SPS. MANUEL G. RED AND TERESITA RED, PLAINTIFFS-APPELLANTS, VS. SANTIAGO LENDING INVESTOR CORPORATION, ZENAIDA L. ARANZA, AND REGISTER OF DEEDS OF LIPA CITY, DEFENDANTS-APPELLEES,
SORONGON, J.:
“WHEREFORE, premises considered for failure of the plaintiffs to establish by preponderance of evidence their claims agasint the defendants and that they are entitled to the reliefs prayed for, the Complaint is hereby ordered DISMISSED.”
Plaintiffs-appellants, herein referred to as spouses Red, are the registered owners of two parcels of land covered by TCT No. 81856 and T-71602 situated in Barangay Tambo, Lipa City. On August 13, 1993, they obtained a loan of P204,000.00 from defendant-appellee Santiago Lending Corporation (SALICORP for brevity) and to secure payment thereof they executed a Deed of Real Estate Mortgage covering the two (2) parcels of land earlier described. Spouses Red agreed that the loan will be payable in twelve (12) monthly installments at Php17,000.00 per month commencing on September 3, 1993. However, at the very outset, spouses Red already failed in paying their amortization as it fell due every month. Hence, SALICORP instituted an extrajudicial foreclosure proceedings on the mortgaged properties where it emerged the lone bidder at the auction. Consequently, a Certificate of Sale was issued in favor of SALICORP which was duly registered in the Register of Deeds of Lipa City on December 13, 1994.
During the redemption period spouses Red was able to pay SALICORP the amount of Php256,000.00 covered by four (4) Producers Development Bank checks. They asked SALICORP to give them the statement of accounts and the corresponding official receipts representing their payments. SALICORP assured them that it will issue the corresponding certificate of redemption.
However, on November 15, 1996 defendant-appellee Zenaida Aranza executed an Affidavit of Consolidation resulting to the cancellation of TCT Nos. 81856 and T-71602 under the name of spouses Red and the issuance of new Certificate of Title Nos. 107446 and T-107447 in favor of SALICORP.
Spouses Red filed a complaint for cancellation of the new TCTs with Reconveyance and Damages. Defendants-appellees filed a motion to dismiss on October 27, 2003 which the trial court denied by Order[2] dated January 22, 2003.
For their failure to file answer following the denial of their motion to dismiss, defendants-appellees were declared in default per Order[3] dated April 1, 2009. Thus, spouses Red presented their evidence ex parte before the Branch Clerk of Court.
As mentioned earlier, the trial court dismissed the case for failure of spouses Red to establish their case by preponderance of evidence. Hence, this appeal ascribing the following errors:
I. THE LOWER COURT COMMITTED A REVERSIBLE ERROR OF LAW AND GRAVE ABUSE OF DISCRETION IN DISMISSING THE COMPLAINT “FOR FAILURE OF THE PLAINTIFFS TO ESTABLISH BY PREPONDERANCE OF EVIDENCE THEIR CLAIMS AGAINST THE DEFENDANTS.”
II. THE LOWER COURT GRAVELY ERRED AND MISERABLY ERRED IN DISREGARDING THE UNREBUTTED TESTIMONY OF APPELLANT TERESITA RED THAT THE REAL ESTATE MORTGAGE WAS EXECUTED WITHOUT HER KNOWLEDGE AND CONSENT AND THAT HER SIGNATURE WAS FORGED.
It is a basic principle in civil suits that “the party who alleges a fact has the burden of proving it. Burden of proof is the duty of a party to present evidence of the facts in issue necessary to prove the truth of his claim or defense by the amount of evidence required by law[4]. Hence, plaintiff must rely on the strength of his own evidence, not upon the weakness of the defense offered by their opponent[5]. This principle holds true especially when the defendant is declared in default for failure to file its Answer.
Here, notwithstanding the fact that spouses Red presented their evidence ex-parte, they were, however, not discharged from their duty to establish their cause of action by the required quantum of proof in civil cases. True, they were allowed to present ex-parte evidence but still they have to diligently prosecute their case by presenting sufficient evidence to justify a judgment in their favor.
This is the import of the case of Pascua vs. Florendo[6], where the Supreme Court expounded on the concept of judgment by default. Thus:
“complainants are not automatically entitled to the relief prayed for, once the defendants are declared in default. Favorable relief can be granted only after the court has ascertained that the relief is warranted by the evidence offered and the facts proven by the presenting party. In Pascua, this Court ruled that “. . . it would be meaningless to require presentation of evidence if every time the other party is declared in default, a decision would automatically be rendered in favor of the non-defaulting party and exactly according to the tenor of his prayer. This is not contemplated by the Rules nor is it sanctioned by the due process clause.”
