FACTS:

On April 20, 1982, petitioner Panay Railways Inc., a government-owned and controlled corporation, executed a Real Estate Mortgage Contract with Traders Royal Bank (TRB) to secure a loan and credit accommodations. The mortgage covered several parcels of lands, including Lot No. 6153, with certain portions excluded. Petitioner failed to pay its obligations to TRB, leading to the extra-judicial foreclosure of the mortgaged properties.

On January 20, 1986, a Certificate of Sale was issued in favor of TRB as the highest bidder, and the sale of Lot No. 6153 was registered with the Register of Deeds. Thereafter, TRB consolidated the title in its name and obtained new transfer certificates of title (TCT) for the properties.

On February 12, 1990, TRB filed a Petition for Writ of Possession against petitioner. During the proceedings, petitioner filed a Manifestation and Motion to Withdraw Motion for Suspension of the petition, acknowledging TRB as the registered owner of Lot No. 6153 and other properties. Petitioner also recognized the validity of the foreclosure and waived any opposition to TRB's possession of the properties.

In 1994, petitioner discovered that the extrajudicial foreclosure included some excluded properties and filed a Complaint for Partial Annulment of Contract to Sell and Deed of Absolute Sale. It later filed an Amended Complaint and a Second Amended Complaint.

Respondents filed Motions to Dismiss on various grounds, including petitioner's lack of legal capacity to sue and the waiver and abandonment of its claims. On July 18, 1997, the RTC granted the Motion to Dismiss, considering petitioner's Manifestation and Motion as a judicial admission of TRB's ownership of the disputed properties.

On August 11, 1997, petitioner filed a Notice of Appeal without paying the necessary docket fees. Respondents subsequently filed a Motion to Dismiss Appeal for nonpayment of docket fees. Petitioner argued that it was not familiar with the revised Rules of Court that took effect on July 1, 1997.

ISSUES:

1. Whether the Manifestation and Motion filed by petitioner constituted a judicial admission of TRB's ownership of the disputed properties.

2. Whether the RTC correctly dismissed the case based on the waiver made in the Manifestation and Motion.

RULING:

1. Yes, the Manifestation and Motion filed by petitioner constituted a judicial admission of TRB's ownership of the disputed properties. The RTC correctly held that the Manifestation was executed by petitioner's duly authorized representative with the assistance of counsel, and that this admission operated as a waiver barring petitioner from claiming otherwise.

2. Yes, the RTC correctly dismissed the case based on the waiver made in the Manifestation and Motion. The court noted that the petitioner recognized and acknowledged TRB as the registered owner of the disputed properties, and even manifested that it had no opposition to the grant of the Writ of Possession to TRB. Therefore, the dismissal was proper as it established that the petitioner had waived its claim and had no cause of action.

PRINCIPLES:

• A judicial admission is a formal acknowledgment made in the course of legal proceedings, while an extrajudicial admission is an informal acknowledgment made outside the context of a legal proceeding. A judicial admission operates as a waiver of rights, barring the party from claiming otherwise.

• A waiver is the intentional relinquishment of a known right or advantage, and may be express or implied. It can result in the extinguishment of a claim or demand.

• In order to have legal capacity to sue, a party must have the necessary qualifications and authority to assert a claim or demand.

• A cause of action is the factual basis for a claim, and must be sufficiently pleaded in the complaint. Failure to state a cause of action may lead to the dismissal of the case.

• An indispensable party is one whose interest will be affected by the judgment, and must be impleaded in order for the court to resolve the controversy completely and effectively.