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TAN SHUY v. SPS. GUILLERMO MAULAWIN

FACTS:

Petitioner Tan Shuy is a copra and corn buyer who issues a pesada, a document containing transaction details, when purchasing these commodities. Respondent Guillermo Maulawin is a farmer-businessman who borrowed money from Tan Shuy and agreed to repay the loan and sell copra to the petitioner. Tan Shuy claimed Guillermo did not fully compensate the outstanding loan balance, while Guillermo argued that he had already made complete payments through copra deliveries. The trial court favored Tan Shuy, ruling that the copra deliveries should count as installment payments for the loan. The Court of Appeals upheld the trial court's decision. Tan Shuy appealed to the Supreme Court, bringing up concerns about pesada authenticity and the utilization of copra deliveries as loan payment.

ISSUES:

  1. Whether the lower courts erred in giving evidentiary weight to the pesadas presented by the defendant

  2. Whether the plaintiff is estopped from questioning the authenticity of the pesadas

  3. Whether the subsequent arrangement between Tan Shuy and Guillermo can be considered as dation in payment.

  4. Whether Tan Shuy has fully paid the amount of the loan.

  5. Whether the payment made by Guillermo from the proceeds of the copra deliveries should be deducted from the total amount of the loan.

  6. Whether the Court of Appeals erred in affirming the dismissal of the petitioner's complaint for lack of cause of action.

RULING:

  1. The lower courts did not commit reversible errors in giving credence and according weight to the pesadas presented by the defendant. Rule 132, Section 20 of the Rules of Court provides two ways to prove the due execution and authenticity of a private document, which include anyone who saw the document executed or written, or evidence of the genuineness of the signature or handwriting of the maker. The trial court found that the due execution and authenticity of the pesadas were established by the plaintiff's daughter Elena Tan and sometimes by plaintiff's son Vicente Tan. Therefore, the pesadas were deemed sufficient proof of the facts contained therein.

  2. The plaintiff is estopped from questioning the due execution and authenticity of the pesadas. The plaintiff could have easily belied the existence of the pesadas or the purposes for which they were offered as evidence by simply presenting his daughter. However, no effort was made to do so. As a result, the pesadas have been admitted into evidence without objection and are therefore considered sufficient proof of the facts contained therein.

  3. Yes, the subsequent arrangement between Tan Shuy and Guillermo can be considered as dation in payment since the debtor (Guillermo) delivered copra to the creditor (Tan Shuy) and chose not to collect the net proceeds of the copra deliveries, applying them instead as installment payments for his loan from Tan Shuy.

  4. No, Tan Shuy has not fully paid the amount of the loan.

  5. The payment made by Guillermo from the proceeds of the copra deliveries should be deducted from the total amount of the loan.

  6. The Supreme Court affirmed the ruling of the Court of Appeals.

PRINCIPLES:

  • Dation in payment extinguishes the obligation to the extent of the value of the thing delivered.

  • The law on sales applies in cases where the creditor is considered to be buying the thing or property of the debtor in exchange for payment to be charged against the debtor's obligation.

  • Dation in payment can result in partial payment of the loan, with the remaining balance still being owed by the debtor.

  • Lack of cause of action may be a ground for the dismissal of a complaint.

  • The Supreme Court's jurisdiction in a case is limited to reviewing errors of law.