAL COURT ERRED IN DISMISSING THE COMPLAINT FOR is the correct balance, it is okay with us.” x x x.[27]
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But in paragraph (17) thereof, petitioners claimed that defendant’s outstanding The foregoing provision envisions two scenarios, namely, when evidence is
liability as of November 6, 1997 was P487,384.15.[28] Different amounts, introduced in an issue not alleged in the pleadings and no objection was
however, were claimed in their demand letter and in their testimony in court. interjected; and when evidence is offered on an issue not alleged in the pleadings
but this time an objection was raised.[29] When the issue is tried without the
With the foregoing factual antecedents, petitioners cannot be permitted to assert a objection of the parties, it should be treated in all respects as if it had been raised
different computation of the correct amount of respondent’s liability. in the pleadings.[30] On the other hand, when there is an objection, the evidence
may be admitted where its admission will not prejudice him.[31]
It is noteworthy that in answer to petitioners’ claim of her purported unpaid
obligation, respondent admitted in her Answer with Compulsory Counterclaim that
Thus, while respondent judicially admitted in her Answer that she only paid P2
she paid a total amount of P2 million representing the purchase price of the
million and that she still owed petitioners P200,000.00, respondent claimed later
subject house and lot. She then manifested to petitioners and conformed to by
and, in fact, submitted an evidence to show that she already paid the whole
respondent that her only balance was P200,000.00. Nowhere in her Answer did
amount of her unpaid obligation. It is noteworthy that when respondent presented
she allege the defense of payment. However, during the presentation of her
the evidence of payment, petitioners did not object thereto. When the receipt was
evidence, respondent submitted a receipt to prove that she had already paid the
formally offered as evidence, petitioners did not manifest their objection to the
remaining balance. Both the RTC and the CA concluded that respondent had
admissibility of said document on the ground that payment was not an issue.
already paid the remaining balance of P200,000.00. Petitioners now assail this,
Apparently, petitioners only denied receipt of said payment and assailed the
insisting that the court should have maintained the judicial admissions of
authority of Losloso to receive payment. Since there was an implied consent on
respondent in her Answer with Compulsory Counterclaim, especially as to their
the part of petitioners to try the issue of payment, even if no motion was filed and
agreed stipulations on interests and penalties as well as the existence of
no amendment of the pleading has been ordered,[32] the RTC cannot be faulted
outstanding obligations.
for admitting respondent’s testimonial and documentary evidence to prove
It is, thus, necessary to discuss the effect of failure of respondent to plead payment.[33]
payment of its obligations.
As stressed by the Court in Royal Cargo Corporation v. DFS Sports Unlimited, Inc.,
Section 1, Rule 9 of the Rules of Court states that “defenses and objections not [34]

pleaded either in a motion to dismiss or in the answer are deemed waived.” Hence,
respondent should have been barred from raising the defense of payment of the
The failure of a party to amend a pleading to conform to the evidence
unpaid P200,000.00. However, Section 5, Rule 10 of the Rules of Court allows the
adduced during trial does not preclude adjudication by the court on the
amendment to conform to or authorize presentation of evidence, to wit:
basis of such evidence which may embody new issues not raised in the
pleadings. x x x Although, the pleading may not have been amended to
Section 5. Amendment to conform to or authorize presentation of conform to the evidence submitted during trial, judgment may
evidence. – When issues not raised by the pleadings are tried with the nonetheless be rendered, not simply on the basis of the issues alleged
express or implied consent of the parties, they shall be treated in all but also on the issues discussed and the assertions of fact proved in the
respects as if they had been raised in the pleadings. Such amendment course of the trial. The court may treat the pleading as if it had
of the pleadings as may be necessary to cause them to conform to the been amended to conform to the evidence, although it had not
evidence and to raise these issues may be made upon motion of any been actually amended. x x x Clearly, a court may rule and render
party at any time, even after judgment; but failure to amend does not judgment on the basis of the evidence before it even though the
affect the result of the trial of these issues. If evidence is objected to at relevant pleading had not been previously amended, so long as no
the trial on the ground that it is not within the issues made by the surprise or prejudice is thereby caused to the adverse party. Put
pleadings, the court may allow the pleadings to be amended and shall a little differently, so long as the basic requirements of fair play
do so with liberality if the presentation of the merits of the action and had been met, as where the litigants were given full opportunity
the ends of substantial justice will be subserved thereby. The court may to support their respective contentions and to object to or
grant a continuance to enable the amendment to be made. refute each other's evidence, the court may validly treat the
pleadings as if they had been amended to conform to the

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evidence and proceed to adjudicate on the basis of all the

