Candano-Lim vs. Lim

An oral motion for leave of court to amend a pleading, made in open court with the adverse party present and given opportunity to be heard, is a mere irregularity that does not deprive the court of authority to act on it. A statement regarding the character of property as conjugal or paraphernal is a legal conclusion, not a judicial admission, because ownership and title to property cannot be created by mere judicial admission.

Belinda and David married on June 27, 1971, without executing any agreement relative to their property relations as spouses. Because the marriage was celebrated before the Family Code took effect on August 3, 1988, and no marriage settlement was executed, their default property regime is conjugal partnership of gains. The case involves a petition for declaration of nullity of marriage under Article 36 of the Family Code, which also requires the settlement and liquidation of the parties' common properties.

Belinda and David married on June 27, 1971, without executing any agreement relative to their property relations as spouses. They had two children, now of legal age, residing in the United States. On November 24, 2015, David filed a Petition with the RTC for the declaration of nullity of his marriage to Belinda under Article 36 of the Family Code, alleging psychological incapacity. He estimated the total value of the conjugal assets at PHP 15,350,000.00, consisting of condominium units.

In her Answer with Counter-Petition, Belinda moved to dismiss, alleging David did not disclose the true value of their conjugal assets, which she claimed were worth around PHP 186,830,000.00. David filed a Reply and Supplemental Reply, which included an Omnibus Motion for leave to pay additional docket fees, explaining he inadvertently undervalued the conjugal assets because he had no personal knowledge of the extent of the properties. The RTC allowed David to amend the petition, and he filed the First Amended Petition on May 11, 2016, providing an estimated value of PHP 173,350,000.00 and including art pieces and investments.

During a hearing on September 14, 2016, the RTC noted the parties' manifestation that all properties not incorporated in the First Amended Petition, once discovered to be in Belinda's name, are considered paraphernal. The RTC also ordered David to restore support payments of PHP 750,000.00 quarterly to Belinda as support pendente lite. David subsequently submitted his Compliance with the Second Amended Petition.

Belinda filed a Motion for Special Order to sell Unit 15-A at Foggy Heights, Tagaytay City, which the RTC granted on March 16, 2017, citing David's admission. David's motion for reconsideration was denied on May 29, 2017, with the RTC ruling it was too late for David to argue the property is presumed conjugal, but noting his reservation and requiring immediate amendment for additional properties.

On August 8, 2018, during a hearing on the cancellation of a notice of lis pendens, David's counsel orally moved to further amend the petition. Belinda's counsel opposed, but the RTC allowed the amendment, giving David thirty days and Belinda the opportunity to amend her responsive pleadings. David filed the Third Amended Petition dated December 17, 2018, estimating conjugal assets at PHP 284,311,155.00 and including a statement that non-mention of any property shall not automatically be considered paraphernal.

Belinda filed a Second Motion for Special Order to sell Units 14-A, 14-B, 14-D, 14-E, 15-B, 15-D, and 15-E of Foggy Heights, reiterating David's alleged admission. The RTC denied the motion on October 24, 2018, stating there was nothing in its earlier Order authorizing the sale of units other than Unit 15-A and that David should be given his day in court. Belinda's reconsideration was denied on November 27, 2018.

• Violation of Rule 10, Section 3: Belinda argued that the RTC committed grave abuse of discretion in allowing David to file the Third Amended Petition without a prior written motion for leave of court, notice to the adverse party, and opportunity to be heard, in violation of Rule 10, Section 3 of the Rules of Court.

• Inexcusable Delay: Belinda argued that David incurred inexcusable delay in amending his petition, and that it was unbelievable for him to omit conjugal properties several times by mere inadvertence, especially since he was able to provide an estimated value in the Original Petition.

• Judicial Admission: Belinda argued that the RTC gravely abused its discretion in denying the Second Motion for Special Order because David's judicial admission that properties not included in the First Amended Petition are paraphernal may only be controverted by showing the admission was made through palpable mistake or was not in fact made, which David failed to establish.

• Valid Justification for Amendment: David argued there was a valid and justifiable reason for the Third Amended Petition, stressing that Belinda purchased several properties using conjugal funds without his knowledge over their decades-long marriage, and he needed time to submit a complete list of conjugal assets.

• Legal Presumption of Conjugal Property: David asserted that the RTC's denial of the Second Motion for Special Order has basis in law because all properties acquired during the marriage are presumed conjugal, and the subject properties were acquired in 2015 and 2016 during the subsistence of the marriage.

• Compliance with Procedural Rules: The Republic, through the OSG, argued that the CA correctly denied the petition because the Third Amended Petition was filed with leave of court, and the amendment was in line with Section 5 of the Rule on Declaration of Absolute Nullity of Void Marriage and Annulment of Voidable Marriages.

