FACTS:

The case involves a collection suit between Filinvest Finance & Leasing Corporation (private respondent) and Juanita Salas (petitioner). Petitioner purchased a motor vehicle from Violago Motor Sales Corporation (VMS) and financed the purchase through a promissory note endorsed to private respondent. Due to a discrepancy in the engine and chassis numbers, petitioner defaulted on her installments. As a result, private respondent filed a collection suit against petitioner in the Regional Trial Court. The trial court ruled in favor of private respondent, ordering petitioner to pay the outstanding balance, as well as interest and attorney's fees. Both parties appealed to the Court of Appeals with differing arguments. The Court of Appeals modified the trial court's decision, ordering petitioner to pay the remaining balance and interest. Petitioner's motion for reconsideration was denied, leading to the present petition for review. Petitioner argues that there was fraud, bad faith, and misrepresentation on the part of VMS, which should release her from liability to private respondent. Additionally, petitioner claims that no contract existed between her and VMS and that VMS should be held liable for damages.

ISSUES:

1. Whether or not petitioner is absolved from her obligation under the contract due to fraud, bad faith, and misrepresentation of Violago Motor Sales Corporation.

2. Whether or not it is necessary to implead Violago Motor Sales Corporation as a party to the case.

RULING:

1. No, petitioner is not absolved from her obligation under the contract. The Court of Appeals held that the allegations, statements, or admissions contained in a pleading are conclusive as against the pleader. Petitioner cannot subsequently take a position contradictory of, or inconsistent with her pleadings. The Court of Appeals also ruled that the genuineness and due execution of the promissory note are deemed admitted unless specifically denied by the adverse party.

2. No, it is not necessary to implead Violago Motor Sales Corporation as a party to the case. The Court of Appeals held that since petitioner already sued Violago Motor Sales Corporation for breach of contract with damages in a separate case, the private respondent can proceed against it separately.

PRINCIPLES:

• Admissions made by the parties in the pleadings, or in the course of the trial or other proceedings, do not require proof and cannot be contradicted unless previously shown to have been made through palpable mistake. (Sec. 2, Rule 129, Revised Rules of Court; Sta. Ana vs. Maliwat, L-23023, Aug. 31, 1968, 24 SCRA 1018)

• When an action or defense is founded upon a written instrument, the genuineness and due execution of the instrument shall be deemed admitted unless specifically denied by the adverse party, under oath, and sets forth what he claims to be the facts. (Sec. 8, Rule 8, Revised Rules of Court; Hibbered vs. Rohde and Mc Millian, 32 Phil. 476)