evidence before it. (Emphasis supplied)[35] Admittedly, payment of the remaining balance of P200,000.00 was not made to
the creditors themselves. Rather, it was allegedly made to a certain Losloso.
Respondent claims that Losloso was the authorized agent of petitioners, but the
To be sure, petitioners were given ample opportunity to refute the fact of and latter dispute it.
present evidence to prove payment.
Losloso’s authority to receive payment was embodied in petitioners’ letter[39]
With the evidence presented by the contending parties, the more important addressed to respondent, dated August 7, 1997, where they informed respondent
question to resolve is whether or not respondent’s obligation had already been of the amounts they advanced for the payment of the 1997 real estate taxes. In
extinguished by payment. said letter, petitioners reminded respondent of her remaining balance, together
with the amount of taxes paid. Taking into consideration the busy schedule of
We rule in the affirmative as aptly held by the RTC and the CA. respondent, petitioners advised the latter to leave the payment to a certain “Dori”
who admittedly is Losloso, or to her trusted helper. This is an express authority
Respondent’s obligation consists of payment of a sum of money. In order to given to Losloso to receive payment. Moreover, as correctly held by the CA:
extinguish said obligation, payment should be made to the proper person as set
forth in Article 1240 of the Civil Code, to wit:
Furthermore, that Adoracion Losloso was indeed an agent of the
appellant spouses is borne out by the following admissions of plaintiff-
Article 1240. Payment shall be made to the person in whose favor the appellant Atty. Miniano dela Cruz, to wit:
obligation has been constituted, or his successor in interest, or any
person authorized to receive it. (Emphasis supplied)
Q: You would agree with me that you have authorized this
Doiry Losloso to receive payment of whatever balance is due
The Court explained in Cambroon v. City of Butuan,[36] cited in Republic v. De you coming from Ana Marie Concepcion, that is correct?
Guzman,[37] to whom payment should be made in order to extinguish an A: In one or two times but not total authority, sir.
obligation:
Q: Yes, but you have authorized her to receive payment?
A: One or two times, yes x x x. (TSN, June 28, 1999, pp.
Payment made by the debtor to the person of the creditor or to one 16-17)[40]
authorized by him or by the law to receive it extinguishes the
obligation. When payment is made to the wrong party, however, the
obligation is not extinguished as to the creditor who is without fault or Thus, as shown in the receipt signed by petitioners’ agent and pursuant to the
negligence even if the debtor acted in utmost good faith and by authority granted by petitioners to Losloso, payment made to the latter is deemed
mistake as to the person of the creditor or through error induced by payment to petitioners. We find no reason to depart from the RTC and the CA
fraud of a third person. conclusion that payment had already been made and that it extinguished
respondent’s obligations.
In general, a payment in order to be effective to discharge an
obligation, must be made to the proper person. Thus, payment must be WHEREFORE, premises considered, the petition is DENIED for lack of merit. The
made to the obligee himself or to an agent having authority, express or Court of Appeals Decision dated March 31, 2005 and Resolution dated May 24,
implied, to receive the particular payment. Payment made to one 2006 in CA-G.R. CV No. 83030, are AFFIRMED.
having apparent authority to receive the money will, as a rule, be
treated as though actual authority had been given for its receipt. SO ORDERED.
Likewise, if payment is made to one who by law is authorized to act for
the creditor, it will work a discharge. The receipt of money due on a Velasco, Jr., (Chairperson), Abad, Perez,* and Mendoza, JJ., concur.
judgment by an officer authorized by law to accept it will, therefore,
satisfy the debt.[38]

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* Designated Acting Member, per Special Order No. 1299 dated August 28, 2012. [20] Id. at 50.

[1] Penned by Associate Justice Bienvenido L. Reyes (now a member of this Court), [21] Id.

with Associate Justices Godardo A. Jacinto and Rosalinda Asuncion-Vicente,

concurring; rollo, pp. 44-52. [22] Id. at 51.

[2] Id. at 53-55. [23] Petition, p. 4.

[3] Records, pp. 6-8. [24] Rollo, pp. 20-23.

[4] Id. at. 7. [25] Id. at 25.

[5] Rollo, p. 45. [26] Id. at 28-31.

[6] Records, p. 2. [27] Records, p. 2.

[7] Id. [28] Id. at 3.

[8] Id. at 3. [29] Azolla Farms v. Court of Appeals, G.R. No. 138085, November 11, 2004, 442

SCRA 133, 141; 484 Phil. 745, 752 (2004), citing Mercader v. Development Bank
[9] Rollo, p. 46. of the Phils. (Cebu Branch), G.R. No. 130699, May 12, 2000, 332 SCRA 82, 97.

[10] Records, pp. 1-5. [30] Sy v. Court of Appeals, G.R. No. 124518, December 27, 2007, 541 SCRA 371,

386-387.
[11] Branch 73.
[31] Azolla Farms v. Court of Appeals, supra note 20.
[12] Records, pp. 18-21.
[32] Sy v. Court of Appeals, supra note 30, at 387.
[13] Id. at 129.
[33] Royal Cargo Corporation v. DFS Sports Unlimited, Inc., G.R. No. 158621,
[14] Penned by Executive Judge Mauricio M. Rivera; id. at 269-273. December 10, 2008, 573 SCRA 414.

[15] Records p. 273. [34] Id. at 426, citing Bank of America, NT & SA v. American Realty Corporation,

G.R. No. 133876, December 29, 1999, 321 SCRA 659, 680-681; Talisay-Silay
[16] Id. Milling Co., Inc. v. Asociacion de Agricultores de Talisay-Silay, Inc., G.R. No.
91852, August 15, 1995, 247 SCRA 361, 377-378; and Mercader v. Development
[17] Rollo, p. 51.
Bank of the Philippines (Cebu Branch), supra note 29.

[35] Id. at 426-427.

[18] Id. at 49.

[36] G.R. No. 163605, September 20, 2006, 502 SCRA 494; 533 Phil. 773 (2006).
[19] Id. at 49-50.

[37] G.R. No. 175021, June 15, 2011, 652 SCRA 101, 119.

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[38] Cembrano v. City of Butuan, supra note 36, at 511-512; at 790-791.

(Citations omitted)

[39] Records, p. 120.

[40] Rollo, pp. 50-51.

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