G.R. No. L-43503 October 31, 1990
LEONOR J. BIALA, petitioner, vs. COURT OF APPEALS (Fourth Division) and MARIA P. LEE, respondents.

FACTS

On November 3, 1970, private respondent Maria P. Lee filed a collection suit against petitioner Leonor J. Biala for the sum of P31,338.76. The claim was based on multiple causes of action evidenced by several deeds of real estate mortgage and promissory notes executed by Biala in favor of Lee between 1956 and 1963. Biala, in her answer, denied the allegations. She contended that for the first mortgage of P12,000, she only actually received P2,000, as shown by Lee’s own affidavit. She further claimed that some obligations had been settled, others had prescribed, and for the remaining promissory notes, she never received the stated amounts.
The trial court dismissed Lee’s complaint on the ground of prescription. It also awarded damages and attorney’s fees in favor of Biala. On appeal, the Court of Appeals reversed the trial court’s decision. It ordered Biala to pay Lee the principal amount of P28,215.46 with interest, attorney’s fees, and costs. The appellate court found that the action had not prescribed and that Biala failed to substantiate her defenses of payment and non-receipt of the loan proceeds.

ISSUE

The core issues are: (1) whether the action is barred by laches; (2) whether the Court of Appeals erred in discarding Biala’s evidence and crediting Lee’s testimony and documentary evidence; and (3) whether Biala is entitled to judicial protection under Article 24 of the Civil Code.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. On the issue of laches, the Court held its elements were not present. Laches requires delay by the claimant, coupled with a change in the defendant’s position causing prejudice. The Court found no such prejudice to Biala from Lee’s filing of the suit. The mere passage of time, without a showing of injury or change of circumstances, does not constitute laches.
Regarding the evidence, the Court upheld the appellate court’s factual findings. It ruled that the affidavit executed by Lee, stating Biala received only P2,000 for the P12,000 mortgage, was correctly disregarded. The affidavit was properly contradicted and explained by Lee’s subsequent court testimony, which is allowed under the rule of viva voce evidence. The promissory notes and mortgage deeds in Lee’s possession constituted prima facie evidence of the debt. The burden to prove the defense of payment shifted to Biala, which she failed to discharge by presenting receipts or other satisfactory evidence. The Supreme Court reiterated that factual findings of the Court of Appeals are generally conclusive.
Finally, the plea for judicial protection under Article 24 of the Civil Code, based on Biala’s claim of being poor and illiterate versus Lee being a prosperous businesswoman, was rejected. The Court emphasized that justice must be administered according to the law and established evidence, not on emotional appeals or perceived disparities in the parties’ status. The law’s mandate must be followed as long as it is in force.