Republic of the Philippines
Supreme Court
Manila

SECOND division

tan shuy, Petitioner, - versus - spouses guillermo maulawin and parIng cario-maulawin, Respondents.

G.R. No. 190375 Present: CARPIO, J., Chairperson, BRION, PEREZ, SERENO, and REYES, JJ. Promulgated: February 8, 2012

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D e c i s i o n

SERENO, J.:

Before the Court is a Petition for Review on Certiorari filed under Rule 45 of the Rules of Court, assailing the 31 July 2009 Decision and 13 November 2009 Resolution of the Court of Appeals (CA).[1]

Facts

Petitioner Tan Shuy is engaged in the business of buying copra and corn in the Fourth District of Quezon Province. According to Vicente Tan (Vicente), son of petitioner, whenever they would buy copra or corn from crop sellers, they would prepare and issue a pesada in their favor. 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. He then explained that 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 petitioner.[2]

Guillermo Maulawin (Guillermo), respondent in this case, is a farmer-businessman engaged in the buying and selling of copra and corn. On 10 July 1997, Tan Shuy extended a loan to Guillermo in the amount of ₱420,000. In consideration thereof, Guillermo obligated himself to pay the loan and to sell lucad or copra to petitioner. Below is a reproduction of the contract:[3]

N^o2567	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.
P................	[Sgd. by respondent] . Lagda

Most of the transactions involving Tan Shuy and Guillermo were coursed through Elena Tan, daughter of petitioner. She served as cashier in the business of Tan Shuy, who primarily prepared and issued the pesada. In case of her absence, Vicente would issue the pesada. He also helped his father in buying copra and granting loans to customers (copra sellers). According to Vicente, part of their agreement with Guillermo was that they would put the annotation sulong on the pesada when partial payment for the loan was made.

Petitioner alleged that despite repeated demands, Guillermo remitted only ₱23,000 in August 1998 and ₱5,500 in October 1998, or a total of ₱28,500.[4] He claimed that respondent had an outstanding balance of ₱391,500. Thus, convinced that Guillermo no longer had the intention to pay the loan, petitioner brought the controversy to the Lupon Tagapamayapa. When no settlement was reached, petitioner filed a Complaint before the Regional Trial Court (RTC).

Respondent Guillermo countered that he had already paid the subject loan in full. According to him, he continuously delivered and sold copra to petitioner from April 1998 to April 1999. Respondent said they had an oral arrangement that the net proceeds thereof shall be applied as installment payments for the loan. He alleged that his deliveries amounted to ₱420,537.68 worth of copra. To bolster his claim, he presented copies of pesadas issued by Elena and Vicente. He pointed out that 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. He averred that Tan Shuy filed a case against him, because petitioner got mad at him for selling copra to other copra buyers.

On 27 July 2007, the trial court issued a Decision, ruling that the net proceeds from Guillermos copra deliveries represented in the pesadas, which did not bear the notation pd should be applied as installment payments for the loan. It gave weight and credence to the pesadas, as their due execution and authenticity was established by Elena and Vicente, children of petitioner.[5] However, the court did not credit the net proceeds from 12 pesadas, as they were deliveries for corn and not copra. According to the RTC, Guillermo himself testified that it was the net proceeds from the copra deliveries that were to be applied as installment payments for the loan. Thus, it ruled that the total amount of ₱41,585.25, which corresponded to the net proceeds from corn deliveries, should be deducted from the amount of ₱420,537.68 claimed by Guillermo to be the total value of his copra deliveries. Accordingly, the trial court found that respondent had not made a full payment for the loan, as the total creditable copra deliveries merely amounted to ₱378,952.43, leaving a balance of ₱41,047.57 in his loan.[6]

On 31 July 2009, the CA issued its assailed Decision, which affirmed the finding of the trial court. According to the appellate court, petitioner could have easily belied the existence of the pesadas and the purpose for which they were offered in evidence by presenting his daughter Elena as witness; however, he failed to do so. Thus, it gave credence to the testimony of respondent Guillermo in that the net proceeds from the copra deliveries were applied as installment payments for the loan.[7] On 13 November 2009, the CA issued its assailed Resolution, which denied the Motion for Reconsideration of petitioner.

Petitioner now assails before this Court the aforementioned Decision and Resolution of the CA and presents the following issues:

Issues

1. Whether the pesadas require authentication before they can be admitted in evidence, and

2. Whether the delivery of copra amounted to installment payments for the loan obtained by respondents from petitioner.

Discussion

As regards the first issue, petitioner asserts that the pesadas should not have been admitted in evidence, since they were private documents that were not duly authenticated.^[8] He further contends that the pesadas were fabricated in order to show that the goods delivered were copra and not corn. Finally, he argues that five of the pesadas mentioned in the Formal Offer of Evidence of respondent were not actually offered.^[9]

With regard to the second issue, petitioner argues that respondent undertook two separate obligations (1) to pay for the loan in cash and (2) to sell the latters lucad or copra. Since their written agreement did not specifically provide for the application of the net proceeds from the deliveries of copra for the loan, petitioner contends that he cannot be compelled to accept copra as payment for the loan. He emphasizes that the pesadas did not specifically indicate that the net proceeds from the copra deliveries were to be used as installment payments for the loan. He also claims that respondents copra deliveries were duly paid for in cash, and that the pesadas were in fact documentary receipts for those payments.

