G.R. No. 168959 - Magno vs. Francisco

Case Summary (G.R. No. 168959)

Key Dates and Procedural History

Loan obtained: June 4, 1994. Employer-employee relationship: respondent employed from late 1990 until termination effective January 22, 1999 (received January 23, 1999). Petitioner’s accounting breakdown letter: November 11, 1998. Respondent’s request for benefits breakdown: November 24, 1998. Demand for payment: June 23, 1999. Complaint filed: July 12, 1999. RTC decision: November 22, 2002 (judgment for petitioner). CA decision: October 18, 2006 (reversed in favor of respondent). Supreme Court decision: November 11, 2015. Applicable constitutional framework: 1987 Philippine Constitution (case decided after 1990).

Applicable Law and Legal Principles

Constitutional basis: 1987 Constitution governs judicial review.
Rules of Court provisions relied upon: Rule 45 (certiorari review), Rule 7 (verification/non-forum shopping), Rule 132 (Sections 20 and 22 on proof and genuineness of private documents and handwriting comparison), Rule 131 (Section 3(d) on ordinary care).
Evidentiary and substantive principles applied: burden of proof for payment lies with the party alleging it (debtor when asserting payment); receipts are the best evidence of payment but parol evidence may suffice when receipts are unavailable; private documents must be authenticated before admission; visual comparison of handwriting is permissible and handwriting expert testimony is not indispensable; Supreme Court’s limited review under Rule 45 is confined to questions of law except in recognized exceptions (e.g., conflicting factual findings between trial court and appellate court).

Factual Background and Agreement Terms

Respondent obtained a car loan amounting to P648,288.00 from petitioner in June 1994. The parties agreed that the loan would be payable through deductions from respondent’s bonuses or commissions, and that if respondent were terminated before full payment, the unpaid balance would become immediately due and demandable. The subject vehicle remained in respondent’s possession. Petitioner furnished a breakdown of outstanding obligations showing P418,012.78 on November 11, 1998. Respondent requested a benefits breakdown on November 24, 1998, indicating he intended to deduct what he owed. Petitioner terminated respondent for cause effective January 22, 1999 and demanded payment and surrender of the car, but respondent did not pay. Following repeated demands, petitioner filed suit for the outstanding balance, interest, exemplary damages, attorney’s fees and costs.

Trial Court Findings and Judgment

The RTC found that respondent failed to present evidence proving payment of the loan and that the certification dated September 10, 1996 (purportedly signed by Dy) lacked proven due execution and authenticity. The trial court concluded respondent did not establish that deductions were actually made from his salary or benefits and rendered judgment for petitioner ordering payment of P418,012.78 with interest, exemplary damages (P10,000), attorney’s fees (P20,000) and costs; counterclaims were dismissed.

Court of Appeals Ruling and Rationale

The Court of Appeals reversed the RTC, holding that respondent had fulfilled his loan obligation. The CA relied on three primary bases: (1) the September 10, 1996 certification signed by Dy stating respondent had paid P337,650.00; (2) evidence of salary deductions pursuant to the parties’ agreement; and (3) petitioner’s admission of installment payments totaling P230,275.22. The CA found that Dy did not deny in open court that the signature on the certification was hers and invoked precedent requiring a maker to deny under oath if a document is false.

Issues Before the Supreme Court

Whether respondent had fully paid his loan obligation to petitioner.
Whether the September 10, 1996 certification should be admitted as evidence of payment.

Procedural and Verification Challenges Addressed by the Supreme Court

Respondent alleged procedural defects in the petition (non-compliance with Rule 45 verification and possible forgery of Dy’s signature). The Supreme Court examined signatures and found Dy’s signature on the petition matched the signature in an ex-parte manifestation filed with the CA; Dy did not repudiate the signature in the petition, and respondent did not timely object to the manifestation. The Court therefore declined to dismiss the petition on procedural grounds.

Standard of Review and Exception for Conflicting Findings

The Supreme Court reiterated the Rule 45 principle that it is generally confined to questions of law and not a trier of facts. However, when the RTC and the CA make conflicting factual findings, the Court may re-evaluate the facts under recognized exceptions. Because the RTC and CA reached opposite factual conclusions about whether salary or benefit deductions were actually made and whether respondent had paid the loan in full, the Supreme Court applied that exception and re-examined the factual record.

Admissibility and Authentication of the September 10, 1996 Certification

The Court affirmed the CA’s admission of the certification under Rule 132, Sections 20 and 22. It held that the genuineness of Dy’s handwriting could be established by comparison with other documents the party admits or treats as genuine, and that expert handwriting testimony is not indispensable. Dy’s responses in open court—stating the signature “looks like my signature” rather than a clear denial—and Valle’s testimony that the signature “looked like” Dy’s were sufficient, together with other documents bearing Dy’s signature (e.g., November 11, 1998 letter; termination letter; promissory note; chattel mortgage) to satisfy authentication requirements. Because Dy did not testify to forgery and the signatures bore no substantial doubt, the certification was admissible and proved that respondent had paid P337,650.00 as of its date.