• Nature Determined by Law: The OSG emphasized the presumption that all properties acquired during the marriage are conjugal and insisted that the nature of the subject properties is determined by law, not by the stipulation of a party.

• Amendment of Petition: Whether the CA committed a reversible error in holding that the RTC did not act with grave abuse of discretion when it allowed David to file a substantially amended petition for a third time.

• Denial of Second Motion for Special Order: Whether the CA committed a reversible error in holding that the RTC did not act with grave abuse of discretion when it denied Belinda's Second Motion for Special Order.

• Amendment of Petition: No. The RTC did not act with grave abuse of discretion in allowing the substantial amendment of the petition for declaration of nullity of marriage for a third time. The oral motion for leave to amend was a mere irregularity because Belinda was present and had the full opportunity to oppose it, satisfying the requirements of notice and opportunity to be heard under Rule 10, Section 3 of the Rules of Court.

• Denial of Second Motion for Special Order: No. The RTC did not act with grave abuse of discretion in denying the Second Motion for Special Order. David's statement on the paraphernal character of the properties was a mere legal conclusion, not a judicial admission, because ownership and title to property cannot be created by judicial admission and require a review of facts and evidence under Articles 109 and 117 of the Family Code.

• Amendment of Petition: The Court ruled that while Rule 10, Section 3 of the 1997 Rules of Court requires a written motion filed in court for substantial amendments after a responsive pleading has been filed, Rule 15, Section 2 allows oral motions made in open court or in the course of a hearing or trial. The Court, citing Chong vs. Court of Appeals and Gonzales vs. Balikatan Kilusang Bayan sa Pananalapi Inc., held that the oral motion was a mere irregularity that did not deprive the RTC of authority to act on it, since Belinda was represented by counsel and had the full opportunity to oppose the amendment. The Court also found no inexcusable delay because David repeatedly manifested difficulty in identifying all conjugal properties, lacked copies of titles, and had filed a motion for production of documents. The amendment was made before trial proper, and the RTC deferred the initial presentation of evidence and granted Belinda the opportunity to amend her answer.

• Denial of Second Motion for Special Order: The Court ruled that David's statement on the paraphernal character of the properties cannot constitute a judicial admission because it is a legal conclusion, not a factual assertion. Under Rule 129, Section 4 of the Rules of Court, a judicial admission must be a deliberate, clear, and unequivocal statement of a party about a concrete fact within that party's peculiar knowledge, not a matter of law. The Court cited Agbayani vs. Lupa Realty Holding Corp. and American jurisprudence holding that statements relating to ownership are legal conclusions. The Court further ruled that ownership and title to property are acquired only pursuant to a legal mode or process and cannot be created by mere judicial admission. The determination of whether a property is conjugal or exclusive requires a review of facts and evidence under Articles 109 and 117 of the Family Code. Additionally, the alleged admission was contradicted by David's earlier statement that he had no personal knowledge of the extent of the conjugal properties, and the trial court has discretion to relieve a party from the consequences of an admission for strong reasons.

• Oral Motion for Leave to Amend as Mere Irregularity — An oral motion for leave of court to amend a pleading, made in open court with the adverse party present and given the opportunity to be heard, is a mere irregularity that does not deprive the court of authority to act on it. The requirements of notice and opportunity to be heard under Rule 10, Section 3 of the Rules of Court are satisfied when the adverse party's counsel is present and orally argues against the amendment.

• Judicial Admission Requires Statement of Fact, Not Legal Conclusion — A judicial admission must be a deliberate, clear, and unequivocal statement of a party about a concrete fact within that party's peculiar knowledge, not a matter of law. Statements regarding ownership of property or the character of property as conjugal or paraphernal are legal conclusions that require a review of evidence, interpretation of documents of title, and analysis of law; hence, ownership cannot be created by judicial admission.

• Conjugal Partnership of Gains as Default Regime — For marriages celebrated before August 3, 1988, without a marriage settlement, the default property regime is conjugal partnership of gains. Under Article 117 of the Family Code, properties acquired by onerous title during the marriage at the expense of the common fund are conjugal, while Article 109 enumerates the exclusive properties of each spouse.

• Grave Abuse of Discretion — Grave abuse of discretion exists when an act is done contrary to the Constitution, the law, or jurisprudence; where there are palpable errors of jurisdiction or a gross misapprehension of facts; or when the respondent court acted in utter and blatant disregard of the Constitution or the applicable laws, rules, or evidence. No grave abuse of discretion exists if the assailed ruling has basis in the evidence and the applicable law and jurisprudence.

• "Evidently, after a responsive pleading has been filed, a written motion for leave of court to introduce substantial amendments to a pleading is required under Rule 10, Section 3 of the 1997 Rules of Court." — This passage establishes the general rule requiring a written motion for substantial amendments, which the Court then characterized as a mere irregularity in this case given the circumstances.

• "Still, it should be emphasized that during the hearing held on August 8, 2018, Belinda was represented by her counsel and had the full opportunity to oppose David's oral motion for leave to amend his petition. In view thereof, David's prayer for leave of court for the substantial amendment of his petition through an oral motion instead of a written one should be considered as a mere irregularity in the proceedings that does not deprive the RTC of the authority to act upon the oral motion." — This is the ratio decidendi on the first issue, holding that the oral motion was a mere irregularity because notice and opportunity to be heard were satisfied.

• "Case law teaches that a judicial admission 'must be a deliberate, clear, [and] unequivocal statement of a party about a concrete fact within that party's peculiar knowledge and not a matter of law.'" — This passage defines the canonical formulation of judicial admissions, which the Court applied to hold that David's statement on the paraphernal character of properties was a legal conclusion.

• "It is therefore evident that David's statement cannot be considered as conclusive on the nature of the subject properties as paraphernal. Whether the properties in issue are paraphernal cannot be ascertained simply through judicial admissions, as Belinda's ownership or title to the properties may only be acquired through a legal mode or process and by compliance with the conditions under the appropriate laws, including Article 109 of the Family Code." — This is the ratio decidendi on the second issue, holding that ownership cannot be created by judicial admission.

• Chong vs. Court of Appeals, 554 Phil. 43 (2007) — Controlling precedent holding that an oral motion for leave to amend a pleading may be validly granted by the trial court to avoid multiplicity of suits, to determine the real controversies between the parties, and to decide the case on the merits without unnecessary delay.

• Gonzales vs. Balikatan Kilusang Bayan sa Pananalapi Inc., 494 Phil. 105 (2005) — Followed, holding that an oral motion to declare a defendant in default was allowed even though the rule requires a written motion, because what the rule eschews is the lack of opportunity to be heard.

• Agbayani vs. Lupa Realty Holding Corp., 853 Phil. 49 (2019) — Followed, defining the parameters of judicial admissions and holding that a judicial admission must be a statement of fact, not opinion or legal conclusion.

• Lisam Enterprises, Inc. vs. Banco De Oro Unibank, Inc., 686 Phil. 293 (2012) — Followed, holding that the granting of leave to file an amended pleading is a matter particularly addressed to the sound discretion of the trial court, and that amendments should be liberally allowed in furtherance of justice.

• Tanyag vs. Tanyag, 914 Phil. 150 (2021) — Cited for the principle that upon the filing of a petition for declaration of nullity of marriage, the RTC acquires jurisdiction over matters incidental and consequential to the marriage, including the settlement of the parties' common properties.

• Western Sales Trading Company, Inc. vs. 7D Food International, Inc., 910 Phil. 613 (2021) — Cited for the definition of judicial admission as a deliberate, clear, and unequivocal statement about a concrete fact within the party's peculiar knowledge.

• Article 36, Family Code — The provision under which David filed the petition for declaration of nullity of marriage, alleging Belinda was psychologically incapacitated to comply with essential marital obligations.

• Rule 10, Sections 2 and 3, 1997 Rules of Court — The procedural rule governing amendments to pleadings. Section 2 allows amendment as a matter of right before a responsive pleading is served; Section 3 requires leave of court for substantial amendments after a responsive pleading has been filed, with the order made upon motion filed in court, after notice to the adverse party, and an opportunity to be heard.

• Rule 15, Section 2, 1997 Rules of Court — Provides that all motions shall be in writing except those made in open court or in the course of a hearing or trial, which the Court used to characterize David's oral motion as a mere irregularity.

• Rule 129, Section 4, Rules of Court — Defines judicial admissions as admissions, oral or written, made by a party in the course of proceedings in the same case, which do not require proof and may be contradicted only by showing palpable mistake or that the admission was not in fact made.

• Articles 109 and 117, Family Code — Article 109 enumerates the exclusive property of each spouse; Article 117 defines conjugal partnership properties. The Court applied these provisions to hold that the determination of whether a property is conjugal or exclusive requires a review of facts and evidence.

• Sections 5 and 7, A.M. No. 02-11-10-SC (Rule on Declaration of Absolute Nullity of Void Marriage and Annulment of Voidable Marriages) — Section 5 requires the petition to state the properties involved, with failure to comply being a ground for immediate dismissal; Section 7 restricts motions to dismiss. The Court noted the RTC had discretion to either allow amendment or dismiss.

• Caguioa (Chairperson)
• Gaerlan
• Dimaampao