G.R. No. 157040; February 12, 2008
JERRYCO C. RIVERA, petitioner, vs. HON. COURT OF APPEALS, SPS. JOSE N. PINEDA and CORAZON PINEDA, respondents.

FACTS

Spouses Jose and Corazon Pineda and Jerryco C. Rivera entered into a “Deed of Mortgage with Irrevocable Option to Buy” over a parcel of land. For a consideration of P400,000, the property was mortgaged to Rivera, who was granted the option to purchase it for an additional P500,000, payable in six installments. Rivera took possession and paid the first three installments. For the fourth installment, he made a partial cash payment and issued a check for the balance, which was dishonored but later replaced with cash. He failed to pay the final two installments. The Spouses Pineda sent a notice of rescission and tendered the return of the P400,000, which Rivera refused, prompting the spouses to file a complaint for rescission.
Rivera claimed he had fully paid the option price, presenting a cash voucher dated June 15, 1987, purportedly signed by Corazon Pineda, acknowledging receipt of P300,000 for the last three installments. The Spouses Pineda contested the voucher, alleging forgery and intercalation. The NBI found the signature genuine but concluded that the typewritten entries for the amounts “P245,000.00” and “P300,000.00” were inserted after the voucher was signed.

ISSUE

Whether the Court of Appeals erred in reversing the trial court and ruling that Rivera failed to prove full payment of the purchase price, thereby upholding the rescission of the contract.

RULING

The Supreme Court affirmed the Court of Appeals’ decision. The legal logic centered on the burden of proof and the evaluation of evidence. Rivera, asserting full payment as a defense, carried the burden to prove it by preponderance of evidence. The pivotal cash voucher was found to be materially altered. While the NBI confirmed the authenticity of Corazon Pineda’s signature, it definitively established that the crucial monetary figures were intercalated subsequent to the signing. This finding destroyed the voucher’s integrity as proof of payment for the specific installments in question.
The Court emphasized that the assessment of evidence by the trial court is not infallible. The Court of Appeals correctly exercised its review power, finding the trial court’s heavy reliance on the altered voucher to be a gross error. With the voucher discredited, Rivera’s claim of overpayment was unsubstantiated. His failure to pay the stipulated installments constituted a breach, which validly entitled the Spouses Pineda to rescind the contract under its terms and pursuant to Article 1191 of the Civil Code. The tender of the P400,000 mortgage debt, coupled with the filing of the complaint, substantially complied with the legal requirements for rescission.