Inadequate proof

Obligations may be extinguished by payment and the burden is on the debtor to prove that (1) the very thing due has been delivered and (2) that it is delivered in its entirety. This is illustrated in this case between the Alfonso and Manalo spouses.

When the Alfonso spouses discovered that the Manalo Couple encroached and occupied 125 square meters of left side portion of their property located in Novaliches without their knowledge and consent, they sued the Manalo couple before the Regional Trial Court (RTC), praying that the latter vacate said portion and return its possession to them. The suit eventually led to a Compromise Agreement (CA) duly approved by the Court.

Under the CA, the Manalo spouses agreed to purchase the 125 sq.m. portion of Alfonso property for the price of P235,294 with an initial payment of P44,117.65 upon the signing on May 7, 1997; another P44,117.65 on or before May 31, 1997; P29,411.75 on or before June 30, 1997; P58,823.50 on or before July 31, 1997 and P58,823.50 on or before August 31, 1997.

Alleging that the Manalo spouses failed to pay the installments particularly those due on July 31 and August 31, 1997, the Alfonso couple filed a Motion for Execution of the CA. This motion was opposed by the Manalos. They said that they have already paid their obligation under the agreement. For the initial payment of P44,117.65 on May 7, 1997, they presented Equitable Bank check no. 1050783228 in the sum of P100,000 issued by a certain Carla Reyes payable to Alfonso but dated September 23,1994 or three years before the CA was signed. For the next payment of P44,117.65 due on May 31, 1997, they presented a check issued by the same Carla Reyes payable to Alonso in the sum of P150,000 but dated April 30,1997. The voucher for this check states that the "same is for partial payment and/or 1st. installment re: CA entered by the spouses Lazaro, Santos and Manalo. The next check dated June 24, 1997 again issued by Carla Reyes has a voucher stating that it is in partial payment of the CA entered by Lazaro, Santos and Manalo. Another check issued by Carla Reyes dated July 29, 1997 for P100,000 payable to Alfonso is accompanied by voucher with the same particulars. A subsequent check again issued by Carla Reyes dated December 24, 1997 in the amount of P50,000 payable to Alfonso is accompanied by a receipt showing that it is a payment for the account of Santos and Lazaro couple. Finally a check this time unaccompanied by any voucher or receipt payable to cash in the amount of P25,000 but dated July 25, 1998, way past the period to make payments as specified in the CA. Were the Manalos able to prove that they have paid their obligation under the CA?

No. They failed to discharge their burden of proving payment. The best proof of the fact of payment is a receipt not a voucher. A receipt is a written and signed acknowledgment that the money has or goods have been delivered while a voucher is a documentary record of a business transaction. A voucher is not necessarily an evidence of payment. It is merely a way or method of recording or keeping track of payments made. The references to alleged check payments in the vouchers presented do not vest them with the character of receipts. The voucher must be supported by an actual payment of cash duly receipted for or the issuance of a check subsequently encashed. The delivery of checks produces the effect of payment only when they have been cashed. In this case it was not shown that the checks payable to Alfonso were encashed by him.

Even assuming that payments were made, it has not been shown whether they were made specifically to satisfy the Manalos’ obligation under the CA, nor were circumstances under which the payments were made explained. The dates, amounts and the person issuing, which the Manalos claim were made in their behalf and were issued in satisfaction of their obligation, do not really reconcile with the dates and the amounts due under the CA as to constitute convincing proof that the payments were really for the Manalos’ obligation under said CA. The checks were all issued by a certain Carla Reyes whose identity and relation to the Manalos were never explained by them. The Manalos also never endeavored to rationalize or explain the great disparity between these checks and the amount due from them under the CA. In this case, the creditor (Alfonsos) must "receive and acknowledge full payment" from the debtor (Manalos). No such acknowledgment or proof of full payment was satisfactorily shown. For this reason the Manalos’ claim of payment must fail (Alonzo vs. San Juan, G.R. 137549, February 11, 2005, 451 SCRA 45).

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