Further, the following disquisition of the Supreme Court in the antiquated case of Lim Tanhu v. Ramolete[7] remains to be particularly instructive:
“”Unequivocal, in the literal sense, as these provisions [referring to the subject of default then under Rule 18 of the old Rules of Civil Procedure] are, they do not readily convey the full import of what they contemplate. To begin with, contrary to the immediate notion that can be drawn from their language, these provisions are not to be understood as meaning that default or the failure of the defendant to answer should ‘be interpreted as an admission by the said defendant that the plaintiff’s cause of action find support in the law or that plaintiff is entitled to the relief prayed for.’ . . . .
xxx xxx xxx
“Being declared in default does not constitute a waiver of rights except that of being heard and of presenting evidence in the trial court. . . . .
“In other words, a defaulted defendant is not actually thrown out of court. While in a sense it may be said that by defaulting he leaves himself at the mercy of the court, the rules see to it that any judgment against him must be in accordance with law. The evidence to support the plaintiff’s cause is, of course, presented in his absence, but the court is not supposed to admit that which is basically incompetent. Although the defendant would not be in a position to object, elementary justice requires that only legal evidence should be considered against him. If the evidence presented should not be sufficient to justify a judgment for the plaintiff, the complaint must be dismissed. And if an unfavorable judgment should be justifiable, it cannot exceed in amount or be different in kind from what is prayed for in the complaint.”
That being said, this leads us to the more decisive issue of whether or not spouses Red were able to discharge the onus of proving their case by the quantum of evidence required in civil suits.
In support of their plea for reversal of the trial court’s finding, spouses Red insist that the photocopies of the checks and receipts proffered in the proceedings below are competent evidence to prove the extinguishment of their obligation which the trial court should have considered and given probative weight even if they are merely secondary evidence. These documents, they argued, fall under the exception of the best evidence rule as provided for in Section 5 of Rule 130 of the Rules of Court, thus:
“SEC. 5. When original document is unavailable. — When the original document has been lost or destroyed, or cannot be produced in court, the offeror, upon proof of its execution or existence and the cause of its unavailability without bad faith on his part, may prove its contents by a copy, or by a recital of its contents in some authentic document, or by the testimony of witnesses in the order stated.”
Flowing from the above provision, secondary evidence like photocopies are therefore inadmissible in evidence. However, there are certain instances when secondary evidence will be admitted as evidence in court, in lieu of its originals. Citibank vs. Teodoro[8] teaches us that,
“According to Sections 3 and 5 of Rule 130 of the Rules of Court, whenever the subject of inquiry is the content of a document, its original must be produced, as it is the best evidence to prove such content. Secondary evidence, like the subject photocopies, is inadmissible. It will be admissible only if the offeror proves (a) any of the exceptions enumerated in Section 3 and (b) the conditions for its admissibility set forth in Section 5 of Rule 130. For secondary evidence to be admissible, there must be satisfactory proof of (1) the due execution of the original; (2) the original’s loss, destruction or unavailability that is not due to the offeror’s bad faith; and (3) reasonable diligence and good faith in the search for or attempt to produce the original.”
In other words, spouses Red must prove by preponderance of evidence the following conditions sine qua non before the photocopies of the checks and receipts could be admitted by the court and given probative value, to wit: (1) the existence or due execution of the original; (2) the loss and destruction of the original or the reason for its non production in court; and (3) on the part of the offeror, the absence of bad faith to which the unavailability of the original can be attributed[9].
Here, to establish the existence and due execution of the subject documents, plaintiffs-appellants offered the testimony of Manuel Martin Red that his father (Manuel G. Red) was able to pay substantial amount of money to redeem the subject property from SALICORP. He identified photocopies of the checks issued by his father to pay off their loan obligation as well as the receipts provided by SALICORP showing proof of payment. To some extent, he may have proven that his father issued checks to SALICORP and corresponding receipts were issued by its cashier. However, there is no clarity and certainty whether the photocopied checks and receipts presented in court are the very same checks issued by his father to SALICORP and the receipts are the very same receipts issued by the cashier. They could have subpoenaed the cashier of SALICORP to corroborate the storyline of Manuel G. Red as well as to identify the signature appearing in the receipts. With regard to the subject checks they could have asked for a subpoena duces tecum and ad testificandum to the bank to produce the bank statements, charge invoice and the like just to prove the issuance thereof.
We also noticed that there is no showing that plaintiffs-appellants conducted diligent effort to locate the originals of the checks and receipts. Again they relied on the testimony of Manuel Martin Red that he kept the original documents and placed them inside the cabinet in their house and that he assiduously looked for the documents on the place where he had seen it last but to no avail. It is not the “diligent search” contemplated under the rules. In the case of the Department of Education Culture and Sports v. Del Rosario[10], the Supreme Court held that,
“a party must first satisfactorily explain the loss of the best or primary evidence before he can resort to secondary evidence. A party must first present to the court proof of loss or other satisfactory explanation for non-production of the original instrument.”
It further continued in this wise,
“After a party establishes the existence and due execution of the document, he must prove that the document was lost or destroyed. The destruction of the instrument —
may be proved by any person knowing the fact. The loss may be shown by any person who knew the fact of its loss, or by any one who had made, on the judgment of the court, a sufficient examination in the place [or] places where the document or papers of similar character are usually kept by the person in whose custody the document lost was, and has been unable to find it; or who has made any other investigation which is sufficient to satisfy the court that the instrument is indeed lost.“[11] (Emphasis is supplied)
On this score, the observation made by the trial court is worth repeating, viz:
“xxx Assuming but without admitting that the said official receipts were issued by defendant SALICORP as shown by the heading and stamp mark “Santiago Lending Investor Corp.” and the signature of the authorized signatory appearing on the face of said official receipts, the plaintiffs did not bother to notify and present as witness the authorized signatory of the said official receipts who is allegedly the cashier of the defendants SALICORP or any duly authorized representative who may have custody over the said official receipts for the purpose of producing duplicate original copies of the same. As a matter of standard practice of every corporation, it is a common knowledge that every corporation also retains copies of duplicate original of its issued official receipts relative to its day to day business dealings and transactions. Xxx No reasonable and justifiable explanation was made by the plaintiffs for the Court to warrant presentation of secondary evidence as required by the rules and prevailing jurisprudence. xxx”[12]
The testimony of Teresita Red that her signature in the Deed of Real Estate Mortgage was forged is completely unavailing. She could have raised this issue a long time ago after she discovered the existence of the Real Estate Mortgage. As aptly articulated by the trial court:
“xxx Taking the above circumstances into consideration, the Court is now therefore puzzled why only during the time that she testified that plaintiff Teresita A. Red was denying her signature in the Deed of Real Estate Mortgage, averring that the same was forged and she did not consent to the Deed of Real Estate Mortgage. Assuming but without admitting that the allegations of plaintiff Teresita A. Red are true, she could have earlier questioned the transaction done by her husband Manuel Red and defendant SALICORP and invoked such grounds to nullify or annul (as the case may be ) the mortgage contract and the subsequent proceedings held thereafter as the best and ultimate recourse to protect her rights and interests over the subject properties, instead of giving her conformity by signing the verification and certification in the Complaint.”
In fine, we wind up stressing the legal maxim that the one who pleads payment has the burden of proving it and the best evidence of such is the check issued for that purpose as well as the receipts which acknowledged the acceptance of the same. Regrettably, the documentary evidence at bar, being mere machine copies of the originals and are considered secondary evidence cannot be given probative value considering that the rule of its admissibility was not duly accomplished. The factual findings of the trial court were based on spouses Red’s failure to establish their case by preponderance of evidence required in civil cases, We thus, affirm.
WHEREFORE, the appeal is DENIED and the assailed decision dated May 2, 2011 dismissing the complaint is AFFIRMED.
SO ORDERED.
[*]Gonzales-Sison, (Acting Chairperson), and [**]Ybañez, JJ., concur.
[*] Acting Chairperson per Office Order No. 485-14 -RSF dated November 24, 2014
[**] Acting Senior Member per Office Order No. 485-14 -RSF dated November 24, 2014
[1] Rollo, pp. 65-81
[2] Records, pp. 57-58
[3] Records, p. 174
[4] Section 1, Rule 131 of the Rules of Court
[5] Saguid vs. Court of Appeals, 451 Phil 825
[6] 220 Phil 588
[7] 66 SCRA 425
[8] G.R. No. 150905, September 23, 2003
[9] Santos vs. Court of Appeals, 368 SCRA 91
[10] G.R. No. 146586, January 26, 2005
[11] Ibid.
[12] Assailed Decision, Supra at note 1