SPOUSES
ANTONIO and LOLITA TAN, petitioners, vs. CARMELITO VILLAPAZ, respondent
G.R. No.
160892 November 22, 2005
FACTS:
On February
6, 1992, respondent issued a Philippine Bank of Communications (PBCom) crossed
check in the amount of P250,000.00, payable to the order of petitioner Tony
Tan. On even date, the check was deposited at the drawee bank, PBCom Davao City
branch at Monteverde Avenue, to the account of petitioner Antonio Tan also at said
bank.
On November
7, 1994, respondent filed before the Digos, Davao del Sur RTC a Complaint for
sum of money against petitioners-spouses, alleging that, inter alia, on February
6, 1992, petitioners-spouses repaired to his place of business at Malita, Davao
and obtained a loan of P250,000.00, hence, his issuance of the February 6, 1992
PBCom crossed check which loan was to be settled interest- free in six (6)
months; on the maturity date of the loan or on August 6, 1992, petitioner
Antonio Tan failed to settle the same, and despite repeated demands,
petitioners never did, drawing him to file the complaint thru his counsel to whom
he agreed to pay 30% of the loan as attorney’s fees on a contingent basis and
P1,000.00 per appearance fee; and on account of the willful refusal of
petitioners to honor their obligation, he suffered moral damages in the amount of
P50,000.00, among other things.
Petitioners,
denying having gone to Malita and having obtained a loan from respondent. They
alleged that the check was issued in exchange for equivalent cash; they never
received from respondent any demand for payment, be it verbal or written,
respecting the alleged loan; since the alleged loan was one with a
period·payable in six months, it should have been expressly stipulated upon in
writing by the parties but it was not, hence, the essential requisite for the validity
and enforceability of a loan is wanting; and the check is inadmissible to prove
the existence of a loan for P250,000.00.
The trial
court ordered the dismissal of the complaint.
Respondent
appealed to the CA which credited his version and reversed the trial court’s
decision. The Court ruled that the lower court misplaced its reliance on
Article 1358 of the Civil Code providing that to be enforceable, contracts where
the amount involved exceed five hundred pesos, must appear in writing. It ruled
that the existence of a contract of loan cannot be denied merely because it is
not reduced in writing.
Hence, this
petition. Petitioners maintain that they did not secure a loan from respondent,
insisting that they encashed in Davao City respondent’s February 6, 1992
crossed check; in the ordinary course of business, prudence dictates that a contract
of loan must be in writing as in fact the New Civil Code provides that to be
enforceable „contracts where the amount involved exceed[s] P500.00 must appear
in writing even a private one, hence, respondent’s self-serving claim does not
suffice to prove the existence of a loan.
ISSUE:
Whether the
transaction in dispute was a contract of loan or a mere matter of check
encashment
RULING:
Petitioner’s
version was correctly denied credit by the appellate court..
That apart
from the check no written proof of the grant of the loan was executed was
credibly explained by respondent when he declared that petitioners’ son being
his godson, he, out of trust and respect, believed that the crossed check
sufficed to prove their transaction.
As for petitioners’
reliance on Art. 1358 of the Civil Code, the same is misplaced for the
requirement that contracts where the amount involved exceeds P500.00 must
appear in writing is only for convenience.
A check,
the entries of which are no doubt in writing, could prove a loan transaction.
That
petitioner Antonio Tan had, on February 6, 1992, an outstanding balance of more
than P950,000.00 in his account at PBCom Monteverde branch where he was later
to deposit respondent’s check did not rule out petitioners’ securing a loan. It
is pure naivete to believe that if a businessman has such an outstanding
balance in his bank account, he would have no need to borrow a lesser amount.
In fine, as
petitioners’ side of the case is incredible as it is inconsistent with the principles
by which men similarly situated are governed, whereas respondent’s claim that the
proceeds of the check, which were admittedly received by petitioners,
represented a loan extended to petitioner Antonio Tan is credible, the
preponderance of evidence inclines on respondent.
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