Case Summary (G.R. No. 82797)
Factual Background: Lease, Default, and MTC Judgment
Roces‑Reyes (lessor) and GEE (lessee) entered a three‑year lease (monthly rental P65,000). GEE allegedly defaulted on rent beginning March 1983. Roces‑Reyes filed an unlawful detainer action against GEE and Lim Ka Ping. The Metropolitan Trial Court (MTC) rendered judgment (April 17, 1984) ordering the defendants to vacate the premises, to pay monthly rentals from March 1983 until surrender of possession, plus P5,000 attorney’s fees and costs.
Procedural History: Appeals, Writs of Execution, and Motions to Quash
Roces‑Reyes moved for execution (May 16, 1984). GEE opposed and filed a notice of appeal (May 28, 1984). The trial court granted the motion for issuance of a writ of execution for lack of a supersedeas bond and issued a writ on June 14, 1984. GEE later withdrew its appeal (motion filed August 15, 1984), and records were remanded. Roces‑Reyes procured an alias writ of execution (dated February 25, 1985, implemented February 27, 1985). GEE moved to quash the alias writ and sought restraining orders; the MTC issued a restraining order pending resolution. The MTC ultimately denied the motion to quash (Resolution of April 8, 1985). The case proceeded to the Regional Trial Court (RTC), which on April 6, 1987 found the judgment obligation fully satisfied based on certain exhibits and reversed the MTC resolution. The Court of Appeals reversed the RTC and reinstated the MTC resolution denying the quashal. The Supreme Court was then petitioned for review.
Central Legal Issue Presented
Whether the judgment debt in favor of Roces‑Reyes Realty, Inc. had been fully satisfied such that the alias writ of execution should be quashed.
Documentary Evidence Offered by Petitioners
Petitioners relied principally on two common exhibits: a receipt (Exhibit 1/A) acknowledging payment of P1,000,000, and a pacto de retro sale (Exhibit 2/B) involving another P1,000,000, together totaling P2,000,000. Petitioners claimed those instruments showed full satisfaction (or overpayment) of the judgment debt (judgment debt being P1,560,000).
Court of Appeals and Supreme Court Assessment of the Exhibits
The Court of Appeals, and ultimately the Supreme Court, scrutinized the exhibits and found them lacking any writing expressly referring to settlement or payment of the judgment obligation to Roces‑Reyes Realty, Inc. The receipt (Exhibit 1/A) did not indicate that payment was made to the corporation, nor that it was payment, full or partial, of the judgment sum. The pacto de retro sale was executed in favor of Jesus Marcos Roces and Marcos V. Roces personally, not in favor of the corporate judgment creditor. The receipt and sale instruments therefore did not on their face evidence extinguishment of the corporate debt.
Corporate Personality and Relevance of the Payee’s Capacity
The Court reiterated the settled principle that a corporation is a juridical entity distinct from its stockholders and officers. Payments made to individual stockholders or officers are not ipso facto payments to the corporation. The record showed the Roces brothers received the amounts in their individual names; one of them denied authority to receive payment on behalf of the corporation and testified that the P1,000,000 receipt evidenced payment of a loan extended by the Roces brothers to Lim Ka Ping. Given the absence of corporate receipting or other written acknowledgment by Roces‑Reyes Realty, Inc., the instruments could not reasonably be construed as extinguishing the corporation’s judgment.
Presumptions on Payment and Burden of Proof
The Court applied the disputable presumption under Rule 131, Section 5(f), that money paid to a person is presumed due to that person. This presumption favored the Roces brothers’ claim that the payment was to them individually (e.g., loan repayment). The Court emphasized the well‑established allocation of the burden of proof: where the existence of the debt (here, the judgment) is established, the debtor who asserts payment must prove extinguishment of the obligation. The petitioners (debtor/lessee) failed to discharge this burden because the documents did not show payment to the corporate creditor or an express settlement.
Quantitative Discrepancy and Lack of Supporting Agreement
The aggregate P2,000,000 represented in the exhibits exceeded the judgment sum by P440,000. Petitioners’ explanations (that the excess represented interest and advance rentals for an extension) were unsupported
...continue readingCase Syllabus (G.R. No. 82797)
Citation and Panel
- Reported at 272 Phil. 373, Second Division, G.R. No. 82797, decided February 27, 1991.
- Decision penned by Justice Paras (opinion references Justice Paras as author of the Supreme Court decision).
- The Court's opinion notes that the Court of Appeals decision being reviewed (CA-G.R. No. 11960) was penned by Associate Justice Oscar M. Herrera and concurred in by Associate Justices Leonor Ines Luciano and Justo P. Torres, Jr.
- The Metropolitan Trial Court decision under review was penned by Judge Alicia G. Decano; one trial judge referenced in the caption is Judge Marcelo R. Obien.
Parties and Nature of the Case
- Petitioners: Good Earth Emporium, Inc. (GEE) and Lim Ka Ping.
- Respondents: Honorable Court of Appeals and Roces-Reyes Realty, Inc. (designated in the opinion as ROCES for brevity).
- Nature of the action: Petition for review on certiorari by petitioners from the Court of Appeals decision which reversed an RTC decision and reinstated a Metropolitan Trial Court (MTC) Resolution denying petitioners' motion to quash an alias writ of execution.
Antecedent Facts — Lease Contract and Default
- A Lease Contract dated October 16, 1981, was executed between ROCES (lessor) and GEE (lessee) for a three-year term from November 1, 1981 to October 31, 1984 at a monthly rental of P65,000.00.
- The leased premises was a five-storey building at the corner of Rizal Avenue and Bustos Street, Sta. Cruz, Manila.
- From March 1983 up to the time the complaint was filed, GEE defaulted in payment of rentals.
Unlawful Detainer Action and Initial Judgment
- On October 14, 1984, ROCES filed an ejectment (Unlawful Detainer) case against GEE and Lim Ka Ping.
- After defendants filed responsive pleadings, the lower court (MTC, Manila) on motion of ROCES rendered a judgment on the pleadings dated April 17, 1984, with the dispositive portion ordering:
- Defendants and persons claiming under them to vacate and surrender the premises to plaintiffs;
- Defendants to pay plaintiffs P65,000.00 monthly rental beginning March 1983 until actual vacation and delivery of possession;
- Payment of attorney's fees in the amount of P5,000.00; and
- Payment of costs of suit.
Execution Proceedings, Appeal, and Withdrawal
- ROCES filed a motion for execution on May 16, 1984; GEE opposed the motion on May 28, 1984 and simultaneously filed a Notice of Appeal.
- On June 13, 1984, the trial court granted the motion for issuance of a writ of execution, finding defendants failed to post a supersedeas bond.
- A writ of execution was issued on June 14, 1984.
- The appeal was assigned to the Regional Trial Court (RTC), Manila Branch XLVI; on August 15, 1984, GEE through counsel filed a motion to withdraw the appeal stating satisfaction with the MTC decision; the MTC granted in its Order dated August 27, 1984 and remanded the records to the trial court.
Issuance of Alias Writ, Motions to Quash, and Restraining Orders
- On ex parte motion of ROCES, the trial court issued an Alias Writ of Execution dated February 25, 1985, implemented on February 27, 1985.
- GEE, through counsel, filed a Motion to Quash the writ of execution and Notice of Levy on March 7, 1985, and an Ex-parte Supplemental Motion for issuance of a restraining order on March 20, 1985.
- On March 21, 1985, the lower court issued a restraining order directing the sheriff to hold execution pending hearing on the motion to quash.
- While the motion was pending, GEE filed a Petition for Relief from Judgment before RTC Manila Branch IX (Civil Case No. 85-30019); that petition was dismissed and the injunctive writ in connection therewith was set aside. Both parties appealed that dismissal to the Court of Appeals (docketed CA-G.R. No. 15873-CV).
Metropolitan Trial Court Resolution (April 8, 1985)
- After hearing and disposition of other incidents, the MTC promulgated the challenged Resolution dated April 8, 1985, which disposed:
- "Premises considered, the motion to quash the writ is hereby denied for lack of merit. The restraining orders issued on March 11 and 23, 1985 are hereby recalled, lifted and set aside."
- GEE appealed the MTC Resolution.
Subsequent RTC Proceedings, Determination of Payment, and Conflict of Jurisdiction
- GEE's appeal was raffled to RTC Branch IX initially; Roces moved to dismiss the appeal but the motion was denied.
- On certiorari, the Court of Appeals dismissed Roces' petition and remanded the case to the RTC.
- Branch IX later became vacant; the case was re-raffled to Branch XLIV (referred to as Branch XLIV in the record).
- On April 6, 1987, the Regional Trial Court (Manila) found that amounts evidenced by Exhibit "1" (P1 million) and by the pacto de retro sale instrument Exhibit "2" (another P1 million) were in full satisfaction of the judgment obligation, and reversed the MTC Resolution. The RTC dispositive portion reads in substance:
- "Premises considered, judgment is hereby rendered reversing the Resolution appealed from quashing the writ of execution and ordering the cancellation of the notice of levy and declaring the judgment debt as having been fully paid and/or liquidated."
Court of Appeals Reversal and Reinstatement of MTC Resolution
- On further appeal, the Court of Appeals reversed the RTC decision and reinstated the MTC Resolution dated April 8, 1985.
- Dispositive portion of the Court of Appeals decision:
- "WHEREFORE, the judgment appealed from is hereby REVERSED, and the Resolution dated April 8, 1985, of the Metropolitan Trial Court of Manila Branch XXXIII is hereby REINSTATED. No pronouncement as to costs."
- GEE's Motion for Reconsideration filed April 5, 1988 was denied.
Present Petition and Central Issue
- Petitioners (GEE and Lim Ka Ping) filed a petition for review on certiorari to the Supreme Court from the Court of Appeals decision.
- The central issue presented to the Supreme Court: Whether there was full satisfaction of the judgment debt in favor of ROCES-Reyes Realty, Inc., sufficient to justify quashing of the Alias Writ of Execution.
Exhibits and Documentary Evidence in Contention
- Common exhibits at issue are Exhibit 1/A (a receipt dated September 20, 1984 per the record) and Exhibit 2/B (a pacto de retro sale).
- Key characteristics and contested facts concerning the exhibits:
- Neither Exhibit 1 nor Exhibit 2 co