LUCIO TAN vs. RODIL ENTERPRISES FACTS: Rodil Enterprises is a lessee of the Ides O Ra!!a "#ildin$ sin!

e %&'& (hi!h is o(ned )* the Rep#)li! of the Philippines. Rodil and the Rep#)li! entered into a Rene(al of a Conttra!t of Lease thro#$h the DENR. A s#)se+#ent S#pple,entar* Contra!t (as si,ilarl* entered into e-tendin$ the lease a$ree,ent #ntil Septe,)er %. %&&/. The Co#rt #pheld the validit* of the 0a* %1 and 2'. %&&2 !ontra!ts (hen it (as pla!ed in several a!tions involvin$ Rodil. Ides O Ra!!a "#ildin$ Tenants Asso!iation. In!.. ho(ever. prior to that the offi!e of the President rendered a de!ision de!larin$ the Rene(al of Contra!t of Lease and the S#pple,entar* Contra!t of no for!e and effe!t. Rodil appealed the sae, to the CA and SC and (as dis,issed )* )oth !o#rts. Rodil filed a Petition for Revie( on Certiorari (ith the CA on the Order of E-e!#tion in (hi!h !ase the CA ann#lled the Order and en3oined the Offi!e of the President to a)ide )* the de!ision in the !onsolidated !ases (hi!h #pholds the validit* of the Rene(al of the Contra!t of Lease and the S#pple,ental Contra!t. A s#)se+#ent Contra!t of Lease (as dra(n )et(een Rodil and the Rep#)li! . the sa,e to )e effe!tive retroa!tivel* fro, Sept %. %&&/ to A#$#st 2%. 24%2 at a ,onthl* rental of P5'. 245.5/. s#)3e!t to the ad3#st,ent #pon the approval of the ne( appraisal !overin$ the )#ildin$. Rodil s#)leased vario#s #nits to ,e,)ers of the Tenants Asso!iation a,on$ the, is Tan (ho rented a spa!e 6no(n as "oti!a Divisoria. Rodil filed a !o,pliant for Unla(f#l Detainer a$ainst Tan for not pa*in$ the ,onthl* rentals despite repeated oral and (ritten de,ands. A pa*,ent of rentals in arrears (as si,ilarl* so#$ht pl#s the attorne*s fees and liti$ation !osts in!l#din$ the ,onthl* rentals. Tan on the other hand alle$ed that he is a le$iti,ate tenant of the $overn,ent as o(ner of the )#ildin$ and not Rodil. and as s#!h he has the ri$ht to lease the said pre,ises pendin$ the disposition and sale of the )#ildin$. 7e )ased his !lai, fro, the fa!t that the Offi!e of the President had de!lared the Rene(al Contra!t of Lease and S#pple,ental Contra!t )et(een Rodil and Rep#)li! to )e (itho#t for!e and effe!t. A!!ordin$l* thee DENR (as dire!ted to a(ard the lease !ontra!t on favor of the Asso!iation of (hi!h Tan is a ,e,)er. Th#s he pra*ed for the dis,issal of the !o,plaint. 0eTC iss#ed an order re!o$ni8in$ the an a$ree,ent entered into in open !o#rt )* Tan and Rodil. Tan also filed a 0otion to Allo( Defendant to Deposit Rentals. averrin$ that he had a$reed to pa* all the rentals d#e on the s#)se+#ent ,onthl* rentals as the* fall d#e9 the rental arrears and that he (o#ld li6e to deposit the a,o#nt to the Cit* Treas#rer of 0anila. 7o(ever. the 0eTC denied s#!h deposit and rendered a de!ision in favor of Rodil and held that Tan did not !ontest the s#)lease on a ,onthl* )asis and in fa!t ad,itted the sa,e. Tan appealed the de!ision to the RTC (hi!h reversed and dis,iss the !o,plaint findin$ that 0eTC erred in holdin$ that the offer to !o,pro,ise )* Tan s !o#nsel (as a6in to an ad,ission of the fa!t. Rodil filed a Petiiton for Revie( (ith the appellate !o#rt (hi!h affir,ed and reinstated the de!ision of the 0eTC. A ,otion for Re!onsideration (as filed )* Tan ho(ever it (as denied.

