EVIDENCE | B2015 CASE DIGESTS

TAN SHUY V. MAULAWIN

February 8, 2012 Sereno, J. Raeses, Roberto Miguel O.

SUMMARY: Tan Shuy extended a loan to Guillermo Maulawin. Eventually, Maulawin failed to pay, arguing that the loan had already been paid in full and that the net proceeds of such deliveries had been applied as installment payments for the loan. The RTC ruled in Guillermos favor, giving credence to the pesadas (receipts) that were issued by Tan Shuy and offered as evidence by Maulawin. According to the RTC, since the pesadas did not contain the notation pd, which would have shown that such actual payment had been made regarding the copra deliveries, they amount representing such deliveries should be applied as loan payments. The CA affirmed the finding of the RTC. The SC affirmed. With regard to the issue of the pesadas admissibility as a private document, the SC said that, pursuant to Sec. 20 of Rule 132, the authenticity and due execution of pesadas have been sufficiently shown. DOCTRINE: SEC. 20. Proof of private document . Before any private document offered as authentic is received in evidence, its due execution and authenticity must be proved either: (a) By anyone who saw the document executed or written; or (b) By evidence of the genuineness of the signature or handwriting of the maker. Any other private document need only be identified as that which it is claimed to be. (21a) FACTS:

1. Tan Shuy [petitioner] is engaged in the business of buying copra and corn in the 4th district of Quezon Province. a. According to his son, Vicente Tan, whenever they would buy copra or corn from crop sellers, they would prepare and issue a pesada1 in their favor. b. When a pesada contained the annotation pd on the total amount of the purchase price, it meant that the crop delivered had already been paid for by Tan Shuy. 2. Guillermo Maulawin [respondent] is a farmerbusinessman engaged in buying and selling copra and corn. 3. On July 10, 1997, Tan Shuy extended a loan of P420K to Guillermo. In consideration thereof, Guillermo obligated himself to pay the loan and to sell lucad or copra to petitioner. Below is a a reproduction of the contract:
No 2567 Lopez, Quezon July 10, 1997

Tinanggap ko kay G. TAN SHUY ang halagang ...................................................................... (P420,000.00) salaping Filipino. Inaako ko na isusulit sa kanya ang aking LUCAD at babayaran ko ang nasabing halaga. Kung hindi ako makasulit ng LUCAD o makabayad bago sumapit ang ........................., 19 ...... maaari niya akong ibigay sa may kapangyarihan. Kung ang pagsisingilan ay makakarating sa Juzgado ay sinasagutan ko ang lahat ng kaniyang gugol. [Sgd. by respondent] P........................................... ........................................... Lagda

4. The transactions between Tan Shuy and Guillermo were coursed through Tan Shuys daughter Elena. a. She served as cashier in the business of Tan Shuy, who primarily prepared and issued the pesada. b. When shes absent, Vicente would issue the pesada.

A pesada is a document containing details of the transaction, including the date of sale, the weight of the crop delivered, the trucking cost, and the net price of the crop.

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i. Vicente also helped Tan Shuy in buying copra and granting loans to customers [copra sellers]. 1. According to him, part of their agreementpart of their agreement with Guillermo was that they would put the annotation sulong on the pesada when partial payment on the loan had been made. 5. Despite repeated demands, Guillermo remitted only P23k in August 1998 and P5.5k in October 1998, or a total of P28.5K. 6. Claiming that Maulawin had an outstanding balance of P391.5K and convinced that he no longer had any intention to pay, Ran Shuy went to the Lupon Tagapamayapa. a. Failing to reach a settlement, he filed a complaint before the RTC. Maulawins Arguments: 1. Loan had already been paid in full. 2. He continuously delivered and sold copra to petitioner from April 1998 to April 1999. a. An oral arrangement that the net proceeds thereof shall be applied as installment payments for the loan was made. b. His deliveries amounted to P420,537.68 worth of copra. 3. To bolster his claim, he presented copies of pesadas issued by Elena and Vicente. a. The pesadas did not contain the notation "pd," which meant that actual payment of the net proceeds from copra deliveries was not given to him, but was instead applied as loan payment. 4. Tan Shuy filed a complaint because he got angry when Maulawin sold copra to other copra buyers. Ruling of the RTC:

1. The net proceeds from Guillermo's copra deliveries represented in the pesadas, which did not bear the notation "pd" - should be applied as installment payments for the loan. 2. Gave credence to the pesadas, as their due execution and authenticity was established by Elena and Vicente [Tan Shuys children]. 3. The RTC did not credit the net proceeds from 12 pesadas, as they were deliveries for corn and not copra. a. Guillermo testified that it was the net proceeds from the copra deliveries to be applied as installment payment for the loan. b. Thus, P41,585.25, which corresponded to the net proceeds from corn deliveries, should be deducted from the amount of P420,537.68 claimed by Guillermo to be the total value of his copra deliveries. 4. There exists, therefore, a balance of P41,047.57 in Guillermos loan. Ruling of the CA: Affirmed the RTC; denied Tan Shuys MR. 1. Tan Shuy could have easily belied the existence of the pesadas and the purpose for which they were offered in evidence by presenting Elena [his daughter] as witness. However, he failed to do so. 2. This failure allowed the CA to give credence to Guillermos testimony in that the net proceeds from the copra deliveries were applied as installment payments for the loan. ISSUE: 1. WON the pesadas require authentication before they can be admitted in evidence. 2. WON the delivery of copra amounted to installment payments for the loan obtained by Guillermo from Tan Shuy. RULING:

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1. Yes, BUT the authenticity and due execution of the pesadashave already been established. RATIO: 1. Tan Shuys Arguments: a. The pesadas should not have been admitted since they were private documents that were not authenticated. b. The pesadas were fabricated in order to show that the goods delivered were copra and not corn. c. Five of the pesadasmentioned in the Formal Offer of Evidence of Guillermo were not actually offered. Supreme Court Ruling: a. According to Rule 132, Sec. 20, there are two ways of proving the execution and authenticity of a private document2. a. The RTC found that due execution and authenticity of the pesadas were established by Eena Tan and sometimes by Vicente Tan. i. On cross-examination, Vicente reiterated that Elena acted as the cashier, and that Elena issued such. ii. He confirmed the penmanship and handwriting of his sister who acted as cashier. iii. He was even made to compare Xerox copies of the
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pesadaswith the original copies and affirmed that they are faithful reproductions. b. Tan Shuy is estopped from questioning the due execution and authenticity of the pesadas. 2. Tan Shuys Arguments: a. Guillermo undertook two separate obligations: i. Pay for the loan in cash ii. Sell lucad or copra. b. Since the written agreement did not specifically provide for the application of the net proceeds from the deliveries for the loan, Tan Shuy argues that he cannot be compelled to accept copra as payment for the loan. i. The pesadas did not specifically indicate that the net proceeds from the copra deliveris were to be used as installment payments for the loan. c. Guillermos copra deliveries were duly paid in cash. d. The pesadas were in fact documentary receipts for those payments. Supreme Court Ruling: a. Pursuant to Art. 1232 of the Civil Code, an obligation is extinguished by payment or performance. There is payment when there is delivery of money or performance of an obligation. b. Art. 1245 provides for a special mode of payment known as dation in payment. a. Dation in payment extinguishes the obligation to the extent of the value of the thing delivered, either as agreed upon by the parties or as may be proved, unless the parties by agreement express or implied, or by their silence consider the thing as

SEC. 20. Proof of private document. Before any private document offered as authentic is received in evidence, its due execution and authenticity must be proved either: (a) By anyone who saw the document executed or written; or (b) By evidence of the genuineness of the signature or handwriting of the maker. Any other private document need only be identified as that which it is claimed to be. (21a)

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equivalent to the obligation, in which case the obligation is totally extinguished. c. In this regard, the RTC made the following findings: a. Pesadas from April 1998 to April 1999 shows that Guillermo only gets the payments for trucking while the total amount which represent the total purchase price for the copras that he delivered to the plaintiff were all given to Elena Tan Shuy as installments for the loan he owed to plaintiff. i. Such claim was bolstered by the testimony of Apolinario Cario which affirmed that he also sold copras to the plaintiff Tan Shuy. ii. Guillermo also said that he incurred indebtedness to Tan Shuy and whenever he delivered copras the amount of the copras sold were applied as payments to his loan. d. The CA fully subscribed to the findings of the RTC. e. The subsequent arrangement between Tan Shuy and Guillermo can thus be considered as one in the nature of dation in payment. There was partial payment every time Guillermo delivered copra to Tan Shuy, chose not to collect the net proceeds of his copra deliveries, and instead applied the collectible as installment payments for his loan from Tan Shuy. DISPOSITIVE: WHEREFORE the Petition is DENIED. The 31 July 2009 Decision and 13 November 2009 Resolution of the Court of Appeals in CA-G.R. CV No. 90070 are hereby AFFIRMED.