TRANS-PACIFIC v.

CA Despite these payments, on December 12, 1985, respondent

G.R. No. 109172 Associated Bank demanded payment of P492,100.00 from
August 19, 1994 petitioner, representing accrued interests. It was also argued
Bidin, J.: that the promissory notes were erroneously released.

DOCTRINE:
Art. 1271. The delivery of a private document evidencing a credit,
Initially, petitioner Trans-Pacific expressed its willingness to pay the
made voluntarily by the creditor to the debtor, implies the
amount demanded by the bank. However, it had a change of
renunciation of the action which the former had against the latter.
heart and initiated an action before the RTC of Makati for specific
performance and damages. The RTC ruled in favor of Trans-
The presumption created by the Art. 1271 of the Civil Code is not
Pacific but the CA reversed the decision.
conclusive but merely prima facie. If there be no evidence to the
contrary, the presumption stands. Conversely, the presumption
ISSUE/S:
loses its legal efficacy in the face of proof or evidence to the
Whether or not petitioner has indeed paid in full its obligation to
contrary.
respondent bank
FACTS:
HELD:
In 1979, petitioner Trans-Pacific applied for and was granted several
Respondent court is of the view that being mere duplicates, the
financial accomodations amounting to P1,300,000.00 from
documents found in possession of Trans-Pacific cannot be
respondent Associated Bank. The loans were secured by four (4)
considered as basis for the full payment of the obligation.
promissory notes, a real estate mortgage covering three parcels of
Accordingly, Article 1271 should be construed as pertaining to the
land, and a chattel mortgage over petitioners stock and
original copy of the document. This argument is groundless.
inventories.
The Supreme Court ruled that, it is undisputed that the documents
Petitioner, apparently, cannot pay the obligation in full. Thereafter,
presented were duplicate originals. A duplicate copy of the original
petitioner was requested for and was granted a restructuring of the
may be admitted in evidence when the original is in the possession
remaining indebtedness amounting to P1,057,500.00. applying all
of the party against whom the evidence is offered, and the latter
the penalties and interests. To secure the loan of P1,213,400.00,
fails to produce it after reasonable notice, as in the case of
three (3) promissory notes1 were executed by petitioner Trans-
respondent bank.
Pacific.
However, the petition should still fail.
The mortgaged parcels of land were substituted by another
mortgage covering two other parcels of land and a chattel
The presumption created by the Art. 1271 of the Civil Code is not
mortgage on petitioner's stock inventory. According to petitioner,
conclusive but merely prima facie. If there be no evidence to the
the released parcels of land were sold for P1,386,614.20, the
contrary, the presumption stands. Conversely, the presumption
proceeds of which were turned over to the respondent bank and
loses its legal efficacy in the face of proof or evidence to the
applied to the restructured loan of petitioner. Duplicate original
contrary. In the case at bar, despite the delivery of promissory
copies of the promissory notes were returned with the stamp: PAID.
notes, the presumption of full payment of indebtedness is
overcome by the evidence showing that there was still unpaid
interests on the part of petitioner, as seen in the cross-
examinations and testimonies.

1 First promissory note: P1,050,000.00 (working capital); Article 1271 of the Civil Code raises a presumption, not of
Second: P121,166.00 (restructured interest) payment, but of the renunciation of the credit where more
Third: P42,234.00 (restructured interest) convincing evidence would be required than what normally
would be called for to prove payment. The rationale for made out of a private document, the intendment of the law would
allowing the presumption of renunciation in the delivery of a private thus be to refer to the delivery only of the original original rather
instrument is that, unlike that of a public instrument, there could be than to the original duplicate of which the debtor would normally
just one copy of the evidence of credit. Where several originals are retain a copy.