YAM v.
CA
Facts:
o The parties in the case at bar entered into 2
loan agreements with assumption of solidary
liability, whereby they were granted a 500k and
300k worth of loans, the former denominated by
IGLF, secured by a chattel mortgage of printing
machinery, the latter evidenced with 2
promissory notes
o Eventually, petitioners had paid their first loan
and private respondent was placed under
receivership by the Central bank
o With regard to the second loan, petitioners only
made a partial payment thereof then wrote a
letter to the private respondent proposing to
settle their obligation
o Private respondent replied that it would reduce
the penalty charges up to 140k, provided
petitioners can pay their obligation on or before
July 30, 1986
o On the said date, pet paid by means of a check,
receipt of which was acknowledged by the
receiver
o The corresponding voucher for the check bears
the notation full payment of IGLF LOAN
o Then after, private respondent still sent 2
demand letters to petitioners seeking payment
of the balance of the incurred loan
o For the respondents failure to respond, PR filed
a case for the collection of the sum of money
o Petitioners claimed that they had fully paid their
obligation; they contended that after receiving
the private respondents letter concerning the
conditional offer to reduce their penalty charges,
spouses Yam met with Sobrepeas, president of
respondent corp, during which the latter agreed
to waive the penalties, provided petitioners paid
the principal and interest computed as of July
31, 1986
o Petitioners added that it was reflected in the
voucher accompanying the check issued with
the notation
Issue:
WON there was condonation on the petitioners loan
Held:
NO. The appointment of a receiver operates to
suspend the authority of a corporation and of its
directors and officers over its property and effects,
such authority being reposed in the receiver.
Sobrepeas has no authority to condone the debt. The
notation on the voucher covering the check payment
that a full payment of IGLF loan was made does not
bind respondent. It would have been different if the
notated appeared in the receipt issued by the
corporation through its receiver, which would be an
admission against interest. According to Art. 1270 par.
2, express condonation must comply the forms of
donation. Where the value exceeds Php 5,000, the
donation and acceptance must be made in writing;
otherwise, void. In the case at bar, it is undisputed that
the alleged agreement to condone the second IGLF
loan was not reduced in writing

Destajo no authority to sign and condone any

indebtness, her duties being limited to issuing official
receipts, preparing vouchers and documentations

TRANS-PACIFIC INDUSTRIAL SUPPLIES, INC.

v. CA

Facts:

o Petitioner was granted several financial

accommodations by respondent Associated
Bank which were evidenced by 4 promissory
notes, a real estate mortgage and a chattel
mortgage over petitioners stock and inventories

o Unable to settle the obligation in full, petitioner

requested for a restructuring of the remaining
indebtedness, all the previous payments made
were applied to penalties and interests

o Then again, it was secured with 3 new PNs
o The mortgaged parcels of land were substituted
by another mortgage covering 2 other parcels of
land and a chattel mortgage on petitioners
inventory
o The released parcels of land were sold and the
proceeds were turned over to the bank and
applied to Trans-Pacific restructured loan
o Respondent bank returned the duplicate original
copies of 3 PNs to Trans-Pacific with the word
PAID stamped thereon;
o Despite the return of notes, Associated Bank
demanded from Trans-Paci payment of interests,
since the PNs were erroneously released
o At first, TP was willing to pay the amount
demanded but changed its mind and instead
filed an action before the RTC for specific
performance and damages, the prayed that
their obligation be declared as fully paid
ISSUE:
HELD:
TRANS-PACIFIC v. CA
G.R. No. 109172
August 19, 1994
Bidin, J.:
DOCTRINE:
Art. 1271. The delivery of a private document
evidencing a credit, made voluntarily by the creditor to
the debtor, implies the renunciation of the action
which the former had against the latter.
The presumption created by the Art. 1271 of the Civil
Code is not conclusive but merely prima facie. If there
be no evidence to the contrary, the presumption
stands. Conversely, the presumption loses its legal
efficacy in the face of proof or evidence to the
contrary.
FACTS:
In 1979, petitioner Trans-Pacific applied for and was
granted several financial accomodations amounting to
P1,300,000.00 from respondent Associated Bank.
The loans were secured by four (4) promissory notes, a
real estate mortgage covering three parcels of land,
and a chattel mortgage over petitioners stock and
inventories.
Petitioner, apparently, cannot pay the obligation in full.
Thereafter, petitioner was requested for and was
granted a restructuring of the remaining indebtedness
amounting to P1,057,500.00. applying all the penalties
and interests. To secure the loan of P1,213,400.00,
three (3) promissory notes were executed by
petitioner Trans-Pacific.
The mortgaged parcels of land were substituted by
another mortgage covering two other parcels of land
and a chattel mortgage on petitioner's stock inventory.
According to petitioner, the released parcels of land
were sold for P1,386,614.20, the proceeds of which
were turned over to the respondent bank and applied
to the restructured loan of petitioner. Duplicate original
copies of the promissory notes were returned with the
stamp: PAID.
Despite these payments, on December 12, 1985,
respondent Associated Bank demanded payment of
P492,100.00 from petitioner, representing accrued
interests. It was also argued that the promissory notes
were erroneously released.
Initially, petitioner Trans-Pacific expressed its
willingness to pay the amount demanded by the bank.
However, it had a change of heart and initiated an
action before the RTC of Makati for specific
performance and damages. The RTC ruled in favor
of Trans-Pacific but the CA reversed the
decision.
ISSUE/S:
Whether or not petitioner has indeed paid in full its
obligation to respondent bank
HELD:
Respondent court is of the view that being mere
duplicates, the documents found in possession of
Trans-Pacific cannot be considered as basis for the full
payment of the obligation. Accordingly, Article 1271
should be construed as pertaining to the original
copy of the document. This argument is groundless.
The Supreme Court ruled that, it is undisputed that the
documents presented were duplicate originals. A
duplicate copy of the original may be admitted in
evidence when the original is in the possession of the
party against whom the evidence is offered, and the
latter fails to produce it after reasonable notice, as in
the case of respondent bank.
However, the petition should still fail.
The presumption created by the Art. 1271 of the Civil
Code is not conclusive but merely prima facie. If there
be no evidence to the contrary, the presumption
stands. Conversely, the presumption loses its legal
efficacy in the face of proof or evidence to the
contrary. In the case at bar, despite the delivery of
promissory 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.
Article 1271 of the Civil Code raises a
presumption, not of payment, but of the
renunciation of the credit where more
convincing evidence would be required than
what normally would be called for to prove
payment. The rationale for allowing the presumption
of renunciation in the delivery of a private instrument
is that, unlike that of a public instrument, there could
be just one copy of the evidence of credit. Where
several originals are made out of a private document,
the intendment of the law would thus be to refer to the
delivery only of the original original rather than to the
original duplicate of which the debtor would normally
retain a copy.