ISSUE: :hether or not L#!iano Tan ,ade a 3#di!ial ad,ission annet his lia)ilit* as a s#) lessee of Rodil Enterprises; RULIN<:
Petitioner posits that the aforesaid admission, made in open court, and then, reiterated in his Motion to Allow Defendant to Deposit Rentals, cannot be taken as an admission of his liability, citing Section 27, Rule !" of the Rules of #ourt, which states, inter alia, that an offer of compromise in a ci$il case is not a tacit admission of liability% &he general rule is an offer of compromise in a ci$il case is not an admission of liability% 't is not admissible in e$idence against the offeror% &he rule, howe$er, is not iron(clad% &his much was elucidated by this #ourt in Trans-Pacific Industrial Supplies, Inc. v. Court of Appeals , to wit) &o 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% &hus, if a party denies the e*istence of a debt but offers to pay the same for the purpose of buying peace and a$oiding litigation, the offer of settlement is inadmissible% 'f in the course thereof, the party making the offer admits the e*istence of an indebtedness combined with a proposal to settle the claim amicably, then, the admission is admissible to pro$e such indebtedness +Moran, #omments on the Rules of #ourt, ,ol% -, p% 2!! . /0" ed%123 4rancisco, Rules of #ourt, ,ol% ,'', p% !2. /7! ed%1 citing Mc5iel $% 6olbrook, 2 Pac% +7S2 08, / 9% ed%, ""/2% 'ndeed, an offer of settlement is an effecti$e admission of a borrower:s loan balance +9%M% 6andicraft Manufacturing #orp% $% #ourt of Appeals, 0; S#RA ;8" . //"1% * * *% Similarly, in the case of Varadero de Manila v. Insular Lumber Co %!/ the #ourt applied the e*ception to the general rule% 'n Varadero< there was neither an e*pressed nor implied denial of liability, but during the course of the aborti$e negotiations therein, the defendant e*pressed a willingness to pay the plaintiff% 4inding that there was no denial of liability, and considering that the only =uestion discussed was the amount to be paid, the #ourt did not apply the rule of e*clusion of compromise negotiations% 'n the case at bar, the Me&# and the #ourt of Appeals properly appreciated petitioner:s admission as an e*ception to the general rule of inadmissibility% &he Me&# found that petitioner did not contest the e*istence of the sublease, and his counsel made frank representations anent the former:s liability in the form of rentals% &his e*pressed admission was coupled with a proposal to li=uidate% &he Motion to Allow Defendant to Deposit Rentals was deemed by the Me&# as an e*plicit acknowledgment of petitioner:s liability on the subleased premises% &he #ourt of Appeals agreed with the Me&#% 'ndeed, the e*istence of the #ontract of 9ease, dated 0 >ctober /// was not denied by petitioner% 4inally, we find a categorical admission on the part of petitioner, not only as to his liability, but also, as to the amount of indebtedness in the form of rentals due% &he >rder of the Me&# dated 27 ?une 2""" was clear that the petitioner agreed in open court to pay the amount of P88","""%"", representing petitioner:s unpaid rentals from September //7 to ?une 2"""3 and that petitioner will pay the monthly rentals computed at P !,7-"%"" on or before the -th day of each month after !" ?une 2"""% &he petitioner:s @udicial admission in open court,

as found by the Me&#, and affirmed by the #ourt of Appeals finds particular significance when $iewed together with his Motion to Allow Defendant to Deposit Rentals, wherein petitioner stated that the rentals due on the premises in =uestion from September //7 up to the present amounted to P8;7,-""%"", as of the date of filing the Motion% Petitioner cannot now be allowed to re@ect the same% An admission made in the pleading cannot be contro$erted by the party making such admission and are conclusi$e as to him, and that all proofs submitted by him contrary thereto or inconsistent therewith should be ignored whether ob@ection is interposed by a party or not% 8" A @udicial admission is an admission made by a party in the course of the proceedings in the same case, for purposes of the truth of some alleged fact, which said party cannot thereafter dispro$e% 8 WHEREFORE, the Petition is DENIED% &he Decision dated 2 >ctober 2""2 and the Resolution dated 2 May 2""- in #A(A%R% SP 5o% ;72" , affirming and reinstating the ; >ctober 2""" Decision of the Me&# in #i$il #ase 5o% ;;-08 are AFFIRMED% #osts against petitioners%