G.R. No. 157836 ; May 26, 2005
NOEMI M. CORONEL, petitioner, vs. ENCARNACION C. CAPATI, respondent.

FACTS

Petitioner Noemi Coronel obtained two loans from respondent Encarnacion Capati, evidenced by handwritten receipts dated September 4, 1992 (P121,000) and October 25, 1992 (P363,000). Each receipt was signed by Coronel and stated the loan was secured by a specific postdated Metrobank check. Upon maturity, Coronel failed to pay. The checks were dishonored upon presentment. Capati filed a complaint for sum of money. The Regional Trial Court ruled in favor of Capati, a decision affirmed by the Court of Appeals.
Coronel denied the existence of these specific loans. She claimed the two checks were part of security for a larger, separate loan of P1.101 million, which she had fully settled. She alleged the loan receipts (Exhibits A-1 and B-1) were fabricated by Capati on pre-signed blank papers. To prove payment of the larger loan, Coronel presented a receipt for a P1 million payment and testified about other cash payments. She argued the two disputed checks represented interest for the larger loan and should have been returned upon its full payment.

ISSUE

Whether the Court of Appeals erred in affirming the trial court’s finding that petitioner is liable to pay respondent the loan amounts covered by the two promissory notes.

RULING

The Supreme Court denied the petition and affirmed the lower courts’ decisions. The Court upheld the existence and validity of the two distinct loan obligations. The handwritten receipts (Exhibits A-1 and B-1), bearing Coronel’s uncontested signature, constituted clear documentary evidence of the loans. The Court found Coronel’s defense of payment unsubstantiated.
The legal logic rests on the principles of evidence and the burden of proof. The creditor (Capati) satisfactorily established the existence of the debt through the signed instruments. Consequently, the burden shifted to the debtor (Coronel) to prove the defense of extinguishment by payment with legal certainty. The Court found her evidence insufficient. Her claim of a single, fully paid consolidated loan was inconsistent and unsupported by convincing proof. Notably, she failed to demand the return of the two specific checks if they were merely security for a paid obligation, unlike her documented retrieval of other checks upon settlement. Her bare allegation of fabricated documents was outweighed by the authenticity of her signatures on the receipts. Therefore, having failed to discharge her burden of proving payment, Coronel remained liable for the two loans, plus interest and attorney’s fees as awarded.