Development Bank of the Philippines vs. Court of Appeals

A party is not required to respond under oath to a request for admission that merely reiterates allegations already specifically denied in the answer, and failure to do so does not result in implied admission.

Irene Canadalla obtained loans from the Development Bank of the Philippines (DBP) in 1977 and 1979, secured by real estate mortgages over three parcels of land. After default due to business reverses, DBP extrajudicially foreclosed the mortgages and purchased the properties at public auction in 1989. Canadalla redeemed one property but disputed the redemption price for the remaining two, eventually assigning her redemption rights to her daughter, private respondent Rosalinda Canadalla-Go. Disputes over the correct redemption amount led Go to file a supplemental complaint for the exercise of the right of redemption and annulment of DBP's consolidated titles.

• The Loans and Mortgages: Irene Canadalla secured a ₱100,000 loan from DBP in January 1977 for her piggery business, executing a real estate mortgage over two parcels of land. In August 1979, she procured an additional ₱150,000 loan, secured by a mortgage over the same two parcels and a third parcel.
• Default and Foreclosure: Due to business reverses, typhoons, disease, and fire, Canadalla defaulted. DBP extrajudicially foreclosed the mortgages, and the properties were sold at public auction to DBP on September 5, 1989, with the sale registered on January 17, 1990.
• Redemption Dispute: Canadalla redeemed the property covered by TCT No. T-7609 within the one-year redemption period. For the remaining two properties (covered by free patent titles, allowing a six-year redemption period), she offered to redeem for ₱1.5 million in October 1995, but DBP demanded ₱1,927,729.50 based on its total claim. Canadalla subsequently assigned her redemption rights to her daughter, private respondent Rosalinda Canadalla-Go.
• Supplemental Complaint: In January 1996, Go offered to redeem the properties for ₱526,882.40, which DBP rejected, demanding ₱1,814,700.58. When Go failed to redeem, DBP consolidated its titles. Go then filed a Supplemental Complaint in the RTC of Makati City to exercise her right of redemption, nullify the consolidation, and annul DBP's titles.
• The Request for Admission: After DBP filed its Answer specifically denying the material allegations, Go filed a Request for Admission under Rule 26. DBP filed an unsworn Comment reiterating that the matters had already been admitted or specifically denied in its Answer. During the hearing, Go objected to the Comment for lacking an oath and failing to state reasons for denial. DBP countered that the request was redundant and subsequently filed a Manifestation with an affidavit from its counsel to cure any technical defect.
• Implied Admission Order: The RTC granted Go's motion to deem the matters impliedly admitted due to the unsworn response. The CA affirmed, ruling that the unsworn Answer and belated affidavit did not comply with Rule 26, and that DBP failed to timely object to the propriety of the matters requested.

• Redundancy of Request: Petitioner argued that the matters in the Request for Admission were substantially the same as those in the Supplemental Complaint and had already been specifically denied or admitted in its Answer, rendering a further response unnecessary.
• Substantial Compliance: Petitioner maintained that the sworn affidavit of its counsel, Atty. Caraan, sufficiently cured any defect in the unsworn Comment.
• Improper Subjects: Petitioner contended that some matters sought to be admitted involved questions of law, conclusions of fact, and matters of opinion, which are improper subjects of a request for admission.

• Lack of Oath: Respondent countered that because DBP's Answer was not under oath, it could not be considered substantial compliance with the requirements of Section 2, Rule 26 of the Rules of Court.
• Belated Affidavit: Respondent argued that the affidavit of Atty. Caraan failed to cure the defect because it was submitted after the motion for declaration of implied admission had been made and the hearing terminated.
• Untimely Objections: Respondent asserted that DBP failed to timely raise objections on the ground of impropriety, as DBP only manifested during the hearing that the matters had been covered in the Answer without explicitly objecting to the propriety of the requests.

• Implied Admission: Whether matters requested to be admitted under Rule 26, which are mere reiterations of allegations in the complaint and specifically denied in the answer, may be deemed impliedly admitted on the ground that the response is not under oath.
• Substantial Compliance: Whether the filing of an unsworn comment and a subsequent affidavit constitutes substantial compliance with Rule 26.
• Improper Subjects: Whether matters of law, conclusions, or opinions can be deemed impliedly admitted under Rule 26.

• Implied Admission: Implied admission was improperly applied. A request for admission that merely reiterates allegations from an earlier pleading is inappropriate under Rule 26, which contemplates interrogatories that clarify and shed light on the truth or falsity of allegations. A party cannot be compelled to admit matters already admitted in a pleading or to make a second denial of those already denied in the answer.
• Substantial Compliance: The unsworn Comment was merely a formal, not substantive, defect, excusable under the doctrine of liberal construction of pleadings to do substantial justice. Furthermore, the subsequent affidavit submitted before the RTC's order incorporated specific denials and constituted substantial compliance with Rule 26.
• Improper Subjects: Matters of law, conclusions, or opinions cannot be deemed impliedly admitted. Section 1 of Rule 26 limits requests for admission to the genuineness of documents and the truth of relevant matters of fact. Since several items in Go's request involved matters of law and opinion (e.g., assertions regarding Act No. 3135 and Rule 39), they were improper subjects for admission.

• Doctrine on Redundant Requests for Admission — A party should not be compelled to admit matters of fact already admitted by their pleading or to make a second denial of those already denied in the answer. A request for admission that merely reiterates allegations in an earlier pleading is inappropriate under Rule 26, as the rule contemplates interrogatories that clarify and shed light on the truth or falsity of the allegations, not mere recopying.
• Liberal Construction of Pleadings — All pleadings should be liberally construed to do substantial justice. An unsworn response to a request for admission is a formal, not substantive, defect that can be excused in the interest of justice, constituting substantial compliance with Rule 26.

• "A party should not be compelled to admit matters of fact already admitted by his pleading and … to make a second denial of those already denied in his answer to the complaint."
• "Rule 26 does not refer to a mere reiteration of what has already been alleged in the pleadings."
• "The rule authorizing a party to call on the other party to make an admission implies the making of demands for admission of relevant and material matters of facts – and not for admission of matters of law, conclusions, or opinions."

• Po v. Court of Appeals, G.R. No. L-34341, 22 August 1988, 164 SCRA 668 — Followed. Established that a party should not be compelled to admit matters already admitted or make a second denial of those already denied in the answer.
• Concrete Aggregates Co. v. Court of Appeals, 334 Phil. 77 (1997) — Followed. Brought the Po doctrine a step further by ruling that if a request for admission merely reproduces allegations already specifically denied in the answer, a response is no longer required.

• Section 1, Rule 26, Rules of Court — Defines the scope of matters that may be requested for admission: the genuineness of relevant documents and the truth of any relevant matter of fact. Applied to exclude matters of law, conclusions, and opinions from the scope of implied admissions.
• Section 2, Rule 26, Rules of Court — Governs implied admission, requiring a sworn statement denying or detailing reasons for inability to admit or deny. Applied with the clarification that a sworn response is unnecessary when the request merely reiterates allegations already addressed in prior pleadings.

Leonardo A. Quisumbing, Consuelo Ynares-Santiago, Antonio T. Carpio, Adolfo S. Azcuna