In Landbank of the Philippines v. Albrando R. Abellana, the Supreme Court ruled that a party is bound by their previous judicial admissions, preventing them from taking contradictory stances in subsequent legal proceedings. This means if someone admits a fact in court, they can’t later deny it in another case involving the same issues. The decision underscores the importance of consistency in legal arguments and protects the integrity of judicial proceedings by preventing parties from manipulating the legal system through contradictory claims. Ultimately, the ruling reinforces the principle that prior statements made in court carry significant weight and can have lasting consequences on a litigant’s legal position.

Mortgage Foreclosure Revisited: Can a Borrower Challenge a Sale They Once Acknowledged?

The case began with a real estate mortgage (REM) executed by Albrando Abellana in favor of Landbank to secure a loan for Ernesto Villaos. When Abellana and Villaos defaulted, Landbank foreclosed on the property and emerged as the winning bidder at a public auction. After the redemption period lapsed, Landbank consolidated ownership under its name. Years later, Abellana filed a complaint to repurchase the property, which was denied by both the Regional Trial Court (RTC) and the Court of Appeals (CA). His petition to the Supreme Court was also denied, solidifying Landbank’s ownership.

Subsequently, Landbank sold the property to Joven Arzaga. Then, Abellana filed a new case seeking to nullify the extrajudicial foreclosure proceedings, the final deed of sale, the consolidation of ownership, and Landbank’s title. He argued that he was not properly informed of the foreclosure. Landbank countered by raising defenses of laches, prescription, and res judicata. The RTC denied Landbank’s motion to dismiss but declared Abellana estopped from contesting matters already litigated in the repurchase case. The CA affirmed the RTC’s decision, leading Landbank to elevate the case to the Supreme Court.

The Supreme Court addressed several critical issues. First, it examined whether the action for declaration of nullity was barred by prescription. The Court clarified that actions to declare the nullity of contracts are imprescriptible under Article 1410 of the Civil Code, which states:

“Art. 1410. The action or defense for the declaration of the inexistence of a contract does not prescribe.”

This principle distinguishes actions for nullity from actions for reconveyance based on fraud, which have a prescriptive period.

Next, the Court tackled the issue of laches, which is the neglect or omission to assert a right, coupled with a lapse of time and other circumstances causing prejudice to the adverse party. It emphasized that the elements of laches must be proven affirmatively and cannot be established by mere allegations. As the determination of laches requires a thorough examination of the facts, it was premature to apply the doctrine based solely on the complaint’s allegations.

The Court then considered the applicability of res judicata, a doctrine that prevents parties from relitigating issues that have already been decided by a competent court. There are two concepts of res judicata: (1) bar by former judgment, and (2) conclusiveness of judgment. The elements of bar by former judgment are: (1) final judgment, (2) jurisdiction of the rendering court, (3) judgment on the merits, and (4) identity of parties, subject matter, and causes of action. The Court found that res judicata did not apply because the cause of action in the present case differed from the previous repurchase case.

The principle of conclusiveness of judgment, on the other hand, dictates that a fact or question already decided by a competent court is conclusively settled and cannot be relitigated in future actions. The key element here is the identity of issues. The Court noted that the main issue in the repurchase case was Abellana’s entitlement to repurchase the property, premised on Landbank’s valid ownership. The validity of the foreclosure proceedings was not contested in that case. Therefore, since the issues were not identical, conclusiveness of judgment was also inapplicable.

However, the Supreme Court found merit in Landbank’s argument that Abellana was estopped from challenging the foreclosure proceedings due to his prior judicial admissions. Judicial admissions are deliberate, clear, and unequivocal statements made during judicial proceedings. These admissions operate as a waiver of proof, removing the admitted fact from the field of controversy. Citing Alfelor v. Halasan, the Court reiterated that a party who judicially admits a fact cannot later challenge it:

“A party who judicially admits a fact cannot later challenge that fact as judicial admissions are a waiver of proof; production of evidence is dispensed with. A judicial admission also removes an admitted fact from the field of controversy.”

Abellana’s admissions in his appellant’s brief in the repurchase case were critical. He acknowledged that his property was foreclosed and that he failed to redeem it. He also admitted Landbank’s right as the owner to sell the property. These admissions, coupled with the CA’s finding that the foreclosure proceedings were properly conducted, estopped Abellana from later contesting the validity of those proceedings.

Due to Abellana’s judicial admissions, the Supreme Court ruled that he lacked a cause of action to institute the complaint for the declaration of nullity. His prior recognition of the foreclosure’s validity and Landbank’s ownership precluded him from later challenging those facts. The Court concluded that there was no need to discuss whether the action constituted a collateral attack on the certificate of title, as the issue of ownership had already been settled.

FAQs

What was the key issue in this case?	The key issue was whether Abellana could challenge the validity of foreclosure proceedings he had previously acknowledged in a prior case.
What is the doctrine of judicial admission?	Judicial admission refers to statements made in court that are considered binding and prevent the party from later contradicting those statements.
What is the significance of Article 1410 of the Civil Code?	Article 1410 states that actions for the declaration of the inexistence of a contract do not prescribe, meaning they can be brought at any time.
What is the principle of estoppel?	Estoppel prevents a person from denying or asserting anything contrary to that which has been established as the truth, either by judicial or legislative acts.
How does res judicata relate to this case?	Res judicata, specifically the concept of conclusiveness of judgment, was relevant because it examined whether issues already decided in a previous case could be relitigated.
What is laches, and why was it not applicable in this case?	Laches is the neglect or omission to assert a right over a period of time, prejudicing the adverse party; it was not applicable here because its elements were not affirmatively proven.
Why was Abellana prevented from challenging the foreclosure?	Abellana was prevented because he had previously made judicial admissions recognizing the validity of the foreclosure proceedings and Landbank’s ownership.
What was the effect of Abellana’s statements in his appellant’s brief?	His statements acted as judicial admissions that estopped him from later contesting the validity of the foreclosure.
What is a cause of action, and why did Abellana lack it?	A cause of action is the right to bring a lawsuit; Abellana lacked it because his prior admissions contradicted his claim that the foreclosure was invalid.

In conclusion, the Supreme Court’s decision in Landbank v. Abellana underscores the importance of consistency and truthfulness in legal proceedings. Parties cannot take contradictory positions in different cases to suit their interests. This ruling promotes the integrity of the judicial system and ensures that judicial admissions are given due weight.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: LANDBANK OF THE PHILIPPINES, VS. ALBRANDO R. ABELLANA, G.R. No. 237369, October 19, 2022