We reiterate our ruling in a line of cases that the jurisdiction of this Court, in cases brought before it from the CA, is limited to reviewing or revising errors of law.^[10] Factual findings of courts, when adopted and confirmed by the CA, are final and conclusive on this Court except if unsupported by the evidence on record.^[11] There is a question of fact when doubt arises as to the truth or falsehood of facts; or when there is a need to calibrate the whole evidence, considering mainly the credibility of the witnesses and the probative weight thereof, the existence and relevancy of specific surrounding circumstances, as well as their relation to one another and to the whole, and the probability of the situation.^[12]

Here, a finding of fact is required in the ascertainment of the due execution and authenticity of the pesadas, as well as the determination of the true intention behind the parties oral agreement on the application of the net proceeds from the copra deliveries as installment payments for the loan.[13] This function was already exercised by the trial court and affirmed by the CA. Below is a reproduction of the relevant portion of the trial courts Decision:

x x x The defendant further averred that if in the receipts or pesadas issued by the plaintiff to those who delivered copras to them there is a notation pd on the total amount of purchase price of the copras, it means that said amount was actually paid or given by the plaintiff or his daughter Elena Tan Shuy to the seller of the copras. To prove his averments the defendant presented as evidence two (2) receipts or pesadas issued by the plaintiff to a certain Cario (Exhibits 1 and 2 defendant) showing the notation pd on the total amount of the purchase price for the copras. Such claim of the defendant was further bolstered by the testimony of Apolinario Cario which affirmed that he also sell copras to the plaintiff Tan Shuy. He also added that he incurred indebtedness to the plaintiff and whenever he delivered copras the amount of the copras sold were applied as payments to his loan. The witness also pointed out that the plaintiff did not give any official receipts to those who transact business with him (plaintiff). This Court gave weight and credence to the documents receipts (pesadas) (Exhibits 3 to 64) offered as evidence by the defendant which does not bear the notation pd or paid on the total amount of the purchase price of copras appearing therein. Although said pesadas were private instrument their execution and authenticity were established by the plaintiffs daughter Elena Tan and sometimes by plaintiffs son Vicente Tan. x x x.[14] (Emphasis supplied)

In affirming the finding of the RTC, the CA reasoned thus:

In his last assigned error, plaintiff-appellant herein impugns the conclusion arrived at by the trial court, particularly with respect to the giving of evidentiary value to Exhs. 3 to 64 by the latter in order to prove the claim of defendant-appellee Guillermo that he had fully paid the subject loan already.

The foregoing deserves scant consideration.

Here, plaintiff-appellant could have easily belied the existence of Exhs. 3 to 64, the pesadas or receipts, and the purposes for which they were offered in evidence by simply presenting his daughter, Elena Tan Shuy, but no effort to do so was actually done by the former given that scenario.[15] (Emphasis supplied)

We found no clear showing that the trial court and the CA committed reversible errors of law in giving credence and according weight to the pesadas presented by respondents. According to Rule 132, Section 20 of the Rules of Court, there are two ways of proving the due execution and authenticity of a private document, to wit:

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)

As reproduced above, the trial court found that the due execution and authenticity of the pesadas were established by the plaintiffs daughter Elena Tan and sometimes by plaintiffs son Vicente Tan.[16] The RTC said:

On cross-examination, [Vicente] reiterated that he and her [sic] sister Elena Tan who acted as their cashier are helping their father in their business of buying copras and mais. That witness agreed that in the business of buying copra and mais of their father, if a seller is selling copra, a pesada is being issued by his sister. The pesada that she is preparing consists of the date when the copra is being sold to the seller. Being familiar with the penmanship of Elena Tan, the witness was shown a sample of the pesada issued by his sister Elena Tan. x x x

x x x x x x x x x

x x x. He clarified that in the pesada (Exh. 1) prepared by Elena and also in Exh 2, there appears on the lower right hand portion of the said pesadas the letter pd, the meaning of which is to the effect that the seller of the copra has already been paid during that day. He also confirmed the penmanship and handwriting of his sister Ate Elena who acted as a cashier in the pesada being shown to him. He was even made to compare the xerox copies of the pesadas with the original copies presented to him and affirmed that they are faithful reproduction of the originals.[17] (Emphasis supplied)

In any event, petitioner is already estopped from questioning the due execution and authenticity of the pesadas. As found by the CA, Tan Shuy could have easily belied the existence of x x x the pesadas or receipts, and the purposes for which they were offered in evidence by simply presenting his daughter, Elena Tan Shuy, but no effort to do so was actually done by the former given that scenario. The pesadas having been admitted in evidence, with petitioner failing to timely object thereto, these documents are already deemed sufficient proof of the facts contained therein.[18] We hereby uphold the factual findings of the RTC, as affirmed by the CA, in that the pesadas served as proof that the net proceeds from the copra deliveries were used as installment payments for the debts of respondents.[19]

Indeed, pursuant to Article 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.[20] Article 1245 of the Civil Code provides for a special mode of payment called dation in payment (dacin en pago). There is dation in payment when property is alienated to the creditor in satisfaction of a debt in money.[21] Here, the debtor delivers and transmits to the creditor the formers ownership over a thing as an accepted equivalent of the payment or performance of an outstanding debt.[22] In such cases, Article 1245 provides that the law on sales shall apply, since the undertaking really partakes in one sense of the nature of sale; that is, the creditor is really buying the thing or property of the debtor, the payment for which is to be charged against the debtors obligation.[23] 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 equivalent to the obligation, in which case the obligation is totally extinguished.[24]

The trial court found thus:

x x x [T]he preponderance of evidence is on the side of the defendant. x x x The defendant explained that for the receipts (pesadas) from April 1998 to April 1999 he 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. The defendant further averred that if in the receipts or pesadas issued by the plaintiff to those who delivered copras to them there is a notation pd on the total amount of purchase price of the copras, it means that said amount was actually paid or given by the plaintiff or his daughter Elena Tan Shuy to the seller of the copras. To prove his averments the defendant presented as evidence two (2) receipts or pesadas issued by the plaintiff to a certain Cario (Exhibits 1 and 2 defendant) showing the notation pd on the total amount of the purchase price for the copras. Such claim of the defendant was further bolstered by the testimony of Apolinario Cario which affirmed that he also sell [sic] copras to the plaintiff Tan Shuy. He also added that he incurred indebtedness to the plaintiff and whenever he delivered copras the amount of the copras sold were applied as payments to his loan. The witness also pointed out that the plaintiff did not give any official receipts to those who transact business with him (plaintiff). x x x

Be that it may, this Court cannot however subscribe to the averments of the defendant that he has fully paid the amount of his loan to the plaintiff from the proceeds of the copras he delivered to the plaintiff as shown in the pesadas (Exhibits 3 to 64). Defendant claimed that based on the said pesadas he has paid the total amount of P420,537.68 to the plaintiff. However, this Court keenly noted that some of the pesadas offered in evidence by the defendant were not for copras that he delivered to the plaintiff but for mais (corn). The said pesadas for mais or corn were the following, to wit:

x x x x x x x x x

To the mind of this Court the aforestated amount (P41,585.25) which the above listed pesadas show as payment for mais or corn delivered by the defendant to the plaintiff cannot be claimed by the defendant to have been applied also as payment to his loan with the plaintiff because he does not testify on such fact. He even stressed during his testimony that it was the proceeds from the copras that he delivered to the plaintiff which will be applied as payments to his loan. x x x Thus, equity dictates that the total amount of P41,585.25 which corresponds to the payment for mais (corn) delivered by the plaintiff shall be deducted from the total amount of P420,537.68 which according to the defendant based on the pesadas (Exhibits 3 to 64) that he presented as evidence, is the total amount of the payment that he made for his loan to the plaintiff. x x x

x x x x x x x x x

Clearly from the foregoing, since the total amount of defendants loan to the plaintiff is P420,000.00 and the evidence on record shows that the actual amount of payment made by the defendant from the proceeds of the copras he delivered to the plaintiff is P378,952.43, the defendant is still indebted to the plaintiff in the amount of P41,047.53 (sic) (P420,000.00-P378,952.43).[25] (Emphasis supplied)

In affirming this finding of fact by the trial court, the CA cited the above-quoted portion of the RTCs Decision and stated the following:

In fact, as borne by the records on hand, herein defendant-appellee Guillermo was able to describe and spell out the contents of Exhs. 3 to 64 which were then prepared by Elena Tan Shuy or sometimes by witness Vicente Tan. Herein defendant-appellee Guillermo professed that since the release of the subject loan was subject to the condition that he shall sell his copras to the plaintiff-appellant, the former did not already receive any money for the copras he delivered to the latter starting April 1998 to April 1999. Hence, this Court can only express its approval to the apt observation of the trial court on this matter[.]

x x x x x x x x x

Notwithstanding the above, however, this Court fully agrees with the pronouncement of the trial court that not all amounts indicated in Exhs. 3 to 64 should be applied as payments to the subject loan since several of which clearly indicated mais deliveries on the part of defendant-appellee Guillermo instead of copras[.][26] (Emphasis supplied)

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 petitioner, 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. We therefore uphold the findings of the trial court, as affirmed by the CA, that the net proceeds from Guillermos copra deliveries amounted to ₱378,952.43. With this partial payment, respondent remains liable for the balance totaling ₱41,047.57.[27]

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.

SO ORDERED.

MARIA LOURDES P. A. SERENO

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO

Associate Justice

Chairperson

ARTURO D. BRION Associate Justice

JOSE PORTUGAL PEREZ Associate Justice

BIENVENIDO L. REYES

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the Opinion of the Courts Division.

ANTONIO T. CARPIO

Associate Justice

Chairperson, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons Attestation, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

RENATO C. CORONA

Chief Justice

---

[1] Both the Decision and Resolution in CA-G.R. CV No. 90070 were penned by Justice Andres B. Reyes, Jr. and concurred in by Justices Fernanda Lampas Peralta and Apolinario D. Bruselas, Jr.

[2] RTC Decision, p. 4; rollo, p. 48.

[3] Petitioners Complaint, Annex E; rollo, p.71.

[4] Petitioners Complaint, pp. 1-2; rollo, pp. 67-68.

[5] RTC Decision, pp. 16-17; rollo, pp. 60-61.

[6] The RTC found that respondents remained indebted to petitioner for the total balance of ₱41,047.53. However, after a re-computation, this Court finds that a simple mathematical error was committed. Respondents balance should be reflected as ₱41,047.57.

[7] CA Decision, pp. 11-12; rollo, pp. 27-28.

[8] Petitioner refers to Exhibits 5, 7, 25, 30, 32, 32-A, 33, 34, 38, 43, 45, and 47. See Tan Shuys Petition for Review on Certiorari, p. 6; rollo, p. 9.

[9] Petitioner refers to Exhibits 65 to 69. See Tan Shuys Petition for Review on Certiorari, p. 6; rollo, p. 9.

[10] Republic v. Regional Trial Court, G.R. No. 172931, 18 June 2009, 589 SCRA 552.

[11] Id.

[12] Guy v. Court of Appeals, G.R. No. 165849, 10 December 2007, 539 SCRA 584; Obando v. People, G.R. No. 138696, 7 July 2010, 624 SCRA 299.

[13] See Bernaldez v. Francia, 446 Phil. 643 (2003)

[14] RTC Decision, pp. 16-17; rollo, pp. 60-61.

[15] CA Decision, pp. 10-11; rollo, pp. 26-27.

[16] RTC Decision, p. 17; rollo, p. 61.

[17] RTC Decision, p. 4; rollo, p. 48.

[18] See Obando v. People, supra note 12; Sy v. Court of Appeals, 386 Phil. 760 (2000), citing Son v. Son, 321 Phil. 951 (1995), Tison v. CA, 342 Phil. 550 (1997), and Quebral v. CA, 322 Phil. 387 (1996).

[19] RTC Decision, pp. 16-18; rollo, pp. 60-62; CA Decision, pp. 10-13; rollo, pp. 26-29.

[20] Civil Code, Art. 1232.

[21] Civil Code, Art. 1245.

[22] Lopez v. Court of Appeals, 200 Phil. 150 (1982), (citing Tolentino, Commentaries & Jurisprudence on the Civil Code of the Philippines, Vol. IV, 276-277 (1962); D. Jos Castn Tobeas, Derecho Civil Espaol, Comn y Foral, Vol. II 525 (6^th ed. 1943); D. Jos Mara Manresa y Navarro, Comentarios al Cdigo Civil Espaol, Vol. VIII 324 (1932)); Aquintey v. Tibong, G.R. No. 166704, 20 December 2006, 511 SCRA 414, citing Jayme v. Court of Appeals, 439 Phil. 192 (2002).

[23] Aquintey v. Tibong, G.R. No. 166704, 20 December 2006, 511 SCRA 414, citing Jayme v. Court of Appeals, 439 Phil. 192 (2002); Civil Code, Art. 1245.

[24] Lopez v. Court of Appeals, L-33157, 29 June 1982, 114 SCRA 671, citing Tolentino, Commentaries & Jurisprudence on the Civil Code of the Philippines, Vol. IV 276-277 (1962); D. Jos Mara Manresa y Navarro, Comentarios al Cdigo Civil Espaol, Vol. VIII 324 (1932); Calixto Valverde y Valverde, Tratado de Derecho Civil Espaol, Vol. II 174(1935)).

[25] RTC Decision, pp. 16-18; rollo, pp. 60-62.

[26] CA Decision, pp. 11-13; rollo, pp. 27-29.

[27] RTC Decision, p. 18; rollo, p. 62; CA Decision, p. 14, rollo, p. 30.