G.R. No. 4414 - Chua Chienco vs. Vargas

On July 22, 1904, an attorney for the plaintiff, Sua Tico (later amended to Chua Tinco, alias Tima or Chua Chienco), filed a complaint in the Court of First Instance of Occidental Negros against Angel Vargas.
The complaint alleged that between January 12 and March 17, 1902, Vargas received money amounting to 2,082.50 pesos from the plaintiff, as evidenced by several vales of indebtedness, and that partial payment (700 pesos) had been made.
The remaining balance of 1,382.50 pesos was claimed to be due, since the debtor did not pay the full amount and had even attempted to conceal assets by moving to Bacolod.

The plaintiff’s counsel initially filed the complaint under the mistaken name "Sua Tico" and subsequently moved, on August 14, 1904, based on Section 110 of the Code of Civil Procedure, to amend the name to Chua Tinco, alias Tima.
On August 18, the court overruled the defendant’s demurrer and permitted the amendment.
The defendant responded on August 23, alleging that there was a current account between him and the plaintiff and that by drawing three drafts (each for 500 pesos issued on October 18, November 16, and December 16, 1902) he had effectively discharged his obligation or even created a credit balance.

The plaintiff and the defendant engaged in a series of business transactions in 1902 evidenced by:

The issuance of various vales reflecting amounts advanced by the plaintiff.
A liquidation of the account made in March 1902 showing the outstanding balance of 1,382 pesos after deducting a vale of 50 cents and partial payment of 700 pesos.

The defendant attempted to offset his debt by referring to the drafts he drew against the firm Hijos de I. de la Rama, claiming that these drafts satisfied part or all of his indebtedness.
Witnesses, including Dian Congo (alias Onga), testified that:

The drafts drawn in October and December were paid in cash by the plaintiff upon receipt.
The November draft resulted in only a partial cash payment (400 pesos in cash with the remaining 100 pesos credited to his account).

The court found that the debt, proven by the admitted vales numbered 2, 3, 4, 5, and 6, was genuine and backed by competent documentary evidence.
The defendant’s claim that the drafts extinguished his debt went unproven, as he failed to secure corresponding receipts from the plaintiff at the time the drafts were issued.

Whether the documentary evidence (vales and account records) sufficiently established the existence of the debt amounting to 1,382.50 pesos.

Did the documents and liquidation of accounts presented by the plaintiff prove that the debtor owed the claimed amount?
Was the acknowledgment of the vales by the defendant adequate to establish the debt?

Whether the defendant’s alleged credits via the issuance of drafts for 500 pesos each could constitute payment or partial satisfaction of his indebtedness.

Can the use of drafts, without proper receipts or demand for their return, be accepted as valid discharge of debt?
Does the evidence support the defendant’s contention of having a credit against the plaintiff due to these drafts?

The proper application of the principles of payment where a debt is considered paid only upon the complete discharge of the obligation.