G.R. No. L-16477. May 31, 1961.
MANILA TRADING & SUPPLY CO., plaintiff-appellee, vs. MARIANO MEDINA, defendant-appellant.

FACTS

Plaintiff Manila Trading & Supply Co. filed a complaint for collection against defendant Mariano Medina based on a promissory note for P60,000.00, payable in monthly installments. The complaint alleged Medina defaulted on installments from September 1956 to January 1957, making the entire balance due. Medina, in his answer, admitted the execution of the note, the default, and the outstanding balance, but contested the stipulated 33-1/3% attorney’s fees as exorbitant. He also raised a defense of a subsequent payment agreement and filed a counterclaim for substantial damages due to the attachment of his buses.
At trial, the plaintiff presented evidence of payments received. Medina, seeking to prove he was not in default, presented ten additional receipts to show more payments. These receipts were mutilated, lacking serial numbers and year dates, which Medina claimed were eaten by termites. He attempted to reconstruct their sequence from a personal memorandum. The plaintiff’s witness rebutted this, testifying the receipts did not correspond to the note’s period, noting a change in receipt format and numbering system in July 1956, and that the purported sequence was inconsistent.

ISSUE

Whether the trial court erred in rejecting the ten additional receipts presented by Medina and in consequently finding him liable for the unpaid balance on the promissory note.

RULING

The Supreme Court affirmed the trial court’s decision, finding no error in its rejection of the disputed receipts and its judgment in favor of the plaintiff. The legal logic rests on the evaluation of evidence and the effect of judicial admissions. Medina’s answer constituted a judicial admission of the essential facts of the plaintiff’s cause of action: the note’s existence, his default on the specified installments, and the resulting balance due. These admissions, which were never withdrawn or amended, bound him and relieved the plaintiff of the duty to prove those facts.
The Court upheld the trial court’s factual findings on the unreliability of the ten receipts. The evidence clearly showed irreconcilable inconsistencies: the mutilation suspiciously affected only the critical data (numbers and years) on the disputed receipts; their physical characteristics matched pre-July 1956 forms, not the new format used during the relevant period; and the serial numbers Medina attributed to them were illogical and out of sequence compared to the authenticated receipts, making it improbable for a business to issue receipts so randomly. The mere authenticity of the signatures on them did not prove they were issued for payments on the subject note during 1956-1957. Given Medina’s binding admissions and the dubious nature of his proffered evidence, the trial court correctly found the plaintiff’s claim duly proven. The award was modified only by reducing the attorney’s fees. The counterclaim for damages was implicitly denied due to the validity of the attachment arising from a valid cause of action.