ADERITO Z. YUJUICO v.

UNITED RESOURCES ASSET MANAGEMENT

CASE TITLE
[ GR No. 211113, Jun 29, 2015 ]
APPLICABLE RULE /
Motion for leave to file amendments; Amendments to Pleadings (R10)
SECTION / TOPIC
(based from the syllabus)
To secure a loan of SRADEC from URAMI, several stockholders of STRADEC executed Pledge
Agreements whereby they pledged a certain amount of their stocks in the said company in favor of the
respondent United Resources Asset Management, Inc. (URAMI). Yujuico is one of the said stockholders.
Not having been able to comply with its loan obligations, a Notice, signed by Atty. Nethercott,
informing them about the impending auction sale were sent to STRADEC and to its stockholders.
FACTS
Nethercott claims that he is URAMI’s attorney-in-fact. As response, Yujuico filed before the RTC of
Pasig an injunction complaint seeking to enjoin the sale at public auction mentioned in Atty.
Nethercott's notice. In his complaint, Yujuico asserts that the planned auction sale is void as Nethercott
was not authorized to initiate the sale in behalf of URAMI.

MTC
As the RTC did not issue the injunction, the auction sale pushed through with URAMI
emerging as the winning bidder. Thereafter, the RTC issued a writ of preliminary
injunction, which effectively prevented URAMI from appropriating the stocks it had
purchased during the auction sale. Nethercott filed his answer denying the material
allegations of the injucntion complaint. However, URAMI, in its answer, AGREED with
Yujuico that the sale was VOID and that it never authorized Nethercott to cause the sale
but it pointed out that since URAMI never sanctioned the sale, it should not be liable
for the prejudice caused by the sale and hence, overall it asked for the dismissal of the
case.
Yujuico then filed a Motion for Summary Judgment in view of the admissions made by
URAMI in its answer regarding Atty. Nethercott's lack of authority to cause the auction
RTC sale of pledged stocks, there was no longer any genuine issue left to be resolved in trial.
The resolution of such Motion was however, deferred due to the TRO issued by the SC
which remained in effect for more than a year. URAMI then changed its counsel and
then filed an answer with compulsory counterclaim. In its amended answer, URAMI still
vouched for the dismissal of the injunction complaint but reneged from its previous
admissions under the original answer. It now claims that Nethercott was DULY
REMEDIAL MATTERS AUTHORIZED by the Board to cause the sale. The RTC allowed the said amended answer
against the protest of Yujuico. But on MR of Yujuico, the RTC set aside its previous
resolution, explaining that it cannot admit the amended answer because URAMI did not
first secure a leave of court. In compliance, URAMI filed the pertinent motion which
was granted by the RTC.

In a petition for certiorari in the CA, the higher court sustained the allowance by the
CA / CTA RTC of the amended answer. Hence, this appeal.

Others
(Quasi
Judicial
Agencies, if
any)

ISSUE
(based from the syllabus)
WHETHER OR NOT THE AMENDED ANSWER OF URAMI MAY STILL BE ALLOWED
 YES. Our rules of procedure allow a party in a civil action to amend his pleading as a matter of right, so
long as the pleading is amended only once and before a responsive pleading is served (or, if the
pleading sought to be amended is a reply, within ten days after it is served). Otherwise, a party can
only amend his pleading upon prior leave of court.
As a matter of judicial policy, courts are impelled to treat motions for leave to file amended pleadings
with liberality. Hence, as long as it does not appear that the motion for leave was made with bad faith
or with intent to delay the proceedings, courts are justified to grant leave and allow the filing of an
amended pleading. Once a court grants leave to file an amended pleading, the same becomes binding
and will not be disturbed on appeal unless it appears that the court had abused its discretion.
In this case, URAMI filed its motion for leave seeking the admission of its amended answer more than
two (2) years after it filed its original answer. Despite the considerable lapse of time between the filing
of the original answer and the motion for leave, the RTC still granted the said motion. Such grant was
later affirmed on appeal by the Court of Appeals.

Matters involving the amendment of pleadings are primarily governed by the pertinent provisions of
RULING Rule 10 and not by Section 4 of Rule 129 of the Rule of Court. Hence, allegations (and admissions) in a
(If possible, highlight or pleading—even if not shown to be made through "palpable mistake"—can still be corrected or
underline the doctrine) amended provided that the amendment is sanctioned under Rule 10 of the Rules of Court.

Nevertheless, even if we are to apply Section 4 of Rule 129 to the present case, we still find the
allowance of URAMI's amended answer to be in order. To our mind, a consideration of the evidence
that URAMI plans to present during trial indubitably reveals that the admissions made by URAMI under
its original answer were a product of clear and patent mistake.
One of the annexes attached by URAMI is a board resolution authorizing Nethercott to cause the sale.
With the existence of such board resolution, the statement in URAMI's original answer pertaining to
the lack of authority of Atty. Nethercott to initiate the 23 June 2004 auction sale thus appears
mistaken, if not entirely baseless and unfounded.
Also the mere fact that it was filed only after 2 years after the original answer was filed does not
discredit the amended answer as a mere dilatory measure for it should be remembered that the SC
issued a TRO which was in effect for more than a year so even if it wants to, URAMI could not have
filed said amended answer.