Burden of Proof on Payment and Court’s Analysis of Full Payment Claim

The Court reaffirmed that the debtor asserting payment bears the burden of proving it with legal certainty. Although receipts are the best evidence, parol evidence may suffice where receipts are unavailable. The record, however, contained only the certified amount of P337,650.00; respondent failed to produce receipts, payslips, a reconciled accounting, or independent witnesses to substantiate his claim of full payment of the original P648,288.00. Respondent’s testimony conceded uncertainty—he admitted he only presumed deductions were made because the payslips did not reflect a car-loan field and he could not identify the amounts of bonuses or commissions allegedly applied. The Court emphasized that an agreement to make deductions only shows capacity to pay; it does not by itself prove that deductions were actually made. The failure to secure written acknowledgments or receipts for further payments undermined respondent’s claim, contr

Case Syllabus (G.R. No. 168959)

Facts

Ruel Martinez was the Operations Manager of Multi-International Business Data System, Inc. (petitioner) from late 1990 until January 22, 1999.
On June 4, 1994, respondent applied for and was granted a car loan in the amount of P648,288.00.
The parties agreed that the loan would be payable through deductions from respondent’s bonuses or commissions, if any; and that if respondent were terminated for any cause before the end of the loan term, the unpaid balance would be immediately due and demandable without need of demand.
On November 11, 1998, petitioner sent respondent a letter showing an outstanding obligation of P418,012.78 and detailing bonuses, loans or advances obtained and deducted.
The subject vehicle remained in respondent’s possession.
On November 24, 1998, respondent requested a breakdown of his benefits “in case he will resign,” stating the computation was “only for the assumed amount on my end to deduct whatever I owe the Company.”
On January 22, 1999, petitioner terminated respondent for cause effective immediately, demanding payment of the outstanding loan of P418,012.78 and surrender of the car within three days from receipt; respondent received that letter January 23, 1999.
Respondent did not pay the outstanding balance despite a June 23, 1999 demand from petitioner to pay within three days.
On July 12, 1999, petitioner filed suit in the Regional Trial Court (RTC) of Makati, Branch 148 (Civil Case No. 99-1295), seeking payment of P418,012.78 plus interest, exemplary damages, attorney’s fees and costs.
In his August 28, 1999 answer, respondent alleged he had already paid the loan through deductions from compensation, salaries, bonuses and commissions.
Respondent introduced a certification dated September 10, 1996, signed by petitioner’s president, Helen Dy, stating respondent had made total payments as of that date in the amount of P337,650.00 for the car purchase through ISA Savings Bank; photocopies of validated official receipts from ISA Savings Bank were allegedly attached to that certification.
The parties had a promissory note dated June 17, 1994 and a chattel mortgage dated June 27, 1994 related to the car loan.

Procedural History

RTC (Branch 148, Makati) trial on petitioner’s complaint; witnesses testified and documentary evidence was presented, including the September 10, 1996 certification.
RTC rendered judgment in favor of petitioner on November 22, 2002, ordering respondent to pay P418,012.78 plus 12% interest from June 23, 1999 until full payment, exemplary damages of P10,000, attorney’s fees of P20,000, dismissing counterclaims, and awarding costs.
Respondent filed a motion for reconsideration on December 16, 2002; the motion was denied by the RTC on March 22, 2004.
Respondent appealed to the Court of Appeals (CA), docketed as CA G.R. CV No. 82686.
On October 18, 2006, the CA reversed the RTC and dismissed the complaint, holding respondent had fulfilled his loan obligation; the CA relied on (1) the September 10, 1996 certification signed by Dy, (2) alleged deduction of monthly installments from respondent’s salary, and (3) petitioner’s admission of installment payments totaling P230,275.22.
Petitioner filed a petition for review on certiorari under Rule 45 in the Supreme Court seeking annulment and setting aside of the CA Decision.

Issues Presented

Whether respondent has fulfilled his obligation with petitioner (i.e., whether the car loan has been fully paid).
Whether the certification dated September 10, 1996 should be admitted as basis for respondent’s payment of his loan with petitioner.

Technical and Preliminary Matters: Verification / Certification on Non‑Forum Shopping

Respondent alleged the petition should be dismissed for failure to comply with Section 4, Rule 45 in relation to Sections 4 and 5, Rule 7 of the Rules of Court, asserting Dy’s signature in the petition’s Verification/Certification differs from her signature in other documents.
The Supreme Court examined the record and found Dy’s signature in the petition to be the same as her signature in petitioner’s Ex‑Parte Manifestation of Compliance filed with the CA; respondent never objected to that Ex‑Parte Manifestation and Dy did not refute the signature in the petition.
The Court therefore found no ground to dismiss the petition on the basis of the alleged signature discrepancy.

Standard of Review / Review of Factual Findings

The Court reiterated the settled rule that under Rule 45 only questions of law may be raised and that the Supreme Court is not a trier of facts; CA factual findings are binding when supported by substantial evidence.
The Court identified conflicting factual findings between the RTC and the CA regarding whether respondent had fully paid the car loan.
Citing recognized exceptions to the rule of non‑review of facts, the Court concluded that the conflicting findings constituted an exception permitting re‑evaluation of the facts, thus allowing the Supreme Court to reassess the evidence on payment.

Admissibility and Authentication of the September 10, 1996 Certification

The Court affirmed the CA’s finding that the September 10, 1996 certification is admissible in evidence.
The Court relied on Section 22, Rule